Is worry over bills and debts keeping you up at night? It doesn't have to be that way.
Recently, bankruptcy filings have fallen from normal levels. The news is puzzling to some degree, as recessions and job loss usually spur an increase in bankruptcy filings, not an ebb.
But, as collection actions were halted by restrictions due to COVID, many folks needing debt relief gave a sigh of relief as it gave them breathing room. But, with a few exceptions, it really only delays the collections. As state courts open up and forbearance agreements expire, banks, landlords, and debt collectors have been and still start collection actions again.
Now is the time to consider if bankruptcy is the solution for you. For many folks, even if unopened bills stamped “past due” are piling up, even if you haven’t paid the rent or mortgage or are struggling to come up with payments, the specter of bankruptcy looms like a frightening ghost. Worry over bills, debts, and bankruptcy keeps you up at night.
You may worry that bankruptcy will mean the loss of your home to pay the bank or your debts. You may worry that bankrupt individuals have to give up their car, or tools you need to earn a livelihood. You may fear everything you owe being liquidated to satisfy creditors.
Another set of fears involves the public knowledge of bankruptcy. Are you worried that your friends, family, and neighbors will find out?
And then there’s your credit rating and good credit standing. You want to keep a good credit rating and don’t want the perceived black mark of bankruptcy on your record.
In the meantime, you’re desperate and scrambling to pay your bills. Worse, you may be tapping savings accounts or your retirement funds, like 401(k)s or individual retirement accounts, to stay afloat. Long term, you’re hurting your financial situation even more.
In fact, bankruptcy is nothing to fear. Bankruptcy provides for the orderly discharge of your debts. It’s a legal way to manage your situation by facing up to it and getting a fresh start.
Bankruptcy law recognizes that people need a place to live, reliable transportation, and necessary personal property, such as clothing and items needed for their business.
As a result, people filing for bankruptcy are typically allowed to keep most or all of their assets, whether it’s your home, car, or other personal property. Virginia law greatly expanded this past year to allow Virginia homeowners to exempt more equity (value) in their homes and protect those homes. And, different options for different types of bankruptcies usually give you control over that.
Will your family and friends find out? It’s very unlikely, unless you tell them. But remember: If you lost a job or had your hours cut back due to COVID, it’s no fault of yours. The fact is, anyone can fall upon hard economic times. What matters is how you handle hard times when they come.
Bankruptcy is a prudent strategy to help with debts. It can help you build a stable financial future, by avoiding spending every penny to serve your creditors. It can protect assets such a retirement plans and equity in your home!
Bankruptcy isn’t failure, and it’s nothing to fear.
If you have questions or concerns, it’s a smart move to consult with us. If we see other options for your situation, we will let you know. We offer free initial consultation by phone, video or in person (with safety precautions) to discuss your situation. Set you mind at rest. Call us at 540-981-9000 to set your appointment.
Is worry over bills and debts keeping you up at night? It doesn't have to be that way. Recently, bankruptcy filings have fallen from normal levels. The news is puzzling to some degree, as recessions and job loss usually...Click to View Linked Article