How Can Filing for Bankruptcy Help Me?

how can filing for bankruptcy help meIf you are struggling in debt, we know that the thought of bankruptcy has probably crossed your mind. However, many people put off filing because they think they do not want to admit failure to their family and friends. Please understand that bankruptcy is a legal process that can help you get back onto sound financial footing.

Today, we want to give a brief overview of some of the things bankruptcy can do. Please speak with an Arizona bankruptcy attorney to get an in-depth analysis of your particular situation.

What This Can Stop

First, we want to talk about what bankruptcy can stop.

  • Bill collectors – if you are being bombarded with calls from collections agencies, filing for bankruptcy will stop them cold. After you file, they legally cannot continue collections efforts.
  • Lawsuits – many creditors file lawsuits against the person who owes them money. Filing will put a stop to those.
  • Repossessions – if you are behind on payments to your vehicle, motorcycle, or RV, you may be faced with the prospect of having them repossessed. This can be nerve-wracking because you feel like you have to watch for a tow truck all the time. Filing will put a stop to any repossession effort.
  • Foreclosures – you do not want to lose your home and this is one of the main reasons people file for bankruptcy. In Arizona, your “homestead” is exempt during the bankruptcy process up to $150,000. Filing for bankruptcy BEFORE the foreclosure deadline is vital to protect your home.
  • Garnishments – creditors can garnish your wages and taxes (depending on what the debt is and who the creditor is). Filing for bankruptcy can stop these garnishments.

*Please know that this is not a complete list and that you should always speak with a qualified Arizona bankruptcy attorney about your particular situation.

Rebuilding For The Future

Bankruptcy can help stop your credit score from going even lower than it already is. Yes, bankruptcy is a negative that will show up on your credit report, but by filing, you will be discharging all of that bad debt. It is not uncommon for people to quickly rebuild their credit score after a bankruptcy.

Both Chapter 7 and Chapter 13 offer paths forward for those being crushed by debt. The first step is to use your money to build up a little safety net in your checking or savings account. Then, with a new sense of financial freedom, you can start small when rebuilding your credit, perhaps with a secured credit card.

  • Pay your card in full each month by using it only at places you would pay cash at anyway.
  • Limit your credit balance to 30% or less of the total amount.

Over a relatively short period of time, you will see your score go up and you will receive more credit offers. However, please remember how you got into debt in the first place. Just because you CAN get credit does not mean it is a good idea to use it.

Why An Attorney Is So Important

The bankruptcy process can be tedious for anyone who does not do this on a regular basis. The paperwork alone is enough to send many people running. An attorney will ensure that everything is done by the books so you can get this process completed as quickly as possible.

An Arizona bankruptcy attorney understands the exemptions of this state, how to handle creditors and trustees, as we as the court process. Please, do this right so you can get your financial life back on track.

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