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Making the decision to declare bankruptcy is not to be taken lightly. There are many different factors to consider, from how you will handle the prospective loss of your home or car to choosing a path for reorganizing your debt. However, there are a few positive aspects of this process, and one of the most useful can be how bankruptcy changes your relationship with creditors. If you decide to make this choice, there are a few facts you might want to know about how it can assist with any current creditor issues.
- It Can Stop Creditor Calls and Letters
If you spend most of your day ducking phone calls from creditors and letting collection letters pile up, declaring bankruptcy may put a stop to this harassment. Once you file and order known as an automatic stay is put into place and lets your creditors know that they can no longer seek to collect money from you or file suit against you. This can give you a bit of breathing space as you attempt to reorganize your debt.
- You May Be Able To Keep Financed Property
If your creditors include a mortgage company or a bank that holds the lien on your vehicle, filing for Chapter 13 may help you settle debts that are long past due and help you keep your financed property. Under Chapter 13 bankruptcy, your debt is reorganized and you agree to a payment plan that helps you catch up with your payments. Depending on your current income, the repayment plan may extend up to five years.
- Proper Representation
Hiring a bankruptcy lawyer can place a knowledgeable buffer between you and your creditors and allow him or her to represent your best interests during the bankruptcy proceedings. Any communication from creditors can be rerouted to the lawyer, who can work to improve your relationship with them and inform them that you are doing everything you can to reorganize your debt via bankruptcy.
- A Better Understanding of Creditor Intent
Avoiding your creditors and being fearful of their intentions can be a common occurrence when you struggle with debt. However, when you declare bankruptcy, communication with your creditors may improve and you might be able to better understand what they require from you. You may be surprised to realize that some creditors are willing to work with you under the umbrella of bankruptcy and may not demand as large a payment as you feared.
Declaring bankruptcy can help you settle a variety of debts and give you the confidence to face your creditors, no matter what type of debt reorganization you choose. Contact a bankruptcy lawyer in Melbourne, FL today for more information and to make an appointment for an initial consultation.
Thanks to The Law Offices of Arcadier, Biggie & Wood for their insight into bankruptcy and how it can help with creditor problems.