Drowning in debt, pressure from creditors and financial uncertainty can cause angst. You may feel hopeless and unsure of how to remedy your situation.
Bankruptcy gets an unnecessarily bad rap. While it does require some sacrifice, its benefits might allow you to regain control of your finances.
Alleviate debt
Debt can happen because of a lot of reasons from unexpected medical bills to job loss. You might have also experienced a bad investment, or you may have mismanaged your finances.
Depending on the types of debt you have, some of them may remain unaffected by bankruptcy. For example, you will still need to pay child support payments or legal fines for traffic tickets. However, a great deal of your debt will dissolve as a result of your bankruptcy filing.
Silence creditors
Constant inquiries from creditors demanding payment can cause panic and frustration. The relentless strategies that collection agencies often use may feel invasive. According to the American Bar Association, the law requires that collection efforts stop immediately once you file for bankruptcy. If you still receive requests for payment, you can file a motion for contempt of court against the creditors who continue to badger you.
Start over
One of the best ways to recover from bankruptcy is to identify what went wrong. Perhaps you did not have adequate savings, and an unexpected situation tanked your finances. Maybe you owned a business that went belly up and put you in a predicament. Or perhaps you relied too heavily on credit cards, and the payments were too much for you to afford.
Once you identify what triggered the downturn in your finances, you can implement steps to prevent making the same mistake again. Bankruptcy does not have to be negative. Leveraging it the right way can give you the opportunity to explore financial freedom once more.