Living check to check is not a rare occurrence for many families in today’s economy. While this isn’t inherently bad, it does become a slippery slope when financial hardship strikes. Losing a job, suffering a medical problem and even divorce can significantly influence your ability to make ends meet. Even worse, is that debt obligations get put on the back burner and many people begin to rely on credit to get by. Luckily, bankruptcy can help in the following ways:
Stop collections—one of the most immediate benefits of filing for bankruptcy is the issue of the automatic stay order. This court order halts all debt collection activities and prohibits creditors from contacting you. You will be free from the stress of collections while you work towards debt relief.
Discharge debts— growing debt burdens often become unbearable when you begin to find yourself missing payments or using one line of credit to pay another. When you file for bankruptcy, much of your unsecured debt burden is discharged. Debts like credit card bills, utility bills, medical bills and even some loans can be eliminated in bankruptcy.
Protect assets – although some people associate bankruptcy with losing assets, the opposite is quite true. Filing for bankruptcy can protect against foreclosure and repossession. As your debts are being evaluated for discharge, you can protect your home and car from being seized by creditors until a resolution agreement is reached. Further, much of your personal property is protected under bankruptcy exemption laws.
Regain stability—missing payments, over using credit and carrying around a damaged credit score is no way to live. Once your debts are discharged in bankruptcy, your financial situation will be relieved and your credit score is likely to see improvement. Even better, your future at good credit and stable finances is in closer reach than ever before.
It is important to note that not all debts are eligible for bankruptcy and not all assets will meet exemption criteria. Therefore, always consult with your Cincinnati bankruptcy lawyer about your financial situation before you file a petition.