Bankruptcy is a financial decision that helps people erase debts they are not able to pay back. While deciding to file for bankruptcy is a difficult decision, it may be the best decision for you, your family, and your future learn how bankruptcy will affect your life.
Before you file for bankruptcy it is important to know how filing with affect you and your family.
Bankruptcy and Your Debts
Bankruptcy has the power to erase certain debts, including credit card and medical debts. After bankruptcy, you will not be legally obligated to pay back the dischargeable debts that are erased by your Bankruptcy Discharge Order.
This means that you will get to move forward with a fresh financial start. Without monthly debt payments, you will have more money available for family necessities and be able to save more for emergency savings and retirement.
Bankruptcy and Your Belongings
Most people who file for bankruptcy get to keep most or all of their belongings.
Bankruptcy law provides for you to keep property, assets, and other belongings valued up to a certain dollar amount through exemptions. Property that is protected in bankruptcy is known as “exempt property.” You get to keep exempt property if its value does not exceed a certain dollar amount. Georgia law allows for exemption amounts for your house, automobile(s), household goods, retirement accounts, and many other belongings.
Bankruptcy and Your Credit Score
In the short term filing for bankruptcy will decrease your credit score. However, it is a myth that bankruptcy “ruins” your credit for years. Many of our clients are surprised to find out how quickly their credit begins to recover after bankruptcy.
Consider that many people who file for bankruptcy have fallen behind on payments, have charged off accounts, maxed out credit cards, and lawsuits for unpaid debts, all of which factor into your credit score. Often by the time someone files for bankruptcy their credit score has already decreased due to these factors.
After bankruptcy you no longer owe any dischargeable debt making your debt-to-income ratio more favorable, which makes you a more desirable candidate to loan money to.
Bankruptcy and Your Privacy
Many of our clients are relieved to learn that, in general, unless you tell someone about your bankruptcy they are unlikely to find out about it. Bankruptcy filings are public records, but someone would have to know where and how to run a search to discover your case.
One caveat to this is that if your wages are being garnished, then your employer will be notified of your filing (so that the wage garnishment will stop!). Also, if you have a job that requires a security clearance or you apply for a job that requires a financial background check, your bankruptcy may be discovered.
Bankruptcy and Debt Collection
As soon as you file for bankruptcy all collection activity against you must stop. The phone calls, bills, wage garnishments, bank levies, and lawsuits will stop. Learn more in our article The Power of the Automatic Stay and How It Helps You.
Bankruptcy and Your Quality of Life
When you are free from the constant stress of being in debt, there is a very good chance your quality of life will be much better. You will be free from incessant collection calls, free from a mailbox stuffed with overdue notices. You and your family will be free to make the most of the financial fresh start you all deserve.
Bankruptcy and the Benefits of Filing
You deserve a financial fresh start, and we’re here to help you achieve it. We’re here to help you take an honest look at bankruptcy. It is our mission to ensure that you understand the power and benefits of bankruptcy and how filing will affect you and your family.
For over 35-years we have proudly served the people in Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Springfield, Pembroke, Brooklet, Garden City, and Ludowici, Georgia.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code. Find out more about Bankruptcy in our guide: All About Bankruptcy.