If you struggle with insurmountable debt, declaring bankruptcy can help you regain financial freedom. Depending on the chapter you file, you can either eliminate all unsecured debt or restructure it into an affordable payment plan. According to the seasoned bankruptcy attorneys at the Knochel Law Offices, P.C., there are many more benefits to filing. Below, they explain what this option protects you from. 

What Does Bankruptcy Safeguard Against?

1. Creditor Harassment 

Once you start missing payments on your debt, creditors will begin calling incessantly and sending letters, threatening to place you in collections or take legal action. As soon as you file bankruptcy, an automatic stay takes effect, prohibiting creditors from such harassment. They must re-route all communication to your bankruptcy attorney instead. 

2. Wage Garnishments

Creditors commonly attempt to collect on the debt they are owed via wage garnishment. Whether you’re in danger of this threat or money is already being taken out of your paycheck, the automatic stay requires creditors to cease all collection efforts. 

3. Foreclosure 

If you’ve fallen behind on your mortgage payments, your lender may begin the foreclosure process. Fortunately, filing for bankruptcy often postpones the sale and gives you a chance to catch up on your loan payments. 

4. Repossession

Bankruptcy can also help you avoid car repossession. Filing prevents the lender from taking your vehicle back, but you must work to bring all loan payments current. If you can’t make up arrears, you might have the option to redeem the car or reaffirm the loan through bankruptcy.

5. Property Liens 

When creditors aren’t paid, they can seek a judicial lien by suing you in court. If successful, they can record it against your real estate or bank account. Doing so allows them to deduct funds or profit from your real estate sale. In some bankruptcy cases, you can remove liens to keep this from happening. 

6. Lawsuits 

Creditors may get aggressive about collecting the debt by bringing a lawsuit against you. If you file, a bankruptcy attorney will notify the judge to cease all activity in the collection suit. After a discharge, courts typically dismiss any impending lawsuits. 

To determine if this option can help your economic situation, let the experienced bankruptcy attorneys at the Knochel Law Offices, P.C., assess your debt problems and financial goals. Established in 1987, they have been helping Bullhead City, AZ, residents with quality legal counsel and step-by-step guidance through the filing process. Call (928) 444-1000 today to schedule a consultation, or visit them online to learn more about their background and expertise in this practice area.