Is it worse to file bankruptcy or just not pay?
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.
Brittany Labadie is the Managing Partner at Lewis Labadie. She has been working with Lewis Labadie since it opened. Her current focus is with adoption cases, including juvenile adoptions, adult adoptions, foster care adoptions, same-sex adoption, surrogacy adoptions, and when necessary termination of parental rights. She works throughout the State of Arizona.