What a Bankruptcy can do for you
Filing bankruptcy is an incredibly big financial decision. Anyone struggling with financial limitations, no matter what brought them on, may need help getting caught up. Medical bills, unexpected expenses, and even poor decisions can lead to financial difficulties for many people. But, bankruptcy offers a solution. How can filing bankruptcy benefit you?
Eliminate Credit Card Debt
Under Chapter 7 bankruptcy, it is possible to eliminate credit card debt. This may mean you do not have to repay this debt to your lenders. Accounts are closed and balances are cleared. Under Chapter 13 bankruptcy, you can reorganize this debt to make it more affordable to repay, while much of it may still be eliminated. If you are struggling to make minimum payments on your credit cards, it may be time to consider this solution. Credit card debt is generally unsecured. This means that it is very hard for creditors to file claims against your assets for these debts (unlike a home that’s securing your mortgage). In many situations, you won’t have to repay your credit card debt at all during Chapter 7 bankruptcy and only a small amount in Chapter 13.
Eliminate Medical Bills
A single medical incident can lead to thousands of dollars in medical bills. Many people with medical debt can find relief through bankruptcy. Filing Chapter 7 bankruptcy will eliminate all of this debt, giving you freedom from having to repay it. This may include stopping collection activity on these debts immediately. It does not matter how many medical bills you have or the type. It also does not matter if they are cosmetic or medically necessary medical debts. In most cases, these are forgiven through bankruptcy. Medical debt is also unsecured, which means it is hard for creditors to come after you for the debt during bankruptcy. Most medical debt is discharged during the process as a result.
Eliminate Tax Debt
In many situations, bankruptcy can help with tax debt. In most situations, tax debts are eliminated, reduced, or restructured to make them more affordable to repay. Small business owners and individuals facing tax debt can find relief from these debts through Chapter 7 and Chapter 13 bankruptcy. The type of tax debt, the amount owed, and the composition of that debt (whether it is fees or actual owed funds) play a role in how much you’ll have to repay. When you speak to our attorney, you can learn more about your specific tax debt (based on the type) and determine if you have to repay it at all!
Stop Foreclosure Actions
Are you losing your home due to non-payment? Filing bankruptcy immediately halts foreclosure actions against you. You’ll stay in your home if you desire to, while you work through the process. If you file Chapter 13, you may be able to rework your mortgage loan to make it more affordable to you, allowing you to remain in your home long term. Chapter 7 can help you to get out of the obligation to repay your home, though you will lose it and any equity you have in it. If you decide you do not want to maintain your home, you can release it during the bankruptcy process. You may not have to repay that debt owed. You can get a new mortgage loan, in many cases, within a few years after rebuilding your credit.
Eliminate Second Mortgages
Second mortgages may or may not be tied to your home’s value. When filing bankruptcy, it may be possible to reduce or eliminate all of the debt you owe on these loans. You can eliminate second mortgage debt, in many cases, much like eliminating credit card debt. This can make it easier for you to keep making your future mortgage payments. Even if you used a second mortgage to finance home remodeling projects, you may not have to repay this debt.
Eliminate Liens and Judgments
If there is court action taken against you, bankruptcy will immediately halt it. This includes liens placed on your home and judgments related to old debts. Even if the court has moved forward to collect on these debts, filing bankruptcy will stop the legal actions against you. If you file Chapter 7 bankruptcy, those debts may be eliminated as well, which means you may never have to repay them. Under Chapter 13 bankruptcy, these debts may be forgiven or reorganized to make them easier for you to repay.
Help with Student Loans
Depending on the type of bankruptcy you file, you may get the financial support you need for student loans. Chapter 7 bankruptcy does not discharge these debts. However, if you file for Chapter 13 bankruptcy, you may gain some financial protection from repaying the debts right away. You may be able to reduce how much you pay or how frequently you pay your debt back. In some cases, it can slow down your repayments on these debts for five years.
Stop Wage Garnishment
At the moment you file for bankruptcy, your debts face a hold. During that time, you may not have to repay those debts. This includes debts related to non-payment of utilities or credit cards. It is important to know that wage garnishments for child support may not stop. You may be able to address child support concerns with those officials or during some Chapter 13 proceedings. However, most other forms of wage garnishment can be changed or even halted for good during bankruptcy.
Stop Vehicle Repo
Are you worried you may lose your vehicle because of non-payment or late payments? Your creditor has the right to repossess the vehicle if you fall behind. However, once you file bankruptcy and alert the creditor of your action, any repossession will immediately stop. During Chapter 13 bankruptcy, it may be possible to re-work this debt to make it more affordable. You may also elect to let go of the vehicle and discharge the debt in total during bankruptcy. In all cases, you get a temporary hold that can help you to keep your vehicle.
Stop Bank Account Attachments
In some cases, creditors go after your funds by attaching a debt to your checking account. This is done through a court order. It can be for anything including non-payment on a credit card, utility, or other debts. If the creditor gets a judgment against you, they can withdraw funds from your account as a result. However, if you file bankruptcy, this immediately stops. Once the creditor is told of the bankruptcy and the bank is notified, these funds can no longer be taken until the settlement of the debt in bankruptcy. In many cases, these debts can be eliminated in bankruptcy, allowing you to stop paying them back altogether.
Get a Fresh Start
The most powerful reason to file bankruptcy is to give yourself a fresh start. Without monthly credit card payments, medical bills, and other, hard-to-pay debts to deal with each month, you may be able to move forward and not only stay up to date on your debts, but also to build a savings account. It will impact your credit score especially during the 18 months to three years following your discharge. However, right away, you can begin making wise financial decisions and rebuilding your credit and your financial stability. It is life changing.
Eliminate Credit Card Debt
Under Chapter 7 bankruptcy, it is possible to eliminate credit card debt. This may mean you do not have to repay this debt to your lenders. Accounts are closed and balances are cleared. Under Chapter 13 bankruptcy, you can reorganize this debt to make it more affordable to repay, while much of it may still be eliminated. If you are struggling to make minimum payments on your credit cards, it may be time to consider this solution. Credit card debt is generally unsecured. This means that it is very hard for creditors to file claims against your assets for these debts (unlike a home that’s securing your mortgage). In many situations, you won’t have to repay your credit card debt at all during Chapter 7 bankruptcy and only a small amount in Chapter 13.
Eliminate Medical Bills
A single medical incident can lead to thousands of dollars in medical bills. Many people with medical debt can find relief through bankruptcy. Filing Chapter 7 bankruptcy will eliminate all of this debt, giving you freedom from having to repay it. This may include stopping collection activity on these debts immediately. It does not matter how many medical bills you have or the type. It also does not matter if they are cosmetic or medically necessary medical debts. In most cases, these are forgiven through bankruptcy. Medical debt is also unsecured, which means it is hard for creditors to come after you for the debt during bankruptcy. Most medical debt is discharged during the process as a result.
Eliminate Tax Debt
In many situations, bankruptcy can help with tax debt. In most situations, tax debts are eliminated, reduced, or restructured to make them more affordable to repay. Small business owners and individuals facing tax debt can find relief from these debts through Chapter 7 and Chapter 13 bankruptcy. The type of tax debt, the amount owed, and the composition of that debt (whether it is fees or actual owed funds) play a role in how much you’ll have to repay. When you speak to our attorney, you can learn more about your specific tax debt (based on the type) and determine if you have to repay it at all!
Stop Foreclosure Actions
Are you losing your home due to non-payment? Filing bankruptcy immediately halts foreclosure actions against you. You’ll stay in your home if you desire to, while you work through the process. If you file Chapter 13, you may be able to rework your mortgage loan to make it more affordable to you, allowing you to remain in your home long term. Chapter 7 can help you to get out of the obligation to repay your home, though you will lose it and any equity you have in it. If you decide you do not want to maintain your home, you can release it during the bankruptcy process. You may not have to repay that debt owed. You can get a new mortgage loan, in many cases, within a few years after rebuilding your credit.
Eliminate Second Mortgages
Second mortgages may or may not be tied to your home’s value. When filing bankruptcy, it may be possible to reduce or eliminate all of the debt you owe on these loans. You can eliminate second mortgage debt, in many cases, much like eliminating credit card debt. This can make it easier for you to keep making your future mortgage payments. Even if you used a second mortgage to finance home remodeling projects, you may not have to repay this debt.
Eliminate Liens and Judgments
If there is court action taken against you, bankruptcy will immediately halt it. This includes liens placed on your home and judgments related to old debts. Even if the court has moved forward to collect on these debts, filing bankruptcy will stop the legal actions against you. If you file Chapter 7 bankruptcy, those debts may be eliminated as well, which means you may never have to repay them. Under Chapter 13 bankruptcy, these debts may be forgiven or reorganized to make them easier for you to repay.
Help with Student Loans
Depending on the type of bankruptcy you file, you may get the financial support you need for student loans. Chapter 7 bankruptcy does not discharge these debts. However, if you file for Chapter 13 bankruptcy, you may gain some financial protection from repaying the debts right away. You may be able to reduce how much you pay or how frequently you pay your debt back. In some cases, it can slow down your repayments on these debts for five years.
Stop Wage Garnishment
At the moment you file for bankruptcy, your debts face a hold. During that time, you may not have to repay those debts. This includes debts related to non-payment of utilities or credit cards. It is important to know that wage garnishments for child support may not stop. You may be able to address child support concerns with those officials or during some Chapter 13 proceedings. However, most other forms of wage garnishment can be changed or even halted for good during bankruptcy.
Stop Vehicle Repo
Are you worried you may lose your vehicle because of non-payment or late payments? Your creditor has the right to repossess the vehicle if you fall behind. However, once you file bankruptcy and alert the creditor of your action, any repossession will immediately stop. During Chapter 13 bankruptcy, it may be possible to re-work this debt to make it more affordable. You may also elect to let go of the vehicle and discharge the debt in total during bankruptcy. In all cases, you get a temporary hold that can help you to keep your vehicle.
Stop Bank Account Attachments
In some cases, creditors go after your funds by attaching a debt to your checking account. This is done through a court order. It can be for anything including non-payment on a credit card, utility, or other debts. If the creditor gets a judgment against you, they can withdraw funds from your account as a result. However, if you file bankruptcy, this immediately stops. Once the creditor is told of the bankruptcy and the bank is notified, these funds can no longer be taken until the settlement of the debt in bankruptcy. In many cases, these debts can be eliminated in bankruptcy, allowing you to stop paying them back altogether.
Get a Fresh Start
The most powerful reason to file bankruptcy is to give yourself a fresh start. Without monthly credit card payments, medical bills, and other, hard-to-pay debts to deal with each month, you may be able to move forward and not only stay up to date on your debts, but also to build a savings account. It will impact your credit score especially during the 18 months to three years following your discharge. However, right away, you can begin making wise financial decisions and rebuilding your credit and your financial stability. It is life changing.