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Four Things To Know About Filing Bankruptcy

When important decisions have to be made, it is best to make them with as much information as possible. When those decisions have to do with your monthly budget, the need for accurate information is at an all-time high. No one likes to struggle to make ends meet, but if that is your situation, you might consider filing for bankruptcy. Bankruptcy is a way to eliminate or reduce debt, making your budget more manageable and giving you a fresh financial start. But before you take the plunge, take a few minutes to learn about some of the bankruptcy basics and how filing a case can help you.

Four things to know about filing for bankruptcy are:

• The minute you file a case your creditors are no longer allowed to contact you. This includes calls, letters, and any pending litigation against you. If your wages are being garnished, the garnishment must also immediately stop. These benefits are courtesy of the automatic stay, which is a legal mechanism that prohibits collection action by your lenders the instant your bankruptcy case is filed.
• You will need to make a decision about what things you want to keep, and what you can live without. Most people file bankruptcy to eliminate credit card or medical debt, and free up their money to pay their house and car payments instead. If that is your choice, you need to understand that you have to pay for the things you keep, as bankruptcy is not about keeping collateral without paying.
• If you reaffirm a debt, that debt will remain due even after you case is finished. What this means is that if you skip a payment, the lender is now allowed to call you and ask for payment. This is in stark contrast to debts that are not reaffirmed. A debt that has not been reaffirmed does not have to be repaid and the creditor cannot ask you for payment.
• A Chapter 7 case is one where your debts are liquidated, meaning they will no longer be due once the discharge order is entered in your case. A Chapter 7 takes between 3 to 6 months to complete and will allow you to eliminate all of your unsecured debt. A Chapter 13 is more like debt consolidation, and during the case (which can take up to 5 years), you will pay back at least a portion of your unsecured debt.

We know you work hard for your money, and when it gets tight it can also get frustrating. But there is light at the end of the tunnel, and we can help you get there. Call us today to find out more about how filing for bankruptcy can help you.

For more information about how to handle overwhelming debt, contact us at We will help by coming up with solutions that work for you.

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