When Should I File Bankruptcy?

Many financial and legal obstacles can put pressure on individuals and businesses to file for bankruptcy.  In most circumstances, there may not be a “right” time to file, but certain events can act as trigger dates by when a bankruptcy should be filed:


Foreclosure, in Virginia, is a process that can take a lender a considerable amount of time to complete.  Lenders are required to provide homeowners with ample notice of their intent to foreclose on the homeowner’s property, and many of the notices are sent via certified mail.  At the outset, the lender may send letters indicating their intent to place the homeowner’s file “in foreclosure,” but as the process advances, the homeowner will start receiving notices from companies hired by the lender to conduct the foreclosure.  So what should the homeowner do next?

As soon the homeowner starts receiving these letters, he or she should consult with an attorney, especially an attorney who is experienced in bankruptcy or real estate.  If the lender has already set a foreclosure sale date, the homeowner should seek the advice of a bankruptcy attorney to help “stay” the foreclosure sale, which may afford the homeowner additional time to move out without being formally evicted, or alternatively, may allow the homeowner to catch up or cure missed mortgage payments and reinstate the mortgage and keep their house.

Warrant in Debt/Unlawful Detainer

A warrant in debt is a lawsuit or civil claim for money against an individual or business filed by a creditor in general district court (Alexandria, Fairfax County, Prince William County, etc.).  In most cases, the individual or business will be given an opportunity to dispute this debt on the “return date” listed on the warrant in debt.  While the return date is not necessarily the time in which a potential bankruptcy must be filed that would stop the lawsuit, it is prudent for the individual or business to consult with a lawyer prior to that date.

An unlawful detainer is a lawsuit filed by a landlord or leaseholder seeking to evict an individual or business tenant.  Again, in most cases, the individual or business will be given the opportunity to dispute the eviction on the return date listed on the unlawful detainer notice.  To avoid being evicted, it is recommended that the individual or business seek the advice of a lawyer prior to the return date to determine what options may be available to remedy the situation or avoid an eviction altogether.


A garnishments summons is an action filed by a creditor against an individual or business indicating the creditor’s intent to collect on a judgment and garnish property owned by the individual or business.  Unlike the warrant in debt or unlawful detainer action, an individual or business should immediately consult with an attorney upon receipt of the garnishment summons.  Seeking advice immediately may prevent wages or bank accounts from being unnecessarily taken, and may also prevent needless inquiries from an employer who is being asked to withhold money from an individual’s paycheck.

The information provided in this article is intended to provide an overview of this topic.  To speak to an attorney get legal advice specific to your situation, please contact us today.