Most people equate bankruptcy with financial irresponsibility, but the truth is people declare bankruptcy for all types of reasons. Filing for bankruptcy can help a lot of families solve financial problems that arise from numerous instances. Medical expenses top the list of reasons for bankruptcy. Job loss, divorce, credit card debt, and tax liens are high on the list as well.
Despite the stats, however, the negative perception of bankruptcy remains. If you are still unsure as to how the bankruptcy process can benefit you, here are four ways bankruptcy will give you a fresh start.
Creditors Will Stop Calling
Creditor harassment is one of the most stressful things about living in debt. They want their money and will drive you mad trying to get it. Some debt collectors go beyond merely asking for their money and are downright rude and nasty on the phone. Filing for bankruptcy provides relief from all debt collection calls, legally barring creditors from calling anyone who has filed bankruptcy. Doing so will result in legal sanctions against the creditor.
Erase a Mountain of Debt
Chapter 7 bankruptcy erases most debts, except student loans and taxes. Since it automatically deletes all other obligations, most people find Chapter 7 the most beneficial. Chapter 13 bankruptcy is an option for people who want a payment plan to repay a portion of their debt, while Chapter 11 is only for businesses and corporations.
Get a Fresh Credit History
Anyone who files for bankruptcy will see a reduction in their credit score but after a few years, it’s possible to start building a new credit score. Bad credit makes it difficult to receive loans and new credit cards, but after the bankruptcy period passes, it’s possible to get credit once again. Interest rates will skyrocket, but that’s a small price to pay for the opportunity to rebuild credit. It’s just important to pay on time, pay the amount in full when possible, and avoid creating another mountain of debt.
Peace of Mind
Having a significant amount of debt is incredibly stressful on your family and your relationships. That type of stress also isn’t good for your health. A bankruptcy attorney will take over the situation, file the paperwork, and allow you to relax as a result.
Forget the Shame Factor
Some people view bankruptcy as a matter of shame. They’d prefer to keep it a secret from family and friends. However, bankruptcy is in the public record. That means creditors and anyone who co-signed for you will get notified of your filing. Unless your friends and family fall into that category, they won’t know about the bankruptcy.
The benefits of bankruptcy vastly outweigh the perceived negatives as it provides a legitimate chance to start fresh. Although it’s not a fairy tale solution and has lasting effects, bankruptcy may be the best choice to fix a financial mishap.
If you’re considering filing for bankruptcy, get in touch with a Louisiana bankruptcy lawyer at E. Orum Young Law Offices. As a firm, we’ve filed the most bankruptcies in Northeast Louisiana and can help see you through the filing process for your personal or business bankruptcy. Contact us today for a free case evaluation. Our Trial Guarantee ensures that we’ll take your case to trial per your request.