You have been struggling with your finances for a while as a result of losing a job and depleting your savings. You want to get back on track, but even with your new job, you don’t earn as much as you used to. You’ve seen ads for bankruptcy support as well as consolidation loans and other options. You’re not sure what to do.
You might be worried about using bankruptcy, but it’s actually a good choice for many people. If you can pay your primary obligations, like your mortgage or rent, cover the cost of food and other essentials but can’t repay your debts, then this is a situation where bankruptcy can be beneficial.
Bankruptcy has its benefits. Some include:
- Stopping calls from collectors
- Preventing or stopping wage garnishment
- Preventing lawsuits
In some cases, bankruptcy can help your credit score by eliminating the debt that you’re unable to make payments on. After your bankruptcy is discharged, your scores could potentially go up. Within a year or two, you’ll see a real difference in your credit, so long as you continue to make your payments on time.
By the time someone files for Chapter 7 bankruptcy, the average credit score is 538.2. Within six months (around the time when most people have bankruptcies discharged) the score rose to an average of 620.3.
Bankruptcy may not be your only option, but if you’re not sure where to start, you should start looking into your legal options. Our website has more information on Chapter 7 bankruptcy, so you can see how it can benefit you if you’re unable to get ahead on your debt.