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Are you hesitating when it comes to filing for bankruptcy?

On Behalf of | Apr 10, 2019 | Firm News |

Like many people, your financial struggles may have started small. You may have accrued a relatively small amount of credit card debt after making an expensive purchase, but you had the intention of paying it off quickly. Unfortunately, that or another similar scenario may have only sparked the beginning of your financial troubles.

A sudden event, like job loss or a serious medical emergency, may have shattered your financial security. As a result, that small amount of credit card debt may have snowballed into something more unmanageable. Now, you are considering bankruptcy, but you still have some trepidation regarding the possible outcomes.

Benefits of bankruptcy

If you worry that bankruptcy will do more harm than good, you are not alone. Numerous people hold misconceptions regarding bankruptcy, and as a result, they often deprive themselves of a beneficial debt relief option. By having the right information, you could better understand how bankruptcy could help you.

If you already face wage garnishment, foreclosure on your home or having your utilities shut off, you certainly know you are in a dire situation. What you may not know is that bankruptcy can help stop all of these actions. Additionally, if creditors and collections agencies have been calling you seemingly nonstop, filing for bankruptcy will enact an automatic stay that prevents them from continuing these actions (for at least a period of time).

Downsides of debt relief

Certainly, some of the negative aspects of bankruptcy do hold some truth. For instance, completing the bankruptcy process will result in a lowered credit score, and the fact that you filed for bankruptcy will remain on your credit report for some time. However, these factors alone should not dissuade you from seriously considering bankruptcy. After completing the process, you can work to improve your credit score through various means.

You may even start thinking about rebuilding your credit while your case is open. For example, you may choose to make a reaffirmation of a debt, which means that this specific debt does not play a part in your bankruptcy proceedings. This option could prove useful if you have the funds to address the remaining debt because making regular payments on a loan could improve your score.

Gaining more information

While a lot of information is available regarding bankruptcy, it is difficult to know what is correct. Instead of relying on questionable sources, you may want to take the time to discuss your predicament with a California bankruptcy attorney.