As the year draws to a close, you may be wondering how you can get a fresh start financially next year. If you are overwhelmed with the burden of debt, Chapter 7 or Chapter 13 bankruptcy may be the best way to simply start over in 2016.
Deeper in debt
Maybe it is medical bills, or perhaps a layoff left you drowning in bills you just can’t manage to pay. Whatever the situation is, you are not alone. All too often when individuals find themselves overwhelmed by debt, they will make the mistake of borrowing from one lender to repay another. Often this is done when a lender offers an incredibly low interest rate for a brief period. Consumers feel sure they can repay the secondary loan before the interest rate skyrockets, only to miss the deadline and end up in deeper financial trouble. At the end of the year, many will take out loans or use credit cards to pay for Holiday gifts and trips, only to be left with an overwhelming bill at the beginning of the new year. You cannot borrow yourself out of debt. Our 60-second financial check-up quiz is a great way to quickly find out if bankruptcy could help your financial situation.
A New Year
Perhaps the word “Bankruptcy” has crossed your mind, but you’ve quickly dismissed it. Maybe you thought bankruptcy isn’t an option for you or that filing might ruin your credit. Filing bankruptcy of course does not improve your credit score, but delinquent or missed payments have already affected your score. With so many myths about bankruptcy, it can be difficult for the average consumer to understand the potential for financial peace offered by bankruptcy filing. Don’t let those myths keep you from speaking to an experienced bankruptcy lawyer about how bankruptcy can help you in the new year.
How can bankruptcy help?
There are some very significant ways that bankruptcy can help you start your year on a more even financial footing. Whatever the cause of your financial struggles, it’s always best to talk to a qualified, experienced bankruptcy attorney for the most complete information. However, here are some basics that you can consider before meeting with your bankruptcy attorney.
Relieve the burden of debt
The most immediate benefit of filing bankruptcy is the relief of the tremendous burden of debt. Most people do not intentionally ignore their bills or run up bills intentionally without thinking that the bills will be paid. The biggest toll that debt takes is on our mental and physical health. From medical bills, overdue taxes, vehicle payments, house mortgages, to credit card debt, the bankruptcy process is designed to help you find relief from an overwhelming situation.
Reduce or eliminate large medical bills
In 2013, CNBC reported that extensive medical bills were the number one cause for bankruptcy filings in the United States. Even three years ago, there was an obvious need in this area, and bankruptcy is a reasonable choice for many who have simply fallen on hard times and have no other options for repaying their healthcare costs. As the cost of healthcare continues to rise, bankruptcy becomes more necessary for consumers to help reduce or eliminate those large medical bills.
Stop Stressful calls from collectors
With the filing of bankruptcy, the most immediate peace can be found from the lack of nagging calls and correspondence from debt collectors. Once you have an attorney representing you for your bankruptcy, debt collectors can no longer contact you directly.. All a collector needs to know is your attorney’s name and contact information. If a collector attempts to contact you after you have given this information, they may have violated the bankruptcy code or the Fair Debt Collection Practices Act (FDCPA).
Stop wage garnishment
Once you have filed, an automatic stay goes into effect and all garnishment of wages stops as long as the stay is in effect. The court will only lift the stay if it is determined that the creditor has a valid reason for the court to do so. Under certain circumstances, you may even be eligible to get back some of your garnished wages if they were garnished before the bankruptcy.
Stop repossession and foreclosure
As with wage garnishment and collection calls, the automatic stay will prevent foreclosure on your home long enough for you to determine what the best course of action is on your mortgage or home loan. This will allow you to decide if you should keep your home, or let it go, and how to avoid a deficiency judgement if you do let it go back to the creditors or how to keep the house if you choose to do so.
These are the same questions you will need to answer regarding any pending repossessions of items you have purchased. The automatic stay will allow you time to talk to your bankruptcy lawyer to determine which course of action is best for you.
A New Start
This year, don’t let the weight of your debt overwhelm you. Speak with a bankruptcy attorney who is experienced and well qualified to handle your case, someone who can help you make the right choices for your financial freedom. Or, fill out our Free Bankruptcy Case Evaluation, and a representative from our bankruptcy law team will contact you to set up a consultation.
Please consult an attorney for advice about your individual situation. This site and its information is not official legal advice, nor is it intended to be. Feel free to get in touch by e-mail, letters or phone calls. Contacting us does not create an attorney-client relationship. Until an attorney-client relationship is established, please withhold from sending any confidential information to us.