If you have creditors who keep calling to ask for payments, you may be tempted to tell them to stop. After all, you are seriously considering filing for bankruptcy. Alternatively, no creditors are calling yet, but you might reach out to them to let them know about the possibility of bankruptcy.
Usually, telling your creditors is not a good idea. Here is a look at why.
The calls are likely to continue
Creditors and bill collectors hear this often: "I am probably going to file for bankruptcy soon, so save us both time and stop calling." In some cases, sure, it does turn out to be true. However, many people use it as a stalling tactic or a way to get the calls to stop. Some folks do genuinely mean it when they say it but decide later they are not quite ready to file yet.
The bottom line is that telling creditors about your likely bankruptcy will not stop them from trying to contact you.
The creditors could gain information to use against you
Telling your creditors about a planned bankruptcy opens the gates for them to ask you lots of questions and find out information you would not tell them otherwise. The only person you should be discussing a bankruptcy case with is your lawyer. Also, creditors could tell you false or misleading information on purpose to skew you away from filing.
There is a possible exception
You may want to tell your creditors about a possible bankruptcy if your goal is to lower your payment amounts. In other words, if bankruptcy might not actually be in the cards for you. One peril of this strategy is that you would probably need to get lower payment amounts from all your creditors to avoid bankruptcy. It is unlikely for all or even most of your creditors to agree, and it takes a lot of paperwork, documentation and effort on your part to submit these requests.
Disclaimer - Attorney Advertising. Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not guaranteed. Dramatization - not actual clients in pictures and videos. Thomas C. McBride,attorney in Alexandria, LA.