If you are struggling with debt, you may wonder why you should file for bankruptcy. Some people assume that bankruptcy will not help them with their debt problems. Some may think that it is too expensive, time-consuming or difficult to file a bankruptcy. While others just assume that filing a bankruptcy is a waste of time because they do not have anything to protect. However, filing a bankruptcy case is often the best solution to your financial problems. Even if you believe you are judgment proof (you have nothing for a creditor to seize), the stress of dealing with debt collectors can have a negative impact on your health and life in general. Filing a bankruptcy can relieve many of the problems associated with the inability to pay your creditors.
Reasons Why You Should File Bankruptcy
Stop Debt Collections – If you are dealing with aggressive debt collectors who call you at all hours of the day and night and send threatening letters, filing a bankruptcy case will stop all collection efforts. The bankruptcy automatic stay prohibits creditors from continuing any collection efforts without first obtaining permission from the bankruptcy court.
Stop Foreclosures – If your home is about to be sold at a foreclosure sale, a bankruptcy case will stop the foreclosure. You can save your home by filing a Chapter 13 bankruptcy case to pay back the past due mortgage payments over a 3 to 5-year period.
Stop Repossessions – Filing a bankruptcy case will stop repossessions from happening so that you can keep your vehicle. In some cases, if you file a bankruptcy case immediately after a repossession, you may be able to get your vehicle back even though the creditor has already taken possession of the vehicle.
Stop Wage Garnishments – In some states, creditors may be able to garnish your wages for debts that you owe. A bankruptcy case will immediately stop wage garnishments and allow you to keep the money you earned in your pocket. In most cases, the debt will be discharged at the end of your bankruptcy case. This means that you will no longer be liable for the repayment of that debt.
Emotional Relief – Dealing with debt problems causes stress, anxiety and even fear. That stress can increase your risk of serious health problems such as high blood pressure, heart conditions and depression. By filing a bankruptcy case, you are taking a positive step to resolve your debt problems. Taking this step will reduce the amount of stress caused by financial problems and allow you to have the fresh start that you need to recover from a financial crisis.
Prevent You From Going To Jail For Past Due Alimony and Child Support – Even though a bankruptcy will not discharge the domestic support obligation that you owe, it can prevent you from going to jail for contempt. By filing a Chapter 13 bankruptcy, you can pay the arrearage through your Chapter 13 plan and resume your normal monthly payments to avoid jail time.
Discharge Medical Debts – If you have suffered a traumatic accident or suffered from a serious or prolonged illness, you probably have medical bills that you cannot pay. Some individuals face massive medical bills after the loss of a spouse and need assistance. A bankruptcy will discharge medical bills thereby relieving you of the legal responsibility to pay for those debts.
Discharge Other Unsecured Debts – Many Americans have had to rely on credit cards or personal loans just to make ends meet during the recession. Even for those who have been able to find employment may be unable to pay back the debt that they incurred while unemployed. A bankruptcy can relieve you of those debts to allow you to begin rebuilding your finances for a better future for you and your family.
Failed Business – Because of the economy, many small business owners had to shut their doors due to a lack of income. For those business owners, bankruptcy may be the one solution to solve the remaining business debts that they are unable to pay. Bankruptcy can relieve them of this debt and give them back a sense of hope for their future.
Improve your credit rating – Even though your credit score may be low now because you have been unable to pay your debts, you can help improve your credit rating by filing a bankruptcy case. The bankruptcy will remain on your credit report for 7 to 10 years; however, by filing a bankruptcy you are clearing up the outstanding debt so that you can begin to rebuild your credit score more quickly than ignoring the problem.
There are many reasons that a person should file bankruptcy and the reasons are as unique as the situations that bring a person to a bankruptcy attorney’s office. Lansing Bankruptcy Attorney Gene F. Turnwald understands the reasons why people need to file bankruptcy and he understands the emotional turmoil associated with debt problems. No one sets out to file bankruptcy; however, circumstances in our lives place us in a position where we may have no other alternative to solve our financial problems. Contact The Law Office of Gene F. Turnwald today for a free bankruptcy consultation to see how filing a bankruptcy can resolve your debt problems and give you the peace of mind you need to recover from a financial loss.