Americans are paying a steep price for credit these days. In 2018, we paid more than $113 billion in interest on credit cards alone, and that amount is expected to increase sharply this year thanks to recent Federal Reserve rate increases. Even if you try to be responsible with your debt, interest rates like these can leave you struggling. Bankruptcy can feel like a lifeline. Strong Law Group offers our clients an opportunity to begin a new life of financial freedom.
Bankruptcy Basics
Many people try to pay their debts for years before turning to the courts to get relief. The goal of bankruptcy is to give people a second chance, making it especially common after a devastating experience, such as a medical crisis, divorce or the loss of a loved one.
As soon as you file for bankruptcy, the court will issue an automatic stay. This ends virtually all creditor actions against you, and the phone calls, letters and collection efforts will stop. You’ll get some breathing room as the case progresses, and your creditors will be unable to file lawsuits, enter liens or continue to contact you. They’ll also be unable to continue with certain other actions, such as wage garnishment and evictions, too.
The bankruptcy process can be lengthy, taking six or more months to complete, but once your debts are discharged, you’ll have a clean slate and a financial fresh start. While the bankruptcy will stay on your credit report for several years after you file, you can begin to rebuild your credit right away.
Types of Bankruptcy
There are two types of bankruptcy for most personal filers: chapter 7 and chapter 13. Chapter 7 is often referred to as a liquidation. Your non-exempt assets will be used to pay off your debts, and any remaining debts are discharged. A chapter 13 bankruptcy is also called reorganization bankruptcy, and this type of bankruptcy allows you to repay your debts over a 3 to 5 year period. If there are debts remaining after this period, they may be eligible for discharge, too.
Seeking Bankruptcy Relief
When you’re struggling with debt, bankruptcy can give you the relief you need. There is no one right answer for every financial situation. At Strong Law Group, our team members can help you decide if bankruptcy is right for you and the best type of bankruptcy for your financial needs. Call our law offices today to learn more or to schedule a free case evaluation with one of our bankruptcy attorneys.