While it is true that filing for bankruptcy may have an impact on your credit, this important legal action solves more problems than it creates.

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The advantage of filing for bankruptcy is that it protects your property. You see, in a Chapter 13 bankruptcy, your secured creditors get paid first. If there’s nothing left after they’re paid, your unsecured creditors are out of luck, and the debt is simply erased. Secured debts are generally big-ticket items you own such as cars and homes where you made an initial financial investment upfront and then agree to a payment plan. If you fail to keep up with your payments, then the bank or lender can repossess the item you purchased Unsecured debts usually refer to money owed on credit cards and personal loans. Medical bills are also considered an unsecured debt since you did not have to put up an item as collateral in order to obtain the debt.If you are overwhelmed with debt you can no longer pay, bankruptcy might be a viable option for you.

Here Are 8 Ways That Bankruptcy Can Improve Your Situation:

 

1) Gives You Peace of Mind

When your finances are in turmoil, you are constantly on edge, wondering how to solve your problems. Bankruptcy puts an end to that worry because bankruptcy is a plan.

2) Stops Creditor Harassment

Today with automated ‘robo-calls,’ creditors and collection agencies can harass you dozens of times a day or night, whether it’s dinner time, your kids bed time, or 6 a.m. on the weekend. When you file for bankruptcy, the harassing phone calls stop…completely and immediately. As soon as a creditor is notified that you have filed for bankruptcy, they are prevented from continuing any of their collection efforts, including telephone calls, letters, lawsuits, garnishments, foreclosure, and repossession.

3) Bankruptcy Will Often IMPROVE Your Credit Score

Many people believe that if they file for bankruptcy, their credit will be destroyed. The fact is that approximately 80% of the time, people’s credit actually IMPROVES! This is because many people that file for bankruptcy have already defaulted on their debts and have more debt than they’re able to pay, leading to low credit scores. Once a person files for bankruptcy and eliminates their debt, lenders often view the person as a better credit risk than they were before the bankruptcy!

4) Bankruptcy Can Stop Garnishments Cold

Thousands of people every year are bringing home much smaller paychecks because they are being garnished by a creditor. One of the easiest ways to stop a garnishment in its tracks is through filing bankruptcy. And as a bonus, most people can actually get part or all of their garnished funds paid BACK to them!

5) Stops Foreclosure and Repossession

Bankruptcy is often the best and sometimes the ONLY legal tool available to people to stop creditors from foreclosing on their homes or repossessing their cars. In Chapter 13 bankruptcy, debtors are given anywhere between 3 and 5 years to catch up on their back payments and become current.

6) Stop Court Cases

Few feeling are more miserable than being served with a lawsuit. The stress that it causes people can be overwhelming. Luckily, bankruptcy can stop most civil court cases in their tracks, and eliminate the cause of the lawsuit forever!

7) Helps with Tax Obligations

Being in debt with the IRS is no fun. And lately, IRS collection efforts have reached an all-time high! An experienced bankruptcy attorney can help to eliminate or reduce your tax debt obligations, and put you back on a patch to financial wellness. Each year, bankruptcy eliminates MILLIONS of dollars of tax debt for people all over the country.

8) Lets YOU Prioritize Your Debts, Not Your Creditors