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3 Ways Filing for Bankruptcy Can Save Your Finances

While filing for bankruptcy in Ohio is never ideal, it’s often a misunderstood and dreaded option when trying to deal with debt. But bankruptcy doesn’t have to be intimidating. It is simply a tool to help you get out of debt, and provide a means to organize your finances. Bankruptcy can actually be extremely beneficial and, while it may not be your first choice, it shouldn’t be completely disregarded. There are several ways filing for bankruptcy can actually help your finances.

 

Get some breathing room with an Automatic Stay

Once you file the paperwork for bankruptcy, an Automatic Stay immediately goes into effect. This Stay prohibits creditors from taking any further action to collect debts owed to them, and it’s a powerful tool in helping get your finances together. With few exceptions, during the duration of the Stay creditors cannot initiate or maintain collection activities against you, nor can they sue, foreclose on or repossess property. They cannot garnish wages, or contact you regarding the debts they’re owed. This Stay gives you time to speak with a bankruptcy attorney, gather records and information, and plan your next steps to dealing with debt.

 

Reorganize and Eliminate Debts

One of the biggest reasons to declare bankruptcy is to discharge debt. Many debts can be partially or fully wiped out, eliminating your liability to pay back several different types of debt. These include credit card debt, medical debt and personal loans. However, not all debt is dischargeable. Some debts such as tax obligations, child support and student loans are unable to be discharged. If you’re filing Chapter 13, declaring bankruptcy can help you reorganize your debt. This gives you time to catch up on missing payments for mortgages and other loans, along with developing repayment plans for other debts. 

 

Avoid Foreclosure and Repossession

Debt can be devastating, because it can literally take the roof from over your head. Foreclosure is a very real possibility. This is why declaring bankruptcy can be so helpful. If you’re facing the possibility of foreclosure, the Automatic Stay which goes into effect can arrest the process, and give you time to figure out your financial situation. This can give you time to speak with a bankruptcy lawyer and establish the next steps. It gives you a chance to negotiate with the bank or lender, and establish a timeline to bring your account up to speed. Filing Chapter 13 also gives you an opportunity to catch up on missed payments, and a chance to keep your home. 

Bankruptcy doesn’t have to be a bad thing. It was established as a way for people to get out from under debt, as a chance for them to hit the financial reset button and start again. There are certainly repercussions, but often the benefits outweigh them. Declaring Bankruptcy can give you a second chance, and the professionals at Sheppard Law Offices are here to help. They’re experts in Chapter 7 and Chapter 13 bankruptcy, and everything in between. Whether you’re worried about foreclosure, or how personal bankruptcy or business bankruptcy will affect you, Sheppard Law Offices are available to help you every step of the way. 

We proudly have five locations in Ohio and are ready to help you. Contact us to schedule your free 30-minute consultation with local bankruptcy lawyers.