When should you consider filing for bankruptcy?

| Apr 19, 2021 | chapter 13 | 0 comments

Unfortunately, bankruptcy has suffered constant stigmatization in our society over time. Because of this, many people feel reluctant to file even if it would be their best possible option.

You may be one of these people. The best thing you can do is arm yourself with plentiful knowledge so you can combat these fears and make the right decision for your unique situation.

Rapid recovery rates

NerdWallet examines the scenarios in which filing for bankruptcy might rank as the best option. The first thing they do is dispel the myth that bankruptcy will put a huge dent in your credit score or even cause it to fall to unrecoverable lows. Experts point out that by the time you file, your credit score is likely already suffering due to the debts you struggle under. On top of that, credit scores often rise up again within a year of filing, especially after the discharge of your debts. This is a decently rapid recovery rate.

What can bankruptcy help with?

But your credit score is just one potential piece of the puzzle. Bankruptcy can also help end wage garnishment, lawsuits, and halt collection efforts from debt collectors. If you are suffering from debt collector harassment, this alone is often invaluable.

Bankruptcy also helps you wipe out most types of consumer debt. This includes past-due rent, civil judgments, medical bills, credit card debt and more. If you have a lot of consumer debt, wiping the slate clean can open up your budget to pay off the debts that still stick around.

In the end, it is up to your discretion to decide if you want to file or not. But know that it will not necessarily have the huge and heavy repercussions that you heard in the past.