Reasons to Consider Bankruptcy During the 2020 Holiday Season
Even in a year as trying as 2020, many people still look forward to the holidays to connect with family and friends, dine on excellent food, and celebrate the season’s traditions. However, it can be challenging to enjoy the festivities when you are bogged down by debt, being harassed by creditors, and wondering about your financial future. If you contemplated bankruptcy in recent months and read up on the implications, you may have dismissed the idea. There are certainly consequences to filing for bankruptcy, and you might not want to go through the process around the holidays.
Instead of focusing on the negatives, continuing to struggle with debt, and ignoring creditor phone calls until January, it might be time to switch gears on your perception of bankruptcy: There are many positives and, when you can envision a brighter future, you may not want to put things off. Your Virginia bankruptcy lawyer can advise you on the specifics, but take a look at some benefits of filing for bankruptcy around the holidays.
1. No more crushing debt. The first pro of bankruptcy is the primary reason most debtors file: To get out from under the economic burdens and unfavorable financial status that accompany overwhelming debt. There are two potential options for most debtors under the US Bankruptcy Code:
- Chapter 7 bankruptcy, which discharges your debt after liquidation of eligible assets; and,
- Chapter 13 repayment, where you restructure and reorganize your debts in order to pay them back over a period of years.
2. Preparation steps will put your financial condition into perspective. After an onslaught of communications and demands from creditors, some debtors withdraw to the point that they do not know how bad their financial situation has gotten. One of the biggest surprises for many is how much of the outstanding debt goes towards interest and late fees,
Making the decision to file for bankruptcy forces you to face your circumstances because you will need to gather numerous documents as part of your petition. When you see the numbers, you could soon realize that your debt is insurmountable.
3. Eliminate creditor harassment. One of the first things that happens after you file for bankruptcy is that there is an automatic stay, i.e., an injunction that prevents most contact and collection efforts by creditors. Your holidays will be free of harassing calls, wage garnishments, liens, and other measures used by creditors and the collection agencies they hire.
4. Required counseling teaches responsible spending. As part of the bankruptcy process, you must participate in separate financial-based counseling programs:
- Before filing, you need to attend a credit counseling consultation to determine whether you can handle debt through options other than bankruptcy; and,
- After you file and before your case can be concluded, you must participate in pre-discharge debtor education that focuses on budgeting and managing money.
By completing these required programs, you will learn useful skills about responsible spending. These are benefits that you can use well after the holidays and long-term into your future.
Discuss Additional Benefits with a Virginia Bankruptcy Attorney
Understanding the advantages of filing for bankruptcy should reduce some of the anxiety about going through the process around the holidays, but it is still essential to retain experienced legal counsel for assistance. For more information on the pros and cons, please contact the Law Office of Steven D. Barnette, P.C. We can schedule a consultation to meet with you at our offices in Gloucester, Hampton, or Newport News, VA. Our team represents clients throughout the Tidewater and Middle Peninsula area in all types of bankruptcy, so we are prepared to guide you through the proceedings.