Bankruptcy may seem like an admittance of failure; often considered the last resort when facing mounting bills, lawsuits, or collection letters. Yet filing bankruptcy offers several distinct advantages other options don’t. Bankruptcy can protect you through federal laws that regulate bankruptcy protection for debtors while restricting what creditors can do, providing much-needed breathing room after filing. The debt relief alone may make filing worth your while!

Many declare bankruptcies each year. If you find yourself overwhelmed with credit card debt or facing sheriff sale proceedings for delinquent taxes, bankruptcy could be the ideal solution to help regain financial control – and offer other advantages beyond simply eliminating debts.

Bankruptcy Can Protect You

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Bankruptcy May Help Stop Creditors from Harassing You

Creditors have many methods at their disposal for collecting their debt, from phone calls and letters, judgment liens against property or bank accounts to even filing bankruptcy to collect their due. But filing bankruptcy puts a stop to creditors collecting from debtors who try to contact them aggressively.

As soon as your bankruptcy filing has been accepted, an injunction called an “automatic stay” is issued that restricts what creditors can do against you and you. It protects both against harassing conduct by creditors as well as their legal remedies; after filing, creditors should cease all communication methods such as telephone or email calling you; in case of violation by anyone in particular then fines could be assessed by court.

Filing for Chapter 7 bankruptcy 

It offers individuals and couples the ability to discharge many unsecured debts such as:

  • credit cards
  • medical debt
  • personal loans 
  • certain tax obligations through this debt-elimination option.

Chapter 7 filings represent one of the highest concentrations. Individuals filing can access Chapter 7 as an effective tool against financial hardship by eliminating or discharging most unsecured debts such as credit cards, medical debt, personal loans, and some tax obligations through Chapter 7.

Filing for bankruptcy is often an appropriate solution when someone falls behind on multiple credit card bills and receives collection letters from creditors. Even if only pay the minimum balance on credit cards or move balances around to stay ahead, bankruptcy could help eliminate your debt in five or six months if eligible.

Judgment Lien Removal

Creditors have certain legal rights; one such right for unsecured debtors is to file suit to collect their debt. A successful lawsuit for collection will enable creditors to gain a lien against your property – this way your unsecured credit card debt will now become secured against its value in your home! Once sold or paid off, any proceeds would then go towards satisfying this judgment lien.

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Divorce and Bankruptcy 

Unfortunately, some marriages don’t last, and financial woes often play a leading role. Bankruptcy can protect you by alleviating overwhelming debts, making it easier to navigate the financial aspects of divorce. Filing for bankruptcy before divorcing could be beneficial, as filing early can have numerous advantages that you won’t gain later on.

Filing two separate bankruptcy cases is more expensive; both attorney fees and filing costs will be cheaper when filing jointly. Couples do not need to file joint cases but filing one may make sense financially in certain instances.

Chapter 7 vs. Chapter 13 Explained

A couple’s decision regarding filing can depend on which chapter of bankruptcy they select; Chapter 7 offers you an opportunity for financial freedom after leaving marriage without debt obligations lingering behind. Furthermore, Chapter 7 usually doesn’t cause significant delays as this quick process usually only lasts four to five months before resolution occurs.

Chapter 13 bankruptcy cases typically last three to five years and may not appeal to divorcing couples who don’t like long processes like this one. Should Chapter 13 become necessary, our Bruner Wright PA bankruptcy lawyer may advise filing separately in such an instance.

Income Qualifications and Exemptions

Chapter 7 qualifications can be difficult, particularly if one spouse earns substantially less than the other. Filing jointly could prove advantageous by pooling income and household size together to increase chances of passing together on means tests; this strategy becomes especially relevant if children are involved.

The joint filing offers you double exemptions, potentially making the difference between paying creditors with Chapter 13 or discharging debt through Chapter 7, depending on equity considerations.

Bottom Line!

There may be many reasons for someone to seek bankruptcy protection. Yes, Bankruptcy can protect you by providing relief from overwhelming debt and offering a fresh financial start. If unsure, call our team here at Bruner Wright for advice from one of our experienced bankruptcy lawyers; once evaluated, your circumstances can determine if bankruptcy is right for you. 

Although Chapter 7 and 13 bankruptcy have unique advantages over one another, these must also be kept in mind when making this decision.

All telephone and billing collections must immediately cease; stop any additional interest charges on credit cards; repay debt in a logical, orderly fashion; and potentially reduce car and mortgage payments as part of this plan.

Bruner Wright PA’s’ experienced bankruptcy lawyers offer free consultations. Each situation varies widely. Their offices will review your circumstances to help you better comprehend its benefits – just call us today to gain further insights about all available solutions.

Now you know that bankruptcy can protect You! Call us now.

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