1. IMMEDIATELY STOP YOUR CREDITORS:
The moment you file your bankruptcy case, the court immediately issues an “automatic stay” which is a type of restraining order that tells all of your creditors that they must immediately stop all collection activities. This means they have to stop sending you bills, phone calls, lawsuits, repossessions, foreclosures, garnishments, etc. If you have fallen behind on your bills, the automatic stay offers a huge relief to the pressures you are likely feeling from creditors.
2. MOST PEOPLE QUALIFY FOR CHAPTER 7:
When filing for bankruptcy, you must complete what is called the “means test” which is a tool that determines whether your finances qualify you for a Chapter 7 case or not. The good news is that most people qualify under the means test. The importance of this is that Chapter 7 offers you an opportunity to completely eliminate most, if not all of your debts. Even if you don’t qualify for Chapter 7, you still have Chapter 13 available, which includes a payment plan of 3 – 5 years at which point you may be able to eliminate the remaining debts. Also, Chapter 13 has benefits that Chapter 7 does not have that could make it a preferable alternative even if you do qualify for both. Talk to a bankruptcy attorney right away to determine what chapters you may qualify and the pros and cons of both.
3. IMPROVE YOUR CREDIT SCORE:
No, that is not a typo. A bankruptcy filing can actually improve your credit score. This seems counterintuitive as most people know that a bankruptcy filing is one of the worst negative hits you can have on your credit score. If you have a great credit score and you are on time with all of your bills, this may not apply to you, but then again you wouldn’t even be considering bankruptcy if that situation applies to you. However, you have to remember that most people who are even considering bankruptcy are doing so because they have fallen behind on their bills and cannot see a way back to financial stability on their own. If this applies to you, this means your credit score has already taken a number of hits and is likely to continue to have negative hits every month until you can catch up, which could take years depending on the situation. The bankruptcy is a one-time hit, even if it is a big one, but your credit score immediately starts improving because you no longer have the monthly negatives piling up on you. Many people report that their credit scores are back to normal, or even higher, within 6 – 12 months. The specifics will depend on your individual situation, but the purpose of bankruptcy is to give people a fresh start financially, and it is a very successful tool for doing that.
4. MOST OF YOUR PROPERTY IS PROTECTED:
Many people considering bankruptcy are worried that they will lose their property. The truth is that most people who file bankruptcy lose little, if any, property in the process. There are laws called “exemptions” that protect essential property items such as your home, vehicle, household furnishings, retirement accounts etc. up to certain limits. You should consult with an experienced bankruptcy attorney to determine what, if any, cost there would be if you were to file bankruptcy.
5. BANKRUPTCY RELIEVES YOUR STRESS:
If you are even considering bankruptcy, then you are under a lot of stress. Bankruptcy not only relieves that stress by eliminating your debts, it also surprises most people how easy it is when you have an experienced bankruptcy attorney handling it for you. Going through it alone will be stressful and possibly very costly as the process is full of pitfalls that can cost you thousands if you do not know what you are doing. I have personally witnessed the stress just melt away from people as they give me their paperwork and ask me to get it done. That’s what we do at the Larson Law Office. We take on your stress for you and take care of your debts.