You try your best to budget. You work hard and make your payments as best you can. Unfortunately, bills can get out of hand. Unexpected expenses pop up. Before you know it, you find yourself struggling to divvy up your paycheck. Struggling with debt is more common than you may think. Falling behind on payments can be stressful. You may feel like you have no options and that nothing can protect you as creditors have started calling you constantly.
You worry about losing your car and your house. Without a place to live and transportation, you can’t work. If you can’t work, you can’t even begin to catch up on paying your bills. You fear that things will just keep getting worse. Filing for bankruptcy may be the best option for you.
What protections does filing for bankruptcy offer?
Filing for bankruptcy isn’t what many people think. Unfortunately, the idea of bankruptcy has gained a bad rap by people who don’t really understand it. For individuals trying to climb out of debt and get back on track, bankruptcy can help you do that with your best foot forward.
Bankruptcy helps in several ways including:
- Stops those awful creditor calls. Federal laws prohibit collectors from contacting you once you’ve filed for bankruptcy. Creditors must obtain special permission through bankruptcy court to pursue further action after you file.
- Keeps your car from being repossessed. You can file either Chapter 7 or Chapter 13 bankruptcy to enact an automatic stay. This prevents lenders from repossessing your vehicle for a period of time. You can decide if you want to discharge your car debt and lose the car, or continue to make payments. When you file Chapter 13, you may have the option to create a manageable repayment plan, allowing you to keep your car.
- Ends wage garnishment. When you file, your employer and creditors will be notified in order to put an immediate end to the garnishing of your wages. This is true for debts that can be discharged through the bankruptcy processes. You must note that child support, student loans and other items do not qualify.
- Puts an end or a pause on your home foreclosure. Homeowners have protections through both chapter 7 and chapter 13 bankruptcy. If you are current on your mortgage payments but have other debt, Chapter 7 will temporarily stop a foreclosure. If you are behind on your mortgage, filing for chapter 13 bankruptcy can stop the foreclosure sale of your home. You must be able to make payments through a plan after your case is filed.
Filing for bankruptcy can be complicated. Working with a professional can help ease your concerns. Don’t feel as if you have no options. If you’re overwhelmed by your debt, look into filing for bankruptcy to see if it is the right option for you.