7 Ways Bankruptcy Could Benefit You
Bankruptcy is designed with powerful laws that provide protections that other types of debt relief don't. How might filing bankruptcy help you? With bankruptcy, you maybe be able to:
Eliminate Credit Card Debt: Millions of Americans are weighed down by credit card debt. For those juggling multiple balances, barely within their limits and only making minimum payments, that debt can be unbearable. Chapter 7 bankruptcy is designed to completely wipe out credit card debts, among other types of debt.
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Erase Medical Bills: Nearly two-thirds of bankruptcy filers in a Harvard study cited some form of medical emergency as a cause of their bankruptcy filing. Medicals bills are a form of unsecured debt—not tied to any collateral—that can be discharged in Chapter 7 bankruptcy. Medical debt can also be restructured into affordable payments in Chapter 13 bankruptcy.
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Stop Wage Garnishment: One tool that many creditors use to collect on debts is wage garnishment—the ability to take your wage before they even hit your bank account. Bankruptcy can stop wage garnishment immediately with a court order known as the Automatic Stay. Filing bankruptcy may end current garnishments and protect wages from creditors, depending on your state's laws.
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Stop Foreclosure: Filing bankruptcy may provide quick protection against foreclosure. Bankruptcy's automatic stay can also halt foreclosure actions against your home. By filing bankruptcy, you may be able to eliminate unmanageable debts to make paying your monthly mortgage easier. In a Chapter 13 bankruptcy, you'll also have the chance to make up past-due mortgage payments over a period of three to five years.
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Stop Car Repossession: Filing bankruptcy can halt auto repossession efforts, as well as other attempts to collect on debts. If you've fallen behind on car payments, you may be able to catch up using Chapter 13 bankruptcy. You also may be able to make a single payment while wiping out other debts in a Chapter 7 bankruptcy. Most importantly, thanks to state exemptions, you may be able to keep your car in bankruptcy.
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Silence Creditors: When you're behind on payments to your creditors, debt collectors can use nasty tricks to try to get you to pay. While the FTC has set rules in place to protect consumers from creditor harassment, many creditors simply ignore them. Filing bankruptcy comes with powerful protections, including the Automatic Stay, which prevents creditors from any form of contact while the case is pending. This gives you the breathing room you need to focus on your case and work towards a debt-free future.
Start Fresh: With the bankruptcy discharge comes a fresh start. Filing bankruptcy may give you the opportunity to move on from the circumstances that led you to deep debt and allow you to rebuild your finances, your credit and your life.
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Ready to experience these benefits yourself? Connect with a local bankruptcy attorney to day to learn more about the bankruptcy process.