This question comes up fairly regularly. Is it a good idea, or totally useless, to tell your creditors that you are planning on filing for Bankruptcy, have hired a Bankruptcy lawyer, or you are going to file for Bankruptcy at some point. There is really no firm answer either way as it depends on the circumstances, but I feel strongly that telling your creditors that you are going to file a Bankruptcy case at some point is, at best, a waste of time. At worst, it can speed up the creditor filing a lawsuit, garnishing wages and accounts (if they have a judgment) or repossessing a vehicle. There is simply no reason to let creditors or collectors know your future plans, or to have an extended conversation with them about anything if you really are going to file. If and when you do file for Bankruptcy, they will receive notice from the Court. In addition, there is no legal significance of hiring a Bankruptcy lawyer or doing anything other than actually filing the case. Rarely will collectors stop their efforts until you actually file the case, and at that point you can merely give them the case number and date the case was filed.
Of course, there are a few exceptions. If I am representing a party in a lawsuit and I know with certainty that we will file a Bankruptcy case, I might let the opposing lawyer know so they don’t spend a lot of time and money on a lawsuit that could go away or be stayed. If you are reading this and asking the question, chances are that you are getting calls from collectors, financial institutions, credit card companies or the like. You will almost certainly be speaking with the lowest level employees sitting in a cubicle or call center and following the script they are given. Your reasons for not being able to pay, or that you are thinking of Bankruptcy, or have hired a lawyer, mean absolutely nothing to them. It is unlikely to get you more of a settlement then you could get anyway.
If you are facing financial difficulties and are concerned about what to tell collectors, it might be time to set up a meeting with one or two Bankruptcy lawyers in your area to discuss your situation.