How to Know When You Could Benefit from the Bankruptcy Laws
Posted on: 11 January 2024
Falling into financial distress can be a challenging and overwhelming experience. If you're having trouble keeping up with your debts and bills, you may have considered bankruptcy as a solution. While it may not be the most desirable option, it could help you to turn your finances around and start afresh. In this blog, we discuss the signs that you could benefit from bankruptcy laws.
1. You struggle to meet your debt obligations
If you find that you're struggling to make your monthly debt payments and that you're constantly falling behind on your bills, then filing for bankruptcy could be a great relief. With Chapter 13 bankruptcy, you can create a repayment plan that allows you to pay back your debts at a reduced rate over three to five years, with no collection activity or interest accumulation during this time.
2. Your wages are being garnished
If you've been served with a wage garnishment order, you might know how it feels to have a significant amount of your wages taken directly out of your paycheck to pay towards debts. If you file for bankruptcy, it can put an end to wage garnishment, providing you with some financial relief and enabling you to start afresh.
3. You face foreclosure
If you're unable to meet your mortgage payments and have fallen behind, then you may face foreclosure. Bankruptcy can help by causing an automatic stay, which temporarily halts the foreclosure and allows you to reorganize your finances and work something else out with the mortgage lender. You may also be eligible for a mortgage modification, which will reduce your monthly payments and make it easier for you to keep up.
4. You're facing legal action
If you're unable to meet your debts, your lenders may initiate legal action against you. Filing for bankruptcy before the legal proceedings can help put an end to the legal actions and keep your assets from being seized.
5. You're struggling with significant medical bills
If you're facing overwhelming medical bills and are unable to pay them, then bankruptcy could be an option. Medical bills are notorious for being significant and coming unexpectedly, leading many individuals to file for bankruptcy to receive a reprieve.
If you're struggling financially and have considered filing for bankruptcy, it's important to discuss this option with a financial counselor with experience in bankruptcy laws. Take the time to understand the nuances involved and the possible outcomes of filing for bankruptcy. It's not the end of the world, but rather an option to help you start afresh. Take the time to approach the situation strategically and logically.
For more information about bankruptcy law, contact a lawyer in your area.
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