Is your mailbox full of collection letters? When the phone rings, is it a collector calling? Are you losing sleep because of debt-stress? If the answer is yes, then bankruptcy may be an option for you. Many people fear a bankruptcy will ruin credit and their financial future. Reality is – bankruptcy is probably the best thing an indebted person can do.
If your debt is in collections, your credit score is already affected. Filing a bankruptcy will not make it worse. Instead, a discharge provides you with the opportunity to reestablish and rebuild. Sometimes the only thing you can say is, “I can’t pay you.”
It’s easy to fall into a cycle where you pay the minimum payment; use the credit card because income went to the minimum and the balance stays the same. If you opt to stop paying the minimums, the balance can quickly double with interest and late fees. You get trapped in a credit nightmare.
Filing a Chapter 7 or Chapter 13 bankruptcy will stop the collections. You can start over and rebuild. If your financial goal is to purchase a house, a new vehicle or simple refinance, you can save money by eliminating the debt for a down payment.