What Happens When You File for Bankruptcy
When you are dealing with debt issues, you may be wondering what your options are to resolve them. An experienced and trusted bankruptcy lawyer like one from Carolyn Secor, P.A. can help you learn about the debt relief resources that you can take advantage of so that you can improve your financial situation. Filing for bankruptcy is not an easy decision to make because of the major consequences involved, but depending on your circumstances, it may be the clearest path forward towards achieving true financial freedom. Here is what you can expect after filing for bankruptcy.
Harassment From Creditors Stops
One of the advantages of bankruptcy is that it provides debtors instant relief from harassment from creditors. Immediately after you file for bankruptcy, all debt collection efforts must be stopped. Creditors will no longer be allowed to contact you in any way about your debt payments. For many people facing overwhelming debt, this greatly reduces stress and provides peace of mind.
Taking the Credit Counseling Course
Before you proceed to file for bankruptcy, you first must take an online credit counseling course, which is required by law. It is also known as a debtor education course. The course is roughly an hour long, and includes information about the bankruptcy process, financial management basics, budgeting strategies, the consequences of filing for bankruptcy and alternatives to bankruptcy that may be available to you. You must complete this course before your debts can be discharged and finalize the bankruptcy process.
Expect a Lower Credit Score
A reduced credit score is one of the biggest consequences of filing for bankruptcy. This can make it difficult for debtors to obtain new loans, such as for a car. Bankruptcy can result in your score being lowered approximately 50 to 100 points, depending on the type of debts you have and your previous credit history. However, generally the higher your starting score is, the more points off of your credit score you may lose.
You Have a Clean Slate
Though bankruptcy has its consequences, the damage is not permanent. It is possible for you to recover and build your credit not long after your debts are wiped out. Some debtors have even seen their credit score increase gradually a few months after going through the bankruptcy process. You will have the knowledge to make smart financial choices that will help you avoid experiencing new debt issues.
Bankruptcy involves many steps, and every debtor faces unique challenges after filing. If you need assistance determining whether bankruptcy is right for you, contact a bankruptcy lawyer now.