You could ask just about anyone in the United States if they know what bankruptcy is and they will have an answer for you. Where the discrepancies lie is what is reality and what is rumor. In the past, filing bankruptcy carried a stigma of quitting or giving up. Many people thought individuals who would file for bankruptcy had no moral fiber, because they were walking out on their debts. The truth is, no one really wants to file bankruptcy. For most Americans, it was and still is a last resort. Some wait too long to file ending up in their own demise. What most people don't understand are the real benefits of a bankruptcy filing.
When someone becomes buried under a mountain of debt, they will do everything they can to kick the can down the road and shuffle their bills around. It starts out by robbing Peter to pay Paul and until there is nothing else left to rob from Peter, Paul gets nothing and ends up getting mad. It would be better off for these folks to avoid borrowing or selling personal belongings to make ends meet, because in the end filing bankruptcy will probably be in their future anyways.
Bankruptcy was created to give good hard working Americans a second chance and a fresh start. It was not created to gather up every ounce of property and throw the individual out on the street to beg. That's why Congress enacted bankruptcy exemption laws to allow Americans to protect some of their personal property and allow them to truly have a fresh start.
When an individual comes to the place where they decide that filing bankruptcy is their way out of debt, they are surprised to learn of all the benefits from their bankruptcy attorney. The first thing they will find out about Chapter 7 bankruptcy is the power of the automatic stay. Immediately, after filing for bankruptcy petition and automatic stay is put in place stopping all legal proceedings against the debtor. Not only does it stop the creditor from calling constantly to collect on a debt, it will also stop foreclosure, repossessions, wage garnishments and lawsuits. This in itself is a good reason to file for bankruptcy because creditors are becoming more and more brazen with their collection tactics. There are laws to protect consumers from creditors, but most people don't even know they exist. Creditors have been known to lie, threaten any even harass someone at their job. All of this is illegal but it doesn't stop them. The automatic stay will stop this and of the creditor decides to disobey the stay, the individual should call their bankruptcy attorney and file a motion with the bankruptcy court for sanctions against this creditor. If the behavior continues, the individual could even be awarded damages. Most of the time, a letter from the bankruptcy attorney will stop it immediately.
Since the real estate market imploded back in 2007, many Americans have been facing foreclosure and looking for a way to save their family home. Filing Chapter 7 bankruptcy will stop foreclosure, but in most cases only temporarily. In some situations, for someone that has a large amount of unsecured debt like credit cards, filing Chapter 7 bankruptcy will allow them to wipe out all the unsecured debt and possibly free up enough cash to be able to afford the house payment after all. The bottom line is filing bankruptcy might have something for just about everyone buried in debt, but you won't know until you consult a bankruptcy attorney.
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