Macco Law Group, LLP

Bankruptcy is meant to help you regain control of your finances

Bankruptcy is meant to help you regain control of your finances

Your finances shouldn’t be the top stressor in your life. When they are, you need evaluate the circumstances to determine what you need to do. You might be tired of always worrying about how you are going to pay bills. You may dread the thought of hearing the phone ring or of getting the mail. You could be losing sleep because of all of this.

When you feel like you are drowning in debt, you may want to find out if you might be able to file for bankruptcy. Bankruptcy is actually a tool that can sometimes help people regain control of their finances. Below is some important information for those considering filing for bankruptcy protection.

Two types of consumer bankruptcy

There are two main types of consumer bankruptciesChapter 13 and Chapter 7. There are a few differences between these two. One primary difference is that you have to make regular repayments to the bankruptcy trustee if you file under Chapter 13. Certain of your assets may be sold to pay off as much debt as possible in a Chapter 7, but you won’t have to make regular payments to the trustee.

Relief from collection attempts

All bankruptcies generally put in place an automatic stay, which is an order that prevents creditors from being able to contact you in an attempt to collect the debt during the bankruptcy process. This means that the irksome phone calls and unwanted mail should stop. They generally can’t email you or contact you in any form to try to get money out of you.

Reasons for getting into debt vary

Some people think that debt occurs as a result of irresponsible spending. While this is sometimes the case, the vast majority of debt that leads to bankruptcy comes from medical bills. This is a double-edged sword, as illness or injury typically include loss of income along with increased expenses for the necessary medical care.

Conditions apply

Bankruptcy isn’t without challenges. You generally have to take mandatory classes and go through credit counseling. You will deal with impacts to your credit report and score for years to come. Eventually, it will likely become necessary to start to build your credit again, but you will have to make sure you do so responsibly. A bankruptcy attorney can help you decide if this is the best decision for your particular situation.