How Bankruptcy Can Benefit You

According to the United States Bankruptcy Code, consumers have the right to file a bankruptcy petition and obtain relief from their financial obligations to get a fresh start, debt-free. Most consumers will file for Chapter 7, which liquidates non-exempt assets then discharges debt, or Chapter 13, which helps the debtor create a manageable repayment plan.  No matter what type of bankruptcy the petitioner chooses, he or she can obtain relief in the following ways:

1. End to Creditor Harassment

One of the most difficult parts of day-to-day life as a debtor is the constant reminder of debt in the form of harassing phone calls or letters from creditors. As soon as a bankruptcy is filed, an automatic stay is imposed that stops all activity against the debtor and his/her property. The stay stops just about everything, including collection notices, phone calls, utility disconnection and active wage garnishments.

2. Protection of Property

The bankruptcy stay will also stop any collection activity taken against a petitioner’s property, such as vehicle repossession and foreclosure. If your car has already been repossessed, you may be able to file Chapter 13 and get the vehicle back.  Chapter 13 will also help you repay your vehicle loan under terms that are easier for you.  For example, under Chapter 13 you can reduce the interest rate on the loan and, in some cases, you can force the creditor to only accept an amount equal to what the car is worth.  Chapter 13 also stops home foreclosure and gives you time to get current on mortgage loans.

3. Elimination of Debt

Bankruptcy can be effective at eliminating debt, especially unsecured debt. Unsecured debt refers to obligations not backed by a specific asset. Some common examples of unsecured debts that are dischargeable in bankruptcy include:

• credit card payments
• medical bills
• rent 
• utility payments

Remember, certain debts, such as recent tax debts and most student loans are not dischargeable in bankruptcy.

Secured debts are debts that are secured by some sort of collateral.  They can be eliminated in bankruptcy. However, if you chose to discharge (eliminate) those debts, you typically will be forced to return the collateral that secures the loan.  For this reason, most Debtors who file Chapter 7 often chose to continue to pay their mortgage loans and car loan payments. 

Contact Our Milwaukee Bankruptcy Firm For Help

At Sapinski Law Office S.C., we understand the stress and uncertainty that accompany mounting debt obligations. It is our mission to help our clients find the best bankruptcy or non-bankruptcy debt relief option to suit their financial needs. If you would like to schedule a free consultation with a Attorney Sapinski, give us a call at (888) 782-9423. Our bankruptcy firm has multiple locations throughout the Milwaukee metro area.