Almost every client that comes to my office tells me, “I never thought I would be here”. It may sound funny, but I’m actually glad when someone tells me that. First, it tells me that this client did not go out and intentionally incur debt that could not be repaid. Second, it tells me that this client has tried everything to avoid filing a bankruptcy case. Third, it lets me know that this client is taking the filing of a bankruptcy case seriously. When an individual gets to the point in their financial life where they are seeking advise about filing a bankruptcy case, bankruptcy is a very positive option for the following reasons:
- Discharges Most Debts
A bankruptcy discharges credit card debt, most judgments, some IRS debt, pay day loans, deficiencies after car repossessions and home foreclosures, medical bills and many other types of debts. A Chapter 7 bankruptcy will not discharge some taxes, child support or student loans. However, frequently our clients discover that if they discharge all of their debts, except their student loans and taxes, they are better able to pay those non-dischargeable debts.
- Stops Creditor Harassment and Lawsuits
Creditors can be relentless in their collection attempts. They will sue you, call you, call your neighbors and relatives…anything to scare or intimidate you into paying them. Most bill collectors are paid on a commission. If they scare you into paying them, they make money. What a terrible way to make a living!
- Gives you a Fresh Start
Filing a Chapter 7 bankruptcy will discharge you from virtually all of your debt and let you start over again. Of course, bankruptcy will stay on your credit report for many years. However, the clients that come to see me typically have many, many “dings” on their credit report. Filing bankruptcy and discharging those debts actually lets us help them clean up their credit report and give them a fresh start. Most of our clients report that their credit scores actually improve after they have filed a bankruptcy case with our office. We assist our clients by requesting that all of those “dings” on their credit reports be changed to reflect that those “dings” were discharged in their bankruptcy case. Bankruptcy therefore actually helps their credit score and gets them on the road to financial health.