When you hear the word bankruptcy, you may want to shudder. The word itself can bring up bad thoughts. Debt and bankruptcy can destroy a person's credit, which will affect him or her for years to come.
You might wonder how they could get that far into debt, but it is much easier than you could imagine. Many people live above their means. Others can't afford their basic needs and have to reach for credit cards in order to buy groceries. The simple truth is that it happens easily. It could even happen to you! When facing a mountain of debt with nowhere to turn, you might be considering bankruptcy. Though you don't want to, it might be your best option.
Here are some reasons why.
It erases most of your debt. If you file for Chapter 7 bankruptcy, your debt will be wiped out. This includes any loans, medical bills, credit card debt, and even some of your bills that are past due. This being said, you will still be required to pay back some debts, like child support and student loan debt. However, by getting rid of most of your debt, it will actually be easier to pay off the remaining debt. You could be debt free much sooner than you ever imagined.
Your credit score could actually increase. Though most people think that your credit will plummet, the truth is that when you are that deep in debt, your credit is already in shambles. By erasing your debt and working on your credit, you will notice that your credit score will improve in the first year.
In fact, you may have a better chance at getting a loan after bankruptcy, than before you file. When your credit is that bad, you aren't going to be able to get a loan or even a credit card. However, once you file and work on your credit, you should be able to get new credit within eighteen months. That being said, your access to credit will be low, until ten years are up, and your bankruptcy will be erased from your file.
You won't be stuck in collection hell. Once you are behind on payments, you may be looking at late fees, interest, and even collections. People may be calling you constantly, trying to figure out when they will get paid. This can be really stressful, so you may want to consider bankruptcy in order to end those calls.
Deciding whether or not to file bankruptcy can be hard. You don't want your credit to go down, but living day-to-day with collection calls and all of your bills over your head can be overwhelming. Even worse, you may not feel like there is anything that you can do to improve the situation. You pay as much as you can every month, only to see your bills continue to grow.
Starting over with little to no debt could really change your life! Your credit may even improve, because you are able to pay off the debts that you have left! In fact, in a few short months, you may be able to get a loan again. With all of your debt now, that may seem impossible. You won't be able to make a change, unless you do something drastic!
If you are struggling with debt and are unsure about whether or not you should file for bankruptcy, you should contact us today. We would be glad to talk to you about your options. If we decide that bankruptcy is your best option, we will help you every step of the way.