Bankruptcy can be a sensitive topic. While few people want to file for bankruptcy, many could significantly benefit from doing so. If you’re considering bankruptcy and want to understand the process better, contact Law Offices of Terrence Fantauzzi at (909) 552-1238 for a free consultation. In the meantime, here are five compelling reasons why bankruptcy can be an effective solution.
It Stops All Collections
Anyone who has fallen behind on debt knows the relentless calls from creditors. These calls can be humiliating, aggravating, and even frightening. When you file for bankruptcy, creditors are legally required to stop all collection attempts and communicate only through your attorney. This includes all creditors, even the Internal Revenue Service (IRS).
Consequences for Ignoring Collection Laws
Some might worry that creditors will ignore the law and continue to call. However, if creditors violate the automatic stay that comes with a bankruptcy filing, they face significant fines. Your bankruptcy attorney can report these violations to a federal judge, who will enforce the law and impose penalties on the offending creditors. This ensures that the harassment stops, providing you with immediate relief.
Limited Future Payments to Creditors
Filing for bankruptcy limits any future payments to creditors to the current value of your assets, after accounting for exemptions like your home or vehicle. This often results in a significantly lower financial burden compared to continuing to pay off debts over many years or even decades. Bankruptcy can thus be a more manageable and less costly way to address overwhelming debt.
Permanent Debt Relief
Once your bankruptcy is discharged, the debt is permanently erased. Unlike other options that may leave you paying for years, bankruptcy provides a true and lasting solution. If you choose to stop paying your creditors without filing for bankruptcy, the debt will remain your responsibility for at least seven years, continually affecting your financial stability. Bankruptcy offers a clean slate and a fresh start.
No Tax Consequences
When a creditor forgives your debt, the forgiven amount is often considered taxable income, potentially resulting in a significant tax bill. Bankruptcy, on the other hand, discharges the debt without such tax consequences. This means you won’t face unexpected and potentially crippling tax liabilities from discharged debts. You can focus on rebuilding your financial health without worrying about the IRS coming after you.
Call Today for a Free Bankruptcy Consultation
If you’re considering bankruptcy, Law Offices of Terrence Fantauzzi is here to help. Contact us at (909) 552-1238 for a free consultation to discuss your financial situation, your goals, and any concerns you may have. Our experienced attorneys can guide you through the process, ensuring you understand your options and helping you make the best decision for your future. Call us now to find out how we can assist you in achieving financial stability.