Research shows that the average bankruptcy filer is older, married, and earns below $30,000 per year. Out of the three types of bankruptcies, Chapter 7 is the most common. Filing for bankruptcy affects your self-image and reputation. However, there are times when filing for bankruptcy could be a good idea. Read on to learn more.
Helps Keep Your Property
Studies show that over 6,300 people in the United States are evicted from their homes every day. However, over 95% of people in the U.S. who have filed for chapter seven bankruptcy get to keep all their belongings, including their houses. Once you file for bankruptcy, the law protects certain property (referred to as exempt property) from your creditors. As such, you can keep your house, monthly Social Security check, or your car — if it is protected by an exemption.
States have different assets that qualify as exempt property. If you are wanting to file for bankruptcy, it is advisable that you hire a bankruptcy lawyer. Your lawyer will walk you through the assets that qualify as exempt property in your state and give you sound advice on what to list as your exempt property.
Improves Your Credit Score
You get a clean slate once your bankruptcy discharge is granted. Studies show that a majority of people have a higher credit score a year after filing for bankruptcy. You get a chance to rebuild your credit in several ways and further increase your score after filing. A secured credit card is much easier to get since the lender takes doesn’t take any risk. Once your bankruptcy discharge is granted, it would be advisable to get a secured credit card.
Remember to consult a bankruptcy lawyer so as to get guidance on the right steps to take to improve your credit score after filing for bankruptcy.
Facilitates Freedom From Certain Debts
Many kinds of debts are wiped out by Chapter 7 bankruptcy. Medical bills, personal loans, past-due rent, and business rents are some of the debts that are cleared. However, recent tax debt and child support cannot be covered by chapter seven bankruptcy. In most cases, student loans also cannot be cleared. However, this can still provide an immense amount of relief for those who are drowning in debt.
Prevents Creditors From Garnishing Your Wages
If you can’t afford to lose more than half of your paycheck to creditors, perhaps you should consider filing for bankruptcy. The minute you file for bankruptcy, an automatic stay is effective. As such, your creditors are required by the law to stop all attempts of contacting you and seizing your assets.
As some bankruptcy lawyers will tell you, clients often wait up to three years before filing for bankruptcy. During those years, they endure constant calls and emails from creditors who want to seize their assets. Why wait this long when you can file for bankruptcy and work towards regaining your financial stability? The sooner you contact a bankruptcy lawyer, the faster you will get back on your feet.
Filing for bankruptcy is a huge step financially and can go a long way in getting you back on track. Proper research before taking any action is key. Consider your options keenly. Contact us today if you are looking for bankruptcy attorneys in Knoxville, Tennessee.