Most of us have monthly payments on credit cards, rent, mortgages, student loans or vehicles. When you lose your job, you may be suddenly unable to afford these payments. This is especially true if you cannot access unemployment benefits or lack an emergency savings fund. You could face consequences for defaulting on your debt obligations. Lower credit scores, property seizures and wage garnishments are three possible outcomes of a debt default. Depending on your individual circumstances, you may benefit by filing for bankruptcy after a job loss. Bankruptcy can help with the following:
1. Stopping creditor collection actions.
Bankruptcy’s automatic stay can stop most creditor collection actions. For instance, the automatic stay may stop wage garnishments or property seizures. The automatic stay may stop new lawsuits from being filed against you
2. Discharging certain debts.
You may discharge certain debts after filing for bankruptcy. Bankruptcy could allow you to discharge credit cards, medical bills and other types of debts. By discharging debts, you can start the slate over on your finances.
3. Protecting your assets. In addition to the automatic stay, there are other ways that bankruptcy can protect your most important assets. There are exemptions for certain assets in bankruptcy. You can learn more about exemptions and how they might apply to your bankruptcy case on our website.
Which Bankruptcy Chapter is for Me?
There are different bankruptcy Chapters, each with their own benefits and requirements. The right Chapter for your situation depends on your life and financial circumstances. Some filers will not be eligible to file for Chapter 13 bankruptcy while others will not be eligible for Chapter 7 bankruptcy.
You should speak to a bankruptcy attorney to determine which options are available for your situation. The Kansas City bankruptcy attorneys at The Sader Law Firm can help you make this determination. You can reach us by calling (816) 281-6349 or by using our online case review form.