Too many people are conditioned to view bankruptcy as a final option – a last resort that somehow means they were ineffective at managing their personal finances. Unfortunately, many Americans don’t have the savings in place to cover financial emergencies such as medical debt, home repair or divorce and skyrocketing debt is a certainty. Bankruptcy is a valid option for those who have become overwhelmed by mounting debt.
While there is an alarmingly negative connotation behind filing bankruptcy, there are numerous positive results that individuals will experience, including:
- Debt elimination: Certain debts such as student loans or government fines might not be dischargeable through bankruptcy, but nearly all your unsecured debt can be eliminated. Unsecured debt can include medical bills, credit card bills and personal loans.
- Stop creditor harassment: After a bankruptcy is filed, the automatic stay begins. This is an element of the bankruptcy designed to stop creditor harassment and end any further collection efforts. Through the automatic stay, individuals can breathe easier knowing that harassing phone calls, letters and emails have finally stopped.
- Improved credit rating: While a credit score might initially drop after a bankruptcy filing, it gives individuals a chance at a fresh start. By building new credit through the use of secured credit cards or department store charge accounts, with hard work it is possible to improve a credit rating over time.
Bankruptcy might seem like a last resort to many individuals. In fact, if you are considering debt relief programs, it is likely that you should have already filed. Do not hesitate to speak with a skilled attorney who can answer your questions and provide guidance tailored to your unique circumstances.