Dealing with debt is overwhelming. The impact on your personal life can be stressful. As a result, people often search for debt relief options to help.  Bankruptcy is one debt relief option that can eliminate debt. There are long and short-term benefits to filing bankruptcy. Knowing them ahead of time can help you make the right decision.

Long And Short Term Benefits To Filing Bankruptcy

First, filing for bankruptcy provides protection from creditors. When your case is filed the court issues an automatic stay. This order prevents creditors from contacting you. There will be no more collection calls or letters. Also, any pending lawsuits will stop. Your creditors will be required to go through the court if the wish to obtain further payments from you.  If a creditor tries to contact you they could face legal consequences. Always tell your Sacramento bankruptcy lawyer if a creditor contacts you after your bankruptcy case has been filed.

In addition, you will not make any more direct payments to unsecured creditors. Your Trustee will make any future payments if they need to be made to credit card companies or medical providers. If you file for Chapter 7, the Trustee can pay certain creditors from any non-exempt property that is part of your estate. That means that you can start using your income to catch up on mortgage payments and car loans. If you file for Chapter 13, you will likely pay a small consolidated payment each month that is intended for unsecured creditors to share. The court uses your income and other expenses to determine your payment amount. Remember that your case is unique and what you might owe is for the court to decide.

Once your have completed all of the necessary steps in your case you will received a discharge order that will provide you with permanent relief from most common debts. As a result, the discharge order releases you from future responsibility most credit cards, personal loans, and medical debts. You will no longer need to worry about those debts. You will no longer owe that creditor anything. However, there are some debts you may still owe. Often times your mortgage and domestic support obligations will remain after the case is over. Speak to your Sacramento bankruptcy lawyer about these debts after your discharge.