Bankruptcy "Breather"

            The word bankruptcy tends to have a negative connotation, but this is due to a misunderstanding of the word and what it means to file bankruptcy.  Many people understand bankruptcy to mean that the person filing has lost all of their money.  This confusion can lead to either fear for the person filing or not understanding that you’re eligible to file (because you still have money and/or a steady income source).

The truth about bankruptcy is that it’s a process which allows a person to “take a breather”.  In other words, if a person is overwhelmed with debt and unable to remain current with their payments, filing for bankruptcy will give them a break from creditor harassment, so they can catch up on payments and re-organize their finances.  This process is called the Automatic Stay and it’s something most people don’t understand about bankruptcy.  When a person files for bankruptcy, an Automatic Stay is immediately put in place by the courts.  The Automatic Stay prohibits creditors from taking further action outside the bankruptcy to collect monies that are owed to them from the debtor.  Therefore, the creditors must leave the debtors alone while they reorganize their finances with a trustee, the court, and their bankruptcy lawyer.

               In the end, though bankruptcy can seem like a scary situation, the process of filing is meant to help people through financial hardship and help them to remain out of debt and on top of their finances in the future. For more information about how bankruptcy could benefit you, contact your local Bankruptcy Attorney.