Law Office of Gordon Mosley
Should you negotiate with creditors or file for bankruptcy?
On Behalf of Law Office of Gordon Mosley

The decision to file for bankruptcy is not an easy one. If you’re having difficulty deciding, that’s a good sign. It means that you recognize the seriousness of the situation and are taking time to fully weigh your options and the consequences of any option you choose.


That being said, you shouldn’t talk yourself out of bankruptcy if it is the right decision for your financial situation. To make the most informed decision, it is best to discuss your case with an experienced bankruptcy attorney. The conversation will likely start with an assessment of how much debt you have, what kind of debt it is and whether you could reasonably repay it.

How does your debt compare to the national average?

Bloomberg recently published a guide to bankruptcy in America filled with interesting statistics. According to the article, the average American under 65 who files for bankruptcy has accrued nearly $92,000 in debt. If this amount of debt were in the form of a 20-year mortgage with reasonable monthly payments, it might not seem like an overwhelming amount. But if much of this is credit card debt with high interest rates, the chances of paying it off are very slim.


Your income and net worth will also (obviously) factor into this decision. Someone with a household income of $200,000 annually has a much better chance of paying off $92,000 in debt than someone making just over $60,000 per year, which is the current median income in Texas.

Is there a downside to trying to repay first and filing later on, if needed?

It may be tempting to try and pay off your debt by negotiating with creditors, knowing that bankruptcy is always an option down the road. In some circumstances, this might be a fine choice to make, but it should be a decision based on an accurate assessment of your debt and your chances of successfully repaying it.


If you try to avoid bankruptcy when there is no reasonable alternative, the best-case scenario is that you prolong your stress, fear and worry before taking advantage of a legitimate legal tool meant to help you get out of debt. The more likely consequence, however, is that you will end up unnecessarily depleting important assets that you might have been able to keep. Too many people end up cashing out retirement savings, for instance, only to realize the money wasn’t enough to help them avoid bankruptcy.

Talk to a professional before making up your mind

Filing for bankruptcy isn’t an easy choice to make, but it is sometimes the best choice. Thankfully, you don’t need to make this decision alone. A reputable bankruptcy attorney would be glad to discuss your options with you after taking a closer look at your finances. He or she will not recommend bankruptcy unless it is truly a good option for you.

Facing garnishment, lawsuits? Bankruptcy may be able to help.

By On Behalf of Law Office of Gordon Mosley • February 21, 2022
During the day, you may have the ability to keep your financial worries somewhat at bay by concentrating on other tasks. However, when the time comes to get in bed for the night, those thoughts that stayed at the edge of your mind all day may come flooding forward. How will you make your next credit card payment? When will the next creditor call? What can you do about your garnished wages? These concerns affect numerous people who must contend with overwhelming debt. No matter what led to your debt, you do have options for effectively addressing those liabilities. In particular, bankruptcy may act as a significant step toward a fresh financial start. However, you may wonder whether taking this action really suits your circumstances. Has action been taken against you? When you face overwhelming debt, you may also face letters and calls from creditors every day. Over time, you may have become adept at avoiding these attempts at contact or requested a stop to such actions. However, more significant actions may have been taken against you with which bankruptcy may be able to help. Two actions that may make you consider this debt relief option more seriously include: Wage garnishment: If creditors are directly garnishing wages from your paychecks in attempts to pay your outstanding balances, you already face serious financial trouble. You may need every penny you earn to make ends meet as it is, and when you cannot hold on to your wages, bankruptcy may be able to help stop garnishments. Lawsuits: When creditors feel that they cannot effectively get you to pay your balances on their own, they may sue you for payment. Lawsuits are serious matters that could cause you to face even more financial strife while also facing orders to pay your liabilities. Fortunately, bankruptcy could help stop judgments in such cases. Because these actions can have serious outcomes, taking steps to stop them may help you in the long run. Can you attempt other debt relief methods? If you are not yet facing wage garnishments or lawsuits, you may wonder whether you could first attempt other actions before bankruptcy. Certainly, creditor negotiation and credit counseling could act as possible avenues to try. Of course, not all creditors feel willing to negotiate, and you may still need to address your full balances. Additionally, you may want to remain wary of services which claim they can reduce your debt or help you become debt free as many of these claims turn into scams that cost unsuspecting individuals more money. Though it can be frightening to consider such a major action, exploring your bankruptcy options further may help you get your financial affairs in order and bring back your restful sleep.

Seeking debt relief does not make you a bad person

By On Behalf of Law Office of Gordon Mosley • February 21, 2022
No matter what you do, you just can’t seem to get your head above water financially. In the last little while you’ve experienced loss of income, or you’ve had unexpected emergency expenses that you had to put on credit cards, or you or a loved one may have suffered a serious medical event, costing your family a small fortune. Maybe it was a combination of these or other hardships. Now you need help, but feel you are a bad person for seeking debt relief. There is and always has been a certain stigma surrounding bankruptcy in the United States. The truth of the matter is, Texas residents who need financial help are not bad people and no one should make them feel bad for asking for help. It is their right to pursue bankruptcy if it is what will best serve their interests. Stigmas attached to bankruptcy There are three types of stigmas often associated with bankruptcy. These are: Financial Emotional Social Emotional and social stigmas are often combined. They refer to how you see yourself after pursing a bankruptcy filing and how you believe people view you. People are afraid to let others down or do not want others to know they are struggling. When drowning in debt, the only thing that should concern you is fixing the situation. It shouldn’t matter how you do it and it really is no concern of anybody else’s. You do what will best serve you. The financial stigma sounds bad, but it can be a good motivator. Will your credit score go down if you file for bankruptcy? Yes. Will it stay that way forever? Will you be financially doomed for the rest of your life for seeking relief? No. While credit recovery after bankruptcy can take time, it is possible to do if you take full advantage of the bankruptcy filing and are cautious in your future financial decisions. Don’t let the stigmas stop you At the end of the day, you have to do what is best for you and your family. That may involve pursuing a bankruptcy filing and that is okay — it does not make you a bad person. Don’t let the stigmas stop you from seeking the relief you need. If you are not sure if it is the best course of action, you can seek legal counsel on the matter and then go from there.
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