If a person or a business does nothing in the face of debt, the debt will go through the normal stages of collection. The speed at which it moves is entirely up to the creditor.
In the first stage, the creditor will try to contact you about the debt. This is most commonly letters and phone calls. For most people, this phase of the process is annoying. A creditor might do this for a few weeks, a few years, or even not at all.
In the second stage, the creditor will file a lawsuit. For most people, this phase of the process is scary, as many people rarely if ever interact with the Courts.
In the third stage, the creditor has won the lawsuit and now begins taking stuff. For most people, this phase of the process is where things get real. A creditor can intercept income (like a paycheck garnishment), seize assets (like draining a bank account or taking a vehicle), or put a lien on property.
For many businesses that are considering bankruptcy, there may not be stuff that a creditor can take. If that’s the case, a creditor may seek to go after a business owner’s stuff instead.
A bankruptcy stops the process no matter how far along it is. A bankruptcy can even reverse a creditor taking stuff in many situations. Whether you’re still getting those annoying phone calls, or whether a creditor has started helping themselves to your bank accounts, an experienced bankruptcy attorney can help to put an end to collection.