For many Americans, debt has reached crisis levels. In fact, the average person in the U.S. owes roughly $93,000 to creditors. This figure includes about $5,000 in credit card debt and more than $16,000 in personal loans.
While having some debt usually makes good financial sense, accumulating too much may ruin both your credit score and mental health. Fortunately, a bankruptcy attorney may be able to help you make a fresh start in three critical ways.
1. Stop collections activities
There should be more to life than constantly struggling to pay monthly bills, credit card minimum payments, medical expenses, student loans and other debts. If you fall behind, though, you may experience anxiety every time the phone rings or you walk to the mailbox. Your bankruptcy attorney can probably stop collections activities in their tracks, at least temporarily.
2. Address outstanding debt
Your bankruptcy attorney should explain all your options for debt relief. Depending on the type of bankruptcy you choose, you may be able to discharge many of your outstanding debts. Alternatively, you may be able to come up with a repayment plan you can afford. Either way, you may be able to keep many of your assets.
3. Prepare a workable budget
After your bankruptcy process concludes, you are likely to have additional resources to devote to your remaining debts. Rather than constantly worrying about paying bills, you can prepare a workable budget.
If you stick to your budget, your credit score is likely to rise. Your bankruptcy attorney may recommend other ways to secure your financial future. Addressing your debt proactively, though, is likely the first step on your road to financial recovery.