When Bankruptcy Can Help

: Reese Baker & Associates

  Filed under: bankruptcy

Filing bankruptcy can be a hard decision to come to, most of us think if we just work a little harder, pay a little more, we can get caught up in our finances and get the creditors to stop calling.

When all other measures have failed or not feasible, such as borrowing money, consolidation loans, second mortgages, we need to accept that bankruptcy can have a positive effect on ourselves and our families.

Your Creditors will Stop Calling

As soon as you file your bankruptcy papers with the court, the automatic stay goes into effect, and your creditors are legally barred from contacting you. The automatic stay also stops all wage garnishments and legal action taken against you regarding your debt.

You can Keep Certain Assets

In most personal bankruptcies the debtor is allowed to keep all of their possessions. And depending on what type of bankruptcy you file as to if you keep your secured debt such as homes and vehicles.

Bankruptcy law entitles you to keep certain assets, so you are not left worse off after bankruptcy than before you started. Both federal and state have exemptions you can claim. You can not take both, and you will need to speak to your attorney to determine which set of exceptions are best for you and your situation.

Bankruptcy Stops Foreclosure Actions

Filing bankruptcy will stop the foreclosure action while you are in the bankruptcy process. You are effectively giving you the time to figure out if you want to stay in your home and continue payments or not. If you choose to file Chapter 13 bankruptcy, you will make preapproved payments to your mortgage company or Chapter 7 bankruptcy allowing the mortgage company to take back the home and cancel any remaining mortgage debt.

Getting a Fresh Start

The reason most people file for bankruptcy is to have qualifying debt wiped away and to get a fresh start. For Chapter 7 it will take anywhere from three to six months to complete the process, and in Chapter 13 it can take anywhere from three to five years. After completing the terms of your bankruptcy, all remaining qualifying debt will be eliminated.

Before you decide to file for bankruptcy contact a Rio Grande bankruptcy attorney to discuss what type of bankruptcy is best for your financial situation.