On behalf of Debt Advisors, S.C.
Many people feel bankruptcy isn’t for them. They have debts, sure-but they have a job. They have trouble meeting ends meet, sure-but they generally find a way to pay the bills. They watch their credit card debt go up and up, sure, but-well, you get the picture.
Most people do not consider bankruptcy the best option-at first. But for some, the debt elimination offered by Chapter 7 or the structured repayment plans offered by Chapter 13 may be just what they’re looking for, even though they don’t even know they’re looking for it.
Every situation is different, so it’s best to talk with an experienced bankruptcy attorney to learn how bankruptcy could affect you. But here are a few brief points to consider.
- At its most basic, bankruptcy eliminates the legal obligation to pay some or all of your debts (called a discharge of your debts). It also has the added effect of stopping harassment by creditors and debt collectors.
- Bankruptcy can help you to meet your basic needs, by restoring or preventing the termination of utility service, stopping foreclosure on your home or prevent repossession of your car.
- Not all debts can be discharged in bankruptcy. Obligations to pay student loans, mortgages, tax debt and court-ordered payments (such as child support) are still valid during and after bankruptcy. But by discharging other debts through bankruptcy, it may be much easier to make these other payments on time.
- Employers cannot discriminate against you in employment just because you have gone through bankruptcy, according to federal law.
- Although bankruptcy can negatively affect your credit score, it does not mean it will be impossible to get credit again. Because your existing debts have been eliminated and a second discharge of debts under Chapter 7 isn’t possible right away, creditors have greater assurance that they will be paid back. However, you may face higher interest rates and greater down payment requirements.
If you have trouble making ends meet due to high debts, and you feel debt elimination would benefit you greatly, then maybe you are a candidate for bankruptcy. Or perhaps the debt repayment option offered by the State of Wisconsin known as Chapter 128 would be best. (Chapter 128 does not discharge debts, but does offer some of the same protections from creditors, while establishing a structured payment plan.) Whatever your situation, an experienced attorney practicing in bankruptcy law can discuss your resources and needs, and recommend a course of action to bring you greater financial stability.