People file bankruptcy for a myriad of reasons: job loss, divorce, medical bills, extensive credit card debt, tax liens, judgments, garnishments – the list goes on. No matter what the reason is, many people are afraid to even talk about bankruptcy because of all the myths and untruths surrounding it. As an expert in Chapter 7 bankruptcy, I can dispel those myths and show you the tremendous benefits one can receive from filing for bankruptcy, and if it could be right for you.
Those nasty creditor calls: if you are being constantly harassed by creditors calling you at all hours, bankruptcy could help. Creditors have a way of creating instant panic in most people. They are trained in ways to intimidate and scare you into paying debts that you cannot afford. By filing for Chapter 7 bankruptcy protection, by law, creditors are not allowed to make those unpleasant calls anymore. If they do, they can be hit with penalties, which are stiff fines. Many clients have indicated the relief they felt when the phone finally stopped ringing.
Judgments: If an individual or a company (many credit card companies utilize this) sues you and you ignore the suit, you will lose, and a judgment will be filed against you for the amount due. Judgments are terrible; they can lead to the garnishment of your pay check and/or bank accounts, and they also can keep you from selling or buying a home. Judgments can be eliminated in a bankruptcy by filing a motion and having a hearing (which you don’t even have to attend). Simple as that.
Medical bills and credit card debt: These are the simplest things to get rid of in a bankruptcy. They are considered unsecured debts and are therefore discharged in your bankruptcy.
Your assets: If you have a home that’s underwater (you owe more than it’s worth) and you want to get out from under your mortgage(s), bankruptcy will help. You can surrender your home in bankruptcy and eliminate all the mortgage debt you owe. If you want to keep your home (your payments must be current), you can reaffirm the debt with your mortgage company, as long as the equity in your house is minimal (under $21,500). Same for automobiles, furniture, bank accounts, jewelry and other assets – Federal bankruptcy laws allow you keep these assets to a certain point, through exemptions. Any retirement funds you have are also 100% protected.
Another myth about bankruptcy: your credit score will drop dramatically. This is just not the case. Yes, a Chapter 7 bankruptcy will stay on your credit report for 10 years, but that’s not always a bad thing. Most of my clients’ credit scores improve dramatically (up to 100 points in a year) in the year or so after their bankruptcy discharge. This is because I can give you the tools to rebuild your credit, and it’s a very simple process. Also, after bankruptcy, many creditors will look at you as a good risk. This is because one you receive a discharge from Chapter 7 bankruptcy, you cannot file again for at least 8 years. Many creditors see this as desirable, since you cannot obtain credit and then turn around and file for bankruptcy again.
I hope I have helped you have a better understanding of the Chapter 7 bankruptcy process. If you have any (or all!) of the problems listed above, don’t panic. There IS a light at the end of the tunnel and a fresh start is possible for you. Feel free to call my office at 404-783-2244 or email me at s[email protected]. Start living your life without the black cloud of enormous debt hanging over you.