Is it worse to file bankruptcy or just not pay?

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It is always worse to ignore debt than to address it. Simply ignoring debt will have lasting negative impacts that may force you into bankruptcy anyway.

For example, if a creditor sues you and obtains garnishment, they can take up to 25% of your wages. Your credit score will be negatively affected, and you will have to pay higher interest rates and find financing difficult to obtain.

By contrast, there is nothing wrong with exercising your legal right to filing Chapter 7 bankruptcy. Most people who file for bankruptcy never regret it. You have a legal right to bankruptcy, and you should feel no shame in doing so.

If you ignore the debt, the debt is likely to be sold to a collection agency. Collections may call you often and send letters constantly. Creditors, or even collection agencies, will probably sue you and attempt to garnish your paychecks.

Finally, all of that will be reported on your credit, with effects that can last up to 7 years. There is no reason to endure such harassment and negative impacts on your life. It is definitely best to either pay your debts or seek the protection of Chapter 7 bankruptcy.

Have any questions about this topic?
We’re ready to listen.

Brittany Labadie