Bankruptcy is an action you might take if you would like to discharge your debts. Creditors usually do not care if you file for bankruptcy and will often sell your debt to a debt collector and receive a tax write-off. However, there are some circumstances where a creditor might choose to force you into bankruptcy.

Why Creditors Like Bankruptcy

If you file for Chapter 13 bankruptcy, you will pay for some of the debts and the remaining debts will be discharged. A creditor prefers this because they will be paid some of what they are owed. If you file for Chapter 7 bankruptcy, the creditor will be able to have your assets sold. 

However, because most creditors will charge off debt that they believe they will not be able to collect, they often do not care if you file for bankruptcy. 

Creditors Sometimes Prefer Bankruptcy

If you do not have a lot of creditors, a single creditor may be able to force you into bankruptcy. However, the more creditors that you have, the more important it is that several creditors agree to initiate the process to force you into bankruptcy.

Also, the creditor will need to prove that the debt you owe is not in dispute and that you are not paying the debt when it is due. While creditors are free to force you into debt, they will only do so if they do not have institutional procedures in place to force you to do so. Then, it would not make sense for a larger creditor to force you into bankruptcy.

Why Bankruptcy Is on Your Side

A creditor is more likely to use tactics to try to get you to pay. For example, they are more likely to engage in harassing phone calls or threaten you with a lawsuit. Therefore, you will want to contact a bankruptcy attorney if you'd like to bring an end to these tactics.

Once you have filed for bankruptcy, the creditors will no longer be able to contact you and there will be an automatic stay on collection efforts. Whether or not you should ultimately file for bankruptcy should be based on your individual choice. 

If you are earning a wage, you will need to file for Chapter 13 bankruptcy, which is essentially a repayment plan. But if you cannot repay your debts and wish to discharge them, an attorney can guide you through the Chapter 7 bankruptcy process. Contact a bankruptcy attorney for more information.