Bankruptcy may have a negative stigma for people who do not understand what the process means. Bankruptcy is a solution to your debt problems, not a symptom of them. You file for bankruptcy to stave off creditors and ultimately clear yourself of eligible debts that are causing you stress and threatening your financial security. When filing for bankruptcy, you should understand that there are immediate and long-term benefits.
You will immediately notice the effect of filing for bankruptcy because it will enforce an automatic stay on your creditors. This means an immediate stop to:
- Persistent phone calls and letters about repayment;
- Looming litigation by your creditors;
- Garnishment of your wages by the IRS and student loan lenders; and
- Imminent foreclosure or repossession of your properties.
The automatic stay gives you time to assess your financial situation and how you wish to proceed with the bankruptcy process. It is difficult to concentrate on making those decisions if you are worried that the bank is about to foreclose on your home.
Benefits After Bankruptcy
Completing bankruptcy gives you the benefit of being free of your debts, which are either repaid through the bankruptcy process or discharged afterward:
- If you filed for Chapter 7 bankruptcy, the bankruptcy court will discharge your debts that remain after the bankruptcy trustee has used your available assets to repay your creditors; and
- You are also eligible for discharge after Chapter 13 bankruptcy if any debts remain after completing the repayment plan.
Bankruptcy exemptions can protect your assets such as your home, vehicle and retirement accounts from your creditors. Some debts are not eligible for discharge, such as student loans or child support and some taxes. However, you may be in a better position to repay those debts after you are free from your other debts.
The long-lasting benefit of filing for bankruptcy is giving you a fresh start. You can rebuild your savings and your credit rating by making wise financial decisions. You can find ways to lower your living expenses or seek a better-paying job. You certainly have much more to lose by not filing for bankruptcy. Your debts may have kept increasing, and your creditors may have eventually filed a lawsuit against you in order to receive repayment. You could have been ordered to repay your creditors without any of the protections that bankruptcy gives you.
Contact a Denton County Bankruptcy Attorney
Bankruptcy may be your best option. If you are unsure of how you will be able to repay your creditors. Contact a Frisco, Texas, bankruptcy lawyer at The Page Law Firm today to determine whether bankruptcy is right for you. Free consumer bankruptcy consultations are available by calling 214-618-2101.