When you are drowning in debt, there are a lot of issues that can plague your mind. You might wonder how you are going to make ends meet. You might be tired because creditors keep calling you or sending you collection notices in the mail. One option that you have to regain your peace of mind is to file for bankruptcy. There are multiple options that you can consider. Before you come to the point of thinking about the type of bankruptcy you want to file, you should think about how these five points will impact your life.
#1: Automatic stay
Once you file for bankruptcy, the court issues an automatic stay. This prevents creditors from trying to collect the debt. This means that you can answer the phone and check the mail without worrying about how you are going to answer the creditor's demands.
#2: Learn how to budget
As part of the bankruptcy process, you will go through credit counseling. You will learn how to budget your money based on what you earn. This is important because it sets you up for financial success after you file for bankruptcy. Just make sure you continue to use the lessons you learned.
#3: Control over your finances
You will have more control over your finances. Once your bankruptcy is discharged, you won't have to worry about making those payments that were suffocating you before. Instead, you can focus on keeping your finances intact and enjoying your life. You should make sure that you don't fall back into the debt trap so that you can continue to enjoy the financial freedom you enjoy now.
#4: Co-signers are affected
If you have any debt that involves a co-signer, you should understand that those co-signers aren't relieved from the responsibility to pay. They will still have to pay the bill even if the debt was discharged for you. This can put some people into a difficult situation, but you might be able to work something out with the co-signers to take care of the debt.
#5: Personal life intrusions
You will have to go through all of your personal finances when you file for bankruptcy. This can be rather difficult because many people don't want to go through the intrusions that come with this. It is pretty safe to say that the court has probably heard stories equal to or worse than what you have to say. You shouldn't let a short time of discomfort stop you from getting the financial relief you need.
Source: Nov. 30, -0001