When you get hopelessly behind in your debt and don’t see a way to pay everything you owe, bankruptcy can give you financial relief. You can get a fresh start on a debt-free future in as little as three to six months by filing a Chapter 7 bankruptcy.
When you file bankruptcy, you will get an automatic stay preventing your creditors from any further action taken against you to collect on your debt. All phone calls, letters, wage garnishments, evictions, foreclosures, and utility shut-offs will stop. If a creditor violates the stay, you can take them to court for damages.
Once they decide to file bankruptcy, most people feel almost immediate relief from their crushing debt. Your bankruptcy attorney can help you determine what chapter of bankruptcy will best suit your needs — allowing you to keep the most assets and discharging the most debt.
Most of your unsecured debt will be eliminated in bankruptcy. Unsecured debt is based on your credit score and a promise to pay, such as credit cards, medical debt, payday loans, and other personal loans. Secured debt has collateral attached to it and works a little differently in bankruptcy. If you would like to keep your home and vehicle, you will need to make a court-approved plan as to how you plan to pay the arrears. Additionally, you will need to pay your current mortgage and car note if you wish to keep the collateral.
Some debt can never be wiped away in bankruptcy. Alimony, child support, current taxes, and fines and fees to government agencies cannot be eliminated no matter what type of bankruptcy you file. Not paying these obligations can get you in serious trouble and perhaps even a bit of jail time.
Bankruptcy allows you to eliminate all of your qualifying debt, essentially wiping to start clearing your credit report. Contact a Sacramento bankruptcy attorney today to find out how bankruptcy can help you.