It probably goes without saying that simply knowing we have lingering debts can affect how we go about our daily lives. Feeling the weight of debts on our shoulders every single day can feel like too much to bear at times. Is our financial future going to be secure? Are there things we could be doing now to help reduce the impact of substantial debts? Some of us may want to avoid facing our debts altogether, especially if they have gotten out of hand. These are all normal questions and feelings that those with debts have, and there should be no shame in this experience.
Thankfully, there are resources available to those who are going through financial hardship. If your debts are causing you to not sleep very well at night, then bankruptcy may be a suitable option for you. This resource can serve as a path to a more secure financial footing for the long term.
Bankruptcy Prevents Repercussions
If you file for bankruptcy, such as Chapter 13 or Chapter 7, the bankruptcy court will enforce an automatic stay, which puts a stop to all collection efforts against you. This includes car repossession, property repossession, and mortgage foreclosure. With the automatic stay, you can take time to re-evaluate your finances without pestering from debt collection companies for payment. Debtors appeal to the benefits of the automatic stay because one of the things that causes them the most stress is constant phone calls and other actions from persistent debt collectors.
Bankruptcy Clears Your Debts
It is important to note that not all bankruptcy chapters result in complete eradication of your debts. Some debts may go away, and others may stay, it all depends on the unique financial situation of that individual. Certain bankruptcy chapters allow debtors to liquidate their assets as means to help pay off debts, while others allow the debtor to keep their possessions but they must partake in a repayment plan over the course of 3-5 years. You may find that your debts are eliminated entirely, or that you have a much more manageable set of debts that you can afford to pay off.
Bankruptcy Halts Wage Garnishment
What may keep a debtor up at night is wondering when the court will allow a creditor to garnish their wages or access their bank accounts in order to receive payment. This type of action is invasive and can feel like an overreach, but it can be lawful if the debt collector received rightful approval to do so. Wage garnishments and levies from bank accounts will be stopped as soon as bankruptcy is filed, leaving aggressive debt collectors with an inability to continue confiscating money from your earnings or accounts.
With all this being said, consider the risk of not facing your debts. They are unlikely to go away on their own, and the constant worry can cause you to become distracted. As a D.C. personal injury lawyer from Cohen & Cohen, P.C. explains, being tense and brain foggy from the weight of lingering debts can make someone vulnerable to being in an injury accident as well. The last thing you need during this time is to get injured on top of the debts you already are dealing with.