Why you should file for bankruptcy?

When a creditor contacts a third-party debt collector for international recoveries or national ones, it is because the customer has missed all the payment deadlines. If you are one such debtor who has not paid the bills on time, and now you are getting calls from the collector, getting anxious is given. Especially, because you don’t know how to pay the bills and maybe due to other reasons, you are now broke. Then what is the next step?

Well, filing for bankruptcy is certainly an option and not a bad one at that. It is because bankruptcy can stop the lawsuits, collection calls, and even the wage garnishment. It increases your credit score and erases your debt.

Why bankruptcy?

Now, the question is why you should file for bankruptcy. To answer this, first you should know that when you do this, an official person will verify all the facts, so, don’t lie about going bankrupt just to get out of paying the debt. Now, why? 

It is the only option

A lot of people have already used all their money or savings to either pay for multiple debts or on other things and paying the debt is difficult for them and bankruptcy can help them make a fresh start. 

It improves your credit score

Also, if you think it won’t affect your credit score, think again. By the time a person files for bankruptcy, their credit is already in pretty bad shape. So, when they do file for bankruptcy, most of the time their credit score rises, which is a good thing.

It ends the collection cycle

When a debtor has not made any payments beyond 120 days, their financial troubles can get worse. They have a collection in their credit report, which can create problems; they may get court summons or lawsuits.

When you file for bankruptcy, the underlying debt disappears, and the lawsuits and wage garnishments against you disappears too.

Gives you access to credit

It can be difficult to ask for credit right after you file for bankruptcy. But after 18 months or getting a new line of credit is far easier than if you had not filed for it, and were struggling to pay off the debt.

Things to know when filing for bankruptcy

If you can pay your bills, do that because having debt is never a good option. But if you are filing for bankruptcy, make sure you cover these points:

Hire a lawyer

Without proper documentation, your case can get dismissed, and you will end up worse than before. So, hire a bankruptcy attorney, some will want to you pay in advance while some will do it pro-bono. 

Raise the cash

Reduce your expenses, sell things that you don’t want or borrow money from family and friends. Don’t open new credit lines, as it can create problems. The best thing to do is to sit with your attorney and talk about your options.

Bankruptcy is not the end of the world. It can open up new opportunities to make credit and start a new chapter.