On Monday we told you about Debt Doctors, a Lafayette, Ind. debt management company that closed after its owner died and left many of its customers contemplating bankruptcy.
According to the Lafayette Journal and Courier, Debt Doctors had 49 customers. Several of them have voiced complaints since the company closed that their debts have not been paid. Several customers have also said they are thinking about filing for bankruptcy because of the harassment they’re receiving from collections agencies.
“I’ll probably end up having to file bankruptcy,” said Marvin Hill to the Lafayette Journal and Courier. “It’s a mess. I hope justice gets served after they figure this out. I know there are others out there besides me. I didn’t ask for these nasty phone calls. I was trying to do the right thing.”
What Hill may not realize is that the benefits of bankruptcy may help solve all of his problems. Post bankruptcy life can be less stressful for those who had large amounts of debt. When you file for Chapter 7 or Chapter 13 bankruptcy, you eliminate collections attempts, garnishments, repossessions and lawsuits through an ‘automatic stay’. An automatic stay is the situation that goes into effect when you file for bankruptcy, when creditors can no longer take action against you to collect debts.
Bankruptcies generally eliminate unsecured debts like credit card debt and medical bills, meaning you’ll never have to worry about. Some people think that when they file for bankruptcy, they’ll lose everything they own and go through life with a poor credit rating. This is simply untrue. There are exemptions in each state for personal property, like homes and vehicles, which can help you save your assets. Bankruptcy also stops the foreclosure process, helping you stay in your home while working out a repayment plan.
As far as your personal credit score goes, you may experience a lower rating during the bankruptcy process, but there are ways to rebuild your credit following a bankruptcy. Open up a secured credit card, make payments on time, open an account with a large bank, and clean up your credit report and look for errors—these are ways anyone can rebuild a credit rating and credit score.
On Friday, we will discuss debt management companies and some of the problems associated with them. If you need relief from things like credit card debt and medical bills, bankruptcy can be a solution.
Our Washington DC and Maryland bankruptcy attorney can help you with a free consultation by filling out the contact form on this website or by calling (202) 483-6070 to schedule an appointment. We can offer you the best solution for whatever your debt issues may be.
Law Firm of Kevin D. Judd– Maryland and Washington DC bankruptcy lawyer