2020 presented all Americans with a considerable fiscal challenge. Many families had little control over their income while layoffs and lockdown measures kept adults out of work. Using credit helps cover bills for essentials like clothing and food, but those creditors will eventually look to collect.
It is during times like this that many people consider filing for bankruptcy. Despite the negative connotations, bankruptcy exists to help people find the time they need to get their affairs in order and without creditors breathing down their necks. Those facing a considerable amount of debt in the new year might find relief through bankruptcy.
Consider the benefits of bankruptcy
Filing for bankruptcy may seem like a lengthy undertaking, but many filers find themselves in a much better position within a year. Bankruptcy can provide the following benefits:
- Control over debt: Filing for bankruptcy immediately grants an automatic stay from creditors, ceasing their harassment as filers choose between Chapter 7 or Chapter 13 bankruptcy. This stay can also stop wage garnishment and lawsuits.
- Credit score increase: Credit bureaus claim that bankruptcy will destroy a credit score. The truth is that most people considering bankruptcy have already bottomed-out their credit scores. Most people who file for bankruptcy report increases in credit scores as they begin to eliminate or satisfy their debts.
- Financial counseling: All filers will take instructional courses on money and credit management. These courses will teach responsible budgeting techniques that help identify and cut excessive spending. These techniques make for great New Year’s Resolutions!
- Room for negotiation: Bankruptcy is not the rigid and unforgiving process many people believe. The humans that manage bankruptcy cases understand the wide range of emotions and difficulties concerning personal finances. A lawyer experienced in bankruptcy can help work with creditors and debt collectors.
Take control with bankruptcy
Those looking for answers can bring their questions to a local lawyer experienced in helping Kentuckians find relief through bankruptcy. An attorney can help organize financial paperwork, manage creditors and serve as a trusted ally throughout the process.