How Bankruptcy Provides a Fresh Start!
Jan 30, 2024If you are struggling financially, you are not alone. With the cost of living continuing to rise, many people are having a hard time making ends meet. Even without a serious medical condition or job loss, it is easy to become overwhelmed with debt. Maybe you have already tried various debt relief options, but nothing seems to be working. There are many misconceptions about bankruptcy, but it could be the debt relief solution you are looking for. Let’s discuss how bankruptcy can eliminate your debt, help get your finances back on track and give you the fresh start you need.
Not being able to repay excessive debt can make you feel trapped with no way out. Bankruptcy can help release you from the financial burden upon Discharge. A Chapter 7 Bankruptcy eliminates unsecured debts such as credit cards, personal loans, medical bills, and money judgments. When it comes to secured debts, like your home or car loan, you have a choice. You can keep the asset and reaffirm the debt, or you can surrender the asset and no longer be responsible for the debt. Bankruptcy can discharge the debts you are unable to pay and can provide the necessary financial relief you need to start fresh.
STOP CREDITOR HARRASSMENT
Discharge of your debts officially happens at the end of your bankruptcy case, however, harassment from your creditors must stop once your bankruptcy is filed. Creditors must stop sending collection letters, stop collection calls and stop wage garnishments. The protection from your creditors is due to the Automatic Stay, which is an order put in place directly by the bankruptcy court once your bankruptcy is filed. In a Chapter 13 Bankruptcy, the Automatic Stay can also stop foreclosure and stop vehicle repossession. Being harassed by your creditors can make a difficult situation even worse. Filing for bankruptcy can put an end to creditor harassment and give you the relief you need.
PROTECT YOUR ASSETS
A common misconception about bankruptcy is that you will lose all your assets. While the bankruptcy court requires you to list all your assets when you file bankruptcy, you can protect them using the bankruptcy exemptions allowed in your state. In the State of Wisconsin, you can use state exemptions or federal exemptions to protect your assets. There are exemptions to protect the equity in your home, vehicles, household goods, jewelry, tools of the trade, bank accounts and retirement accounts, just to list a few. Bankruptcy allows most middle-class households to exempt everything they own and keep all of their assets.
REVAMP YOUR BUDGET
Trying to follow a budget can be stressful when there is not enough money to go around. After bankruptcy you will no longer need to make payments on your unsecured debts. This will allow you to create a new budget that you can follow. Money may still be tight but freedom from your debts should free up some money for savings. Even if you are only able to put $100 a month into savings, it is a start. Having savings will help you stay debt free. When life happens and emergencies arise, you will no longer need to rely on credit cards. Bankruptcy can help you add savings into your budget.
Bankruptcy doesn’t ruin your credit; it helps you get your finances back on track so you can begin to repair your credit. While bankruptcy can have a negative impact on your credit score in the short-term, it can actually improve your credit score in the long-term. In fact, those with a very poor credit rating prior to filing bankruptcy may see an immediate improvement in their credit score. Those with an excellent credit rating prior to filing will have the most negative impact. Regardless, if you take the right steps to rebuild your credit after bankruptcy, it is possible to see a significant improvement in your credit score a year after receiving your bankruptcy discharge. Bankruptcy can give you a fresh start, but what you do after filing bankruptcy matters.
Bankruptcy is not right for everyone, but it can be the best option for many. At Pedersen Law Office, LLC we understand how stressful being in debt can be; that is why we offer free consultations. We will discuss your circumstances and goals to help figure out what debt relief option is best for you and help you through the entire process. Our law office serves the communities of Appleton, Neenah, Menasha, Oshkosh, Green Bay and their surrounding areas.