Why Bankruptcy Shouldn't Have A Bad Name
Posted on: 23 November 2021
The bankruptcy process often gets an unfairly bad reputation. If you're thinking about meeting with bankruptcy lawyers, it's a good idea to set aside some of these negative notions and focus on the positives. A bankruptcy attorney can help you try to achieve these three goals.
Restoring Your Financial Life
One of the strongest negative ideas about bankruptcy is that it means the end of someone's financial life. No idea could be further from the truth. A bankruptcy lawyer can help you get your financial world back in order.
While you'll likely see an initial hit on your credit record, the long-term effect should be positive, as long as you take advantage of the process. Bankruptcy will help you to either restructure or discharge many of your outstanding debts. With those off your credit record, you should be able to rebuild your score rather than watching it continue to plummet.
Stopping Collection Actions
When a bankruptcy attorney helps a client file a case, one of the first things they do is request a stay. This is a judge's order to your creditors stating they must halt all communications about your debts while the case moves forward. As long as you name a creditor in the case, they will almost certainly be subject to the stay.
Notably, some people use the stay to buy a little time if they're facing foreclosure. If they can restructure their debts, they may even be able to keep their houses. Even if they have to liquidate their assets and allow the creditors to foreclose, the stay will still buy them a few weeks to try to find other living arrangements.
Also, once a court discharges a debt, that's the end of all collection actions attached to it. The debt is considered retired for all legal purposes, so the creditor can't pursue it anymore.
Applying a Financial Tool
The smart thing is to view bankruptcy as one more financial tool. In that sense, it's not much different than bank accounts, loans, stocks, bonds, or any other financial instruments. Many businesses that had those sorts of assets have used bankruptcy to stabilize their situations.
Critically, you want to think about bankruptcy as a bridge. A bankruptcy attorney is a person who'll help you find and cross that bridge. On the other side, you'll find a more stable financial life now that your biggest debts are retired. Reach out to a bankruptcy attorney near you to learn more.
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