Filing for bankruptcy protection is a powerful tool for people who feel buried in debt. While considered a last resort, it is the quickest way to a fresh financial start. Many people have been able to recover successfully after a bankruptcy filing.
What Bankruptcy Can Do
Bankruptcy will wipe out credit card debt and other unsecured debts. Your credit card balance is unsecured debt, meaning the creditor does not have a lien or right to any of your property if you do not pay. Medical bills fall under unsecured debt, and bankruptcy will wipe out those as well.
However, if you choose to file Chapter 13 rather than Chapter 7, you may be responsible for a portion of your unsecured debt.
Bankruptcy will stop creditor harassment and collection activities. It will stop collection calls and letters immediately. Bankruptcy can even put a stop to a home foreclosure or car repossession. You may have a legal cause of action against creditors who try to collect after you file. A Maryland bankruptcy lawyer will be able to tell you more about that.
Bankruptcy can eliminate certain, but not all, kinds of liens. A lien is a creditor’s rights to take your property in the event you do not pay the debt. You can eliminate the lien if you invoke certain procedures during your bankruptcy.
Check next week’s blog for bankruptcy’s limits and what it cannot do for you.
Contact a Maryland bankruptcy attorney for more information about how bankruptcy can help you. A free and friendly consultation is available.