Is Bankruptcy The Answer When
Being Sued For Debt?

Being sued for debt is not fun! As a matter of fact, it can turn out to be one of the most harrowing experiences of a person’s financial life. To make matters worse, some debt collection agency employees actually set out to ruin the lives and finances of debtors, just to make a point. As you might guess, being sued for debt can cause a lot of stress, frustration and fear.

When a person is being sued for debt, the first knee jerk reaction is usually to file for bankruptcy. When a person files for bankruptcy, they need to know what to expect. Once all of the paperwork is filed, the court trustee will set up a meeting with the creditors. Many debtors filing bankruptcy get a little nervous about meeting with their creditors since they are not exactly sure what to expect.

For starters, when you are being sued for debt and decide to file bankruptcy, depending on the state you live in, a hearing with your creditors will be set within twenty to forty days after your bankruptcy petition has been officially filed and recorded in court. You will need to attend this hearing and all of your creditors are essentially invited by the court trustee in order to protect their interests.

In actuality, in the majority of cases, creditors with unsecured loans very rarely show up unless the debtor owes them a ridiculously crazy astronomical amount of money. We’re talking somewhere in the neighborhood of around twenty thousand dollars and up on just one account. But the thing is, even if they show up and raise opposition, they are more likely than not to only walk away with pennies on the dollar amount they are owed.

Most smart creditors realize this fact and try to avoid pressuring, coercing or browbeating their clients into filing bankruptcy. That is why it is a tricky situation when a creditor decides to sue a debtor. Once a debtor is being sued for debt, that action can easily trigger the debtor to quickly file bankruptcy rather than go through the lawsuit and have a judgment recorded against them.

The big question most debtors would like the answer to is the one that addresses the question of whether filing bankruptcy is actually worth it or not. The truth is, most debtors are forced into bankruptcy by over zealous third party debt collection agencies. They would rather get out of debt, the old fashion way. There should actually be some type of cooling down period after person files bankruptcy before it is actually recorded and made to be official.

With such a system in place, each debtor would be able to carefully measure the consequences of their actions. But most importantly, so would the creditors. Both parties would get to see how bankruptcy is to no one’s advantage and neither is being sued for debt. The possible best solution where every body in the equation wins is to settle the debt out of court.

Suffice it to say, anytime the courts are involved in a creditor versus debtor dispute, one party is going to win and another party is going to lose. But both parties are going to pay attorneys and other costs associated with being sued for debt.

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