If you are facing serious debt, you may have no option but to file bankruptcy. But before you finalize your decision, it is important to understand how it can impact your future. This article provides important information to help you understand what it means to file for bankruptcy. However, it is in your best interest to hire an experienced bankruptcy attorney in Central Valley to look at your specific case and help you make your decision.
Bankruptcy Ends Creditor Harassment & Collection Activities
Bankruptcy can be a valuable solution if you are facing serious debt. One of the key benefits is that it stops most collection actions, including phone calls and lawsuits. Depending on what type of bankruptcy you file, some of you debt (such as credit card balances, medical bills, and personal loans) may be eliminated.
So, if you are frustrated with creditor harassment, filing bankruptcy may be the right option for you. However, you should note that bankruptcy will not stop all creditors and will not wipe out all debt obligations. Your bankruptcy attorney can analyze your case and help you determine which of your debts can be discharged by bankruptcy.
Bankruptcy Can Stop a Foreclosure or Eviction
Bankruptcy’s automatic stay can temporarily stop a foreclosure or eviction. Once you file for bankruptcy, any eviction against you must be paused, even if it is in the litigation process. However, it may not protect you if you already have an eviction judgment. Similarly, bankruptcy can also put a hold on your foreclosure or help you keep your home.
Bankruptcy Can Impact Your Credit Score
While bankruptcy can help in many ways, it can also have some disadvantage – such as impacting your credit score for up to 10 years. Although bankruptcy may be visible to lenders on your credit score, it does not necessarily mean that it will negatively impact your credit score if it is already low from the debt that you have incurred.
The good news is that your credit score can gradually heal by taking certain steps.
Difficult to Get a Credit Card or Loan After Bankruptcy
Although it won’t be totally impossible to get a credit card or loan after filing bankruptcy, lenders will be more cautious and will likely to give you higher interest rates. Taking the right steps with new credit cards and loans will help you rebuilt your credit score.
Call an Experienced Central Valley Bankruptcy Attorney
If you have been impacted by the COVID-19 pandemic and are planning to file or in the midst of a bankruptcy proceeding, it is in your best interest to consult with an experienced bankruptcy attorney to help you learn your legal rights and options, especially with respect to Chapter 7 bankruptcy.
For more information or to schedule a complimentary consultation with Central Valley bankruptcy attorney Gurjit Srai, please call (209) 395-0761 or (559) 449-1447, or complete our online form.