Bankruptcy is something that is often extremely misunderstood. However, when you are going through a rough financial situation, such as wage garnishment, foreclosure, or divorce, then bankruptcy may be the smartest way back to the path of financial freedom. Here are the top 5 ways in which filing for Chapter 7 bankruptcy in Tacoma offers you that financial freedom.
Freedom from Credit Card Debt
Chapter 7 bankruptcy will wipe out your unsecured debt, which includes your credit card debt. When you have credit card debt, it is often difficult to know whether bankruptcy is the best decision or if it is feasible for you to pay off your debt yourself. As a rule of thumb, if you do not see yourself being able to pay off your credit card debt completely within the next 5 years, debt may be a good choice.
Freedom from Divorce Stress
Statistics suggest that between 1990 and 2008, 90% of all bankruptcy filers who had experienced divorce had also experienced job loss or incurred significant medical expenses during their divorce. It is easy to see therefore why divorce is such a common trigger for bankruptcy. The financial hardship that most people experience as a result of divorce only adds to the emotional trial of divorce. Bankruptcy is a good way to eliminate one stressor and lighten the load of stress that you are carrying.
Freedom from Foreclosure
Both Chapter 7 and Chapter 13 bankruptcy will stay a foreclosure from happening. Under Chapter 13 bankruptcy, the late payments or arrearages that you owe on your house will be put back into a reorganized bankruptcy payment for you to pay back over time. Under Chapter 7 bankruptcy, the bankruptcy will prohibit any collection efforts from occurring for 30 days, but during this time, you will need to make up the payments or sell the house, usually through a short sale.
If you are able to catch up the payments on your house and then make them in full every month going forward, Chapter 7 bankruptcy is an effective way to buy yourself some more time after you receive a foreclosure notice to make up the debt.
Freedom from Ignorance
As you go through the process of bankruptcy, you will be required to go through a credit counseling course that helps you identify where your money is going, what your current debts are, and provides counseling for avoiding similar mistakes in the future. Even if you do not go through the entire process of filing and eventually discharging a bankruptcy, you will have at least gained valuable education for how to approach your finances and debts in the future.
Freedom from Wage Garnishments
Wage garnishments can be very embarrassing and may even put your job in jeopardy. Because Chapter 7 bankruptcy filing automatically puts an end to all collection efforts, filing for bankruptcy can stop wage garnishments. If you owe a significant amount of debt or have an account in collections, the collection agency or the person or company you owe money to may send a notice that they are going to start garnishing your wages, which means that the Court grants the company permission to deduct money from your wages to pay your debt. As soon as you get this notice, you may want to consult with a bankruptcy attorney who can help you get your bankruptcy filed as soon as possible, hopefully in time to stop the wage garnishment.
Filing for a Chapter 7 bankruptcy in Tacoma can offer a fresh start and freedom from many things that would otherwise have a significant negative effect on your life. To experience true financial freedom, contact a bankruptcy lawyer to hear about some of your options.
Travis A. Gagnier, Attorney at Law committed to providing compassionate support to our clients going through financial difficulties for more than 21 years. Visit our page on to see our page today!