Many people who would benefit from the protections of an Ohio bankruptcy are actually scared to consider it as an option. They may believe (inaccurately) that they will lose everything they own. They also likely worry about their financial future. Far too many people believe the misinformation that there is no credit after bankruptcy. Wanting to buy a home in the future could stop someone from filing for bankruptcy relief that could actually make that purchase more likely.
For those who struggle with unsecured debts or secured debts with out-of-control payments, bankruptcy relief can be a way to reset. Whether you qualify for Chapter 7 bankruptcy due to lower overall assets and income or need to consider restructuring your debt in a Chapter 13 bankruptcy, the protections offered in bankruptcy could truly help you obtain a fresh financial start.
Your initial filing results in an automatic stay for collections
A lot of people who file for bankruptcy wait until they find themselves in a worst-case scenario. They may get a call that their vehicle will soon end up repossessed or end up served with a summons for a lawsuit from a creditor. Many times, these lawsuits seek a garnishment of your wages. If you're only barely scraping by financially, having a chunk of each paycheck taken to repay a debt could mean failing to meet other obligations, like rent.
Thankfully, as soon as you file for bankruptcy protections, you receive what is known as an automatic stay. Creditors listed on your bankruptcy application must cease and desist collection activity, including pending lawsuits and harassing calls to your home and work. You will have the right to inform any creditor or collection company that contacts you that you have filed. That should put an immediate stop to those collection efforts.
Bankruptcy helps you clean the slate and start fresh
Whether you are able to discharge your unsecured debts under Chapter 7 or find a more reasonable repayment plan under Chapter 13, bankruptcy helps you regain control of your financial situation. You no longer have to worry about out-of-control monthly fees, such as over limit fees and late payment fees. You will have the ability to look over your finances and create a budget that will help you get back on your feet in the future.
While it is true that bankruptcy stays on your credit report for 10 years, any collections accounts or judgments would also be on there for a full seven years. You can often start rebuilding credit with secured credit cards or personal loans within a few months. Provided that you re-establish a solid payment history, you may very well be able to qualify for a mortgage within a few years of your discharge date.