As you consider your options for getting out of debt, you may be hesitant to choose the route of bankruptcy for various reasons. Perhaps you fear losing meaningful assets or ruining your credit. Maybe you are unsure if such an approach is even moral.
The truth is that bankruptcy comes with numerous benefits that may help ease your worries on the matter. Talk to a bankruptcy lawyer to determine if it is the right fit for your financial circumstances so you can experience these positive effects.
Regardless of the type of bankruptcy you claim, you will not lose all your assets. Each bankruptcy chapter comes with its own list of protected property and income, and state laws allow for additional exemptions. Which assets you want to safeguard may affect how you file.
Immediate relief from creditors
As soon as you file for bankruptcy, the court issues a stay to all your creditors, which puts an immediate end to:
- Wage garnishment
The stay is temporary, except for harassment, but your attorney can help you decide what steps to take so you can retain your property and limit interaction with creditors.
A fresh start
While it is true that bankruptcy hurts your credit, the harm is only temporary and is less consequential than remaining in your current situation. You can rebuild your credit within years to better than before and even qualify for loans and credit cards in a short time. These are likely to have high interest rates, however, so you need to manage your money wisely to avoid getting into trouble again.
Peace of mind
With all your focus on numbers and legal issues, you may have put aside your emotional well-being. However, having a solid plan for eliminating debt alleviates stress from chaos and confusion. Once you file, you will have peace from taking action and knowing you are on track to financial freedom.