In reality, bankruptcy is a form of consumer protection law that permits the elimination or reduction of certain debts. While it is true that a bankruptcy can negatively impact a person's credit score, it is important to keep in mind that credit scores are fluid and can always be rectified, though typically not until the debtor has the opportunity to begin the process.
When a person applies for bankruptcy, an automatic freeze is placed on their debts. Lenders and creditors are prohibited from contacting the debtor for any reason related to the debt, and more importantly, they are prohibited from requesting debt repayment. Eventually, the individual may be released from the obligation to repay the debt, or they may be able to restructure and reconsolidate their debt at a reduced amount.
Numerous individuals have successfully filed for bankruptcy on their own, but it is almost always in the debtor's best interest to retain the services of specially trained bankruptcy attorneys. A lawyer is able to provide information in a non-threatening and simple manner. Additionally, bankruptcy attorneys function as a kind of assistant throughout the entire process, explaining the steps along the way and completing related tasks on behalf of the debtor. This frees the debtor to concentrate on making changes to improve their situation, rather than making journeys to the courthouse for forms and reference materials.
In some cases, bankruptcy attorneys may advise their clients against filing for bankruptcy, particularly if they are better off than they would like to believe. Attorneys can advise their clients on bankruptcy information and keep them abreast of any legal changes that could affect their decisions.
Even though having multiple debts may seem burdensome to the average person, they are usually manageable if the debtor is given a little extra time to devise a strategy to reduce the debt. With creditors and lenders threatening wage garnishment or litigation, however, it can be difficult to formulate a plan. Filing for bankruptcy will give the consumer sufficient time to devise a strategy to address the entire debt, not just the monthly minimum payments. Once the collectors are ordered to cease collection efforts, the person who is being driven further and further into a corner by collection agents may feel a weight lifted off their shoulders.
The decision to file for bankruptcy can be confusing and frightening, but the decision not to file can have far more negative consequences for the debtor than confusion and dread. If legal fees are preventing a person from hiring a lawyer to assist them through this process, they should remember that bankruptcy attorneys routinely represent clients in the same situation. Bankruptcy-specialized law firms can explain to prospective clients their payment options for hiring a bankruptcy attorney. The most important aspect of the overall bankruptcy procedure is the availability of options.""
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