Unfortunately, many people fall on hard times and find themselves unable to keep up with their payments according to a bankruptcy lawyer residents trust. In some cases, it may make sense to file for bankruptcy, which wipes out your credit card debt and other unsecured loans in exchange for surrendering any assets of value you have to pay off your creditors. When you file bankruptcy, there are several things that happen right away – these things may surprise you! The sooner you know them, the better prepared you can be to plan accordingly. Here are five surprising things that happen when you file bankruptcy…
1) Creditors Stop Calling
Creditors stop calling you as soon as they know you’re going through bankruptcy. No more harassing phone calls, no more waiting for the other shoe to drop. Creditors will not be able to contact you about any new debts that accumulate during your bankruptcy case either. The primary reason creditors and debt collectors stop contacting you is because it’s against the law for them to try and collect from someone who has filed for bankruptcy protection.
2) You Can Keep Your Home and Car
One of the most common misconceptions about bankruptcy is that it forces you to give up your home or car. Not true! Whether you are filing for Chapter 7 or 13, you can keep your home and vehicle. The only exception is if your home or car is worth more than what you owe on it. You’ll have to pay a percentage of the equity in those assets back over time as part of your plan.
3) You Can Still Use Your Credit Card
One of the most common questions asked is: Can I still use my credit card? The answer is yes! You can’t be over spending money, but you can use your credit card to make purchases. If you are using a bank-issued debit card, you won’t be able to spend any money from your account. However, if you use a store-issued credit or debit card, you should be able to continue making purchases for now.
4) You Can Rebuild Your Credit
If you’ve hit rock bottom and filed for bankruptcy, the good news is that you can rebuild your credit. It may take some time, but it’s possible. In a Chapter 7 filing, all of your unsecured debts are canceled as long as they’re not business-related. But in a Chapter 13 filing, only a portion of your debt will be discharged. If you want to do everything in your power to get back on track as quickly as possible, then a Chapter 7 bankruptcy might be the right option for you.
5) You Can Get a Fresh Start
It’s hard to imagine, but filing for bankruptcy can be a fresh start for your finances. You’ll have the chance to get rid of debt and have a clean slate. Plus, you might qualify for new credit cards with better terms or find it easier to get loans. Don’t wait too long, though! There is no time limit on when you can file for bankruptcy, but if you’re struggling financially, the longer you wait the more debt you will incur.
Contact a bankruptcy lawyer today if you are considering filing for bankruptcy to protect your financial situation.