While some people may have a negative association with bankruptcy, it should be noted that it is very necessary for some people to rebound financially.
- Collections: It is a sad reality—if debt collectors cannot reach you, they will call your family members and employers in an attempt to contact you. Filing for bankruptcy triggers the “automatic stay,” which will put an end to these harassing forms of communication immediately as you work with your bankruptcy attorney.
- Garnishments and repossession: Having your items repossessed and your accounts garnished can be terribly embarrassing. If you have assets that are going to be taken, know that people who file for bankruptcy get to keep certain exempt items like cars and homes.
- Lawsuits: Collection lawsuits are frightening, especially for people struggling financially, as there are often added costs associated with court and attorney fees. Under most circumstances, filing for bankruptcy ends collections lawsuits because of the automatic stay, which goes into effect when you file for bankruptcy and prohibits all collections.
- Foreclosure: Under Chapter 13 bankruptcy, you can work out a repayment plan that may allow you to save your home by reorganizing your debt.
In addition to these great benefits, through a Chapter 7 filing, a debtor can discharge unsecured debt, like credit card debt or medical bills.
Who Files for Bankruptcy?
Filing for bankruptcy is not something that should be looked at in a negative light. Many celebrities and famous names, and millions of Americans, have had to file for bankruptcy due to insurmountable debts.
A recent bankruptcy case making national headlines involves Minnesota republican state Senator Sean Nienow, who filed for filed for Chapter 7 bankruptcy last month with nearly $931,000 in debts. Nienow and his wife are hoping to sell off all their nonessential assets to resolve their debts, which includes a small business loan from the federal government.
The bank that issued a $613,000 loan to the Nienows filed a lawsuit against the couple in January, seeking repayment. As we mentioned above, the bankruptcy filing may be an attempt by the couple to delay or resolve the lawsuit, as an automatic stay will go into effect.
If you have questions about bankruptcy and how it could help you recover financially, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.
Law Firm of Kevin D. Judd
Judd’s Judgment: There were more than 700,000 Chapter 7 bankruptcy cases filed nationwide in 2013.