For individuals and families facing extreme burdening debt, filing for bankruptcy is a viable option that can get them on the right track toward a financially free future. However, there are many common misconceptions regarding bankruptcy and what it can and can’t do to eliminate or make your debt more manageable. To help ensure you understand the implications of bankruptcy and exactly what you’re signing up for when you file, we have put together a quick list of things that bankruptcy can and cannot do for you.
Bankruptcy Can…
There are a lot of things bankruptcy can do for you. Here are a few of the ways both Chapter 7 and Chapter 13 bankruptcy can eliminate debt and help you take your life back.
Eliminate Credit Card Debt
One of the most common debts people aim to eliminate by filing bankruptcy is credit card debt. If you feel like you are drowning in credit card debt and your payments are unmanageable, you are not alone. According to the American Reserve, credit card debt across the United States totals a surprising $1.04 trillion.
By filing for Chapter 7 bankruptcy, you can eliminate all unsecured credit card debt, plus other unsecured debts. This includes but is not limited to all traditional credit cards, medical bills, and other overdue payments. Filing for Chapter 13 bankruptcy will also help to eliminate some of these debts, but you should prepare to pay at least a small portion back.
Eliminate Secured Debt
Many individuals who file for bankruptcy are also looking for relief from unmanageable secured debts in addition to their unsecured debts. Secured debts include payments for possessions such as homes, cars, jewelry, and other material goods. In Chapter 7 bankruptcy, individuals can eliminate their secured debt if they agree to return the goods. In Chapter 13 bankruptcy, individuals can keep the products if they can come to a repayment agreement with the creditor.
Stop Harassing Creditor Phone Calls
Harassing creditor phone calls and notices from collection agencies are some of the most stressful factors for individuals who have accumulated an unmanageable amount of debt. If you have found yourself in a situation where creditors are calling your phone daily, filing for bankruptcy can help you. Once you file for bankruptcy, a stay will be placed on all collection accounts, so you do not have to endure phone calls or collection attempts while you are filing for bankruptcy.
Temporarily Pause Eviction, Repossession, and Foreclosure
When trying to overcome a financial hurdle and work to get yourself back on the right track to a stable financial future, the stress and implications of eviction, repossession, or foreclosure can be daunting. Filing for bankruptcy temporarily pauses those situations (as long as they are still pending) and allows you to reorganize your finances and find a solution to keep your home and/or personal belongings.
Bankruptcy Can’t…
While there’s a lot that bankruptcy can do, there are still financial debts and obligations that it can’t eliminate in most situations. Those debts include student loans, tax debts, and child support or alimony obligations. Likewise, if there are debts you do not list and inform the court of when filing for bankruptcy, it will not eliminate those debts either.
Experienced Northeast Louisiana Bankruptcy Attorneys
To answer all of your questions and find the best solution for getting your finances back on track through bankruptcy, an experienced bankruptcy attorney can help. The bankruptcy attorneys at E. Orum Young are some of the best in the business. With more than 35 years of experience and 20,000 cases filed, they understand precisely what it takes to help you navigate bankruptcy and come out on top.
Call the E. Orum Young Law Offices today or schedule your free consultation to get started on your way to a financially secure future!