5 Great After-Effects of Wilmington Bankruptcy

Life can be better after bankruptcy

Image by PicJumbo

For those deep in debt looking for a better way, Wilmington bankruptcy might be the answer. There are two types of bankruptcy to consider – Chapter 7 and Chapter 13. Outcomes vary slightly between these and which you can file hinges on your debt, income, assets, costs of living, and family size. No matter which you choose, there are some positive outcomes you’ll enjoy after filing bankruptcy.

#1 Stops creditor lawsuits and garnishments

When you can’t pay your bills, creditors love to threaten to sue. In North Carolina, most creditors can’t garnish your wages. However, they can take you to court, win a judgment, then use that to try and put a lien on your assets like your home, auto, or bank account.

The IRS, NC tax authority, federal student loan servicer, and child support enforcement agency can garnish your wages. Filing bankruptcy can generally stop these actions and give you a chance to work out arrangements for some debts and discharge others.

#2 Debt collection activities cease

Once your lawyer files your Wilmington bankruptcy case, there’s an automatic stay on collections. That means that immediately, all debt collection activity must stop. It includes debt collections by original creditors and by professional debt collectors.

You might get a call after you file from a creditor or collector that doesn’t yet know that you filed. Once you tell them you filed, give them the case number and lawyer information, they should end the call and not contact you again unless your case gets dismissed.

#3 Credit score stops dropping

Right before your file your Wilmington bankruptcy, your credit score is likely at the lowest its ever been. When you can’t pay bills, run late or miss payments, and max out credit scores, your FICO score drops routinely. When you file bankruptcy, the free fall stops.

The Federal Reserve reports that people who file bankruptcy see their credit scores begin to rebound almost immediately. Once the free fall stops, you can start rebuilding within just a few months of your bankruptcy discharge.

#4 Keep your security clearance

For those consumers with security clearances, keeping your financial house in order is a must. If you start paying debts late and go into collections, it can impact your security clearance and career. Overwhelming debt is a red flag in your security clearance review.

Getting free of debt can offer you more career opportunities, particularly if you work in a field where background checks are required or credit checks. Owing debt you cannot afford and a low credit rating can cost you job opportunities and may see you denied for rental property as well.

#5 Less stress and better quality of life

Being stuck with unaffordable debt is not an easy way to live. When you’re living paycheck to paycheck, constantly worried about money, and dodging debt collector calls and letters, it’s stressful and can diminish your quality of life and ability to get a good night’s sleep.

Studies show that debt stress can manifest itself in high blood pressure, lower immune response, and can make you more prone to a host of illnesses. In short, being overwhelmed with debt can ruin your life and shedding that debt can be life-changing.

A better future with bankruptcy

When considering Wilmington bankruptcy, Chapter 7 can help unload many unsecured debts within just a few months from case filing to discharge. If you're delinquent on secured debt or can’t qualify for Chapter 7, you can look to Chapter 13 Wilmington bankruptcy.

With this option, you get on a three to five-year repayment plan that catches up your secured debt and can also reduce unsecured debt. To find out which option is better for you, speak to a reputable North Carolina bankruptcy lawyer.

Read reviews from our clients, then call +1-833-627-0115 to reach the Law Offices of John T. Orcutt. Contact us today to schedule a free Wilmington bankruptcy consultation at one of our locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro or Wilmington.