Bankruptcy can be helpful in finding consumers a path out of unmanageable debt. Many people, however, don't fully understand what it means to file for bankruptcy or the benefits it provides. The bankruptcy lawyers at the Watson Law Firm of Harrison have over three decades of experience serving clients throughout the Harrison, AR, area. Below, they share some insights into what it means to file for bankruptcy.

Collection Action Stops

When you file for bankruptcy, all collection action against you is legally stopped. This means no more harassing phone calls and letters, as well as an end to any legal action your creditors may be taking. You now have valuable time to consider your financial affairs and how you want to proceed moving forward.

Most Types of Debt Are Eliminated

By far the most helpful benefit of bankruptcy is its elimination of debt. Most types of unsecured debt will be wiped away during the bankruptcy process. Credit card bills, back rent, overdue medical expenses, and more will usually qualify for dismissal. Some notable exceptions may include student loan debt and all late child support payments.

Foreclosure Might Be Avoided

A bankruptcy filing issues an automatic stay on foreclosures. This provides you with the opportunity to think about whether or not it's in your best financial interests to keep or sell your property. Your bankruptcy lawyer will help you understand your options — and you do have options available, even in bankruptcy.

Debt Reorganization

When you file for Chapter 13 bankruptcy, your debts are not eliminated, but instead reorganized. During this process, some debts may be settled for less than what you owe. Over the next three to five years — depending on the plan you agree to — you then repay your debts at a monthly amount that is more feasible for your financial situation.

Contact Watson Law Firm of Harrison online to schedule a consultation with a bankruptcy lawyer. They also offer services as a personal injury, criminal law, and family law attorney. They can be reached by phone at (870) 704-4037 or via their Facebook or Twitter pages. By knowing what it means to file for bankruptcy, you can empower yourself with the information you need to reclaim your financial future.