Declaring bankruptcy has helped numerous people get back on track with their finances after experiencing overwhelming debt. However, it’s a big decision to make, and it isn’t necessarily the right solution for everyone. So, if you’re considering this option to help with financial troubles, it’s essential to have a clear understanding of what bankruptcy can and cannot do. Before starting the process, consult with an attorney who is experienced in this area. They will provide all the information you need to best achieve debt relief. Below is an overview of what to expect from this process.
What It Can Achieve
One of the most important actions bankruptcy does is stop creditors from attempting to collect what you owe. If the creditors decide to file a lawsuit against you, they may be able to garnish your wages or take money straight from your bank account. Fortunately, as soon as you file bankruptcy, you will be granted an automatic stay that keeps creditors from continuing their collection efforts. A Chapter 7 bankruptcy will let you discharge all unsecured debt, therefore eliminating financial obligation to pay back items like credit card bills, personal loans, and utility expenses. Additionally, a Chapter 13 bankruptcy can help you avoid foreclosure and repossession by letting you reorganize the debts into an affordable payment plan.
What It Cannot Do
Bankruptcy is designed to help get rid of unsecured debt; thus, it cannot discharge any debt that is secured. Typically, this includes court-ordered child support and alimony responsibilities, student loans, and unpaid taxes. It also won’t eliminate any debt that arises after you file bankruptcy. Additionally, although you may be relieved of debts, bankruptcy won’t protect any co-signers you have.
Before you take full advantage of all the benefits bankruptcy can offer, learn how it works with the help of an experienced attorney. For almost two decades, the skilled legal team at The Gil Law Firm has assisted the residents of Dothan, AL, obtain financial freedom. They have a reputation for efficiently guiding clients through all the steps required to successfully get debts approved for discharge. Contact them at (334) 673-0100 to explore your options or visit their website to learn more about their law firm.