Bankruptcy is often something looked down upon, but in certain situations it could be the best option. If you’re in a tough financial situation with creditors coming after you left and right, you could be stressing. Fortunately, a bankruptcy lawyer may be able to help. If you do decide to file bankruptcy, what does it do for your situation?
Stopping the Creditor Harassment
Being harassed by creditors is not only stressful but could be illegal depending on how the creditor goes about it. While you wait for your case to play out, filing for bankruptcy ensures the creditor can’t harass you anymore. There is an automatic stay on your case that makes creditor calls, lawsuits, wage garnishments and other similar actions get put on hold. The only exceptions are support payments and criminal cases.
If you are facing eviction, foreclosure or repossession, filing for bankruptcy will put these things on hold as well. This doesn’t mean you won’t be evicted, foreclosed on or have your property repossessed, but it does mean you don’t have to deal with it right this moment. These temporary orders will help you get on your feet so you can hopefully make the payments necessary to stay put.
In some states, if a landlord already has an eviction judgment filed, it is not affected by your bankruptcy filing. If you are unable to bring your loans current during the bankruptcy process, you could still be foreclosed on or have your car or home repossessed after the automatic stay is lifted. If you file Chapter 13, there’s a possibility you’ll still be able to keep your home and car.
Wiping Out Unsecured Debts
There are several types of debts that are considered unsecured. For example, credit card debt, utility payments, medical bills, gym contracts and personal loans most often fall under that category. If you have unsecured debts, bankruptcy typically wipes them out so you don’t owe payment on them anymore. If you have a secured credit card, however, it wouldn’t apply and you would have to return the purchased items to pay the creditor back.
Bankruptcy isn’t going to solve all of your problems. You’ll still need to figure out how to keep yourself from getting in the same situation again, but there are some benefits of filing for bankruptcy as well. Getting your attorney involved can be a great way to understand the beneficial things that can happen. Contact an attorney today to find out what those are, such as a lawyer for how bankruptcy affects tax debts from The Law Offices of Marty D. Martin.