If you are in way over your head with debt, you are probably ready to contact a bankruptcy lawyer in Pittsburgh to get the process of declaring for bankruptcy started. You might think you know some basic information about filing for bankruptcy based on what you’ve heard. There is a good chance that this was misinformation, though.
Filing for bankruptcy is an extreme measure that should only be undertaken in the direst of financial situations. It is not a band-aid for a short-term problem that can be used over and over again. Too many people make the mistake of filing for bankruptcy when they didn’t need to, damaging the credit score more than they had to in the process.
If you are unfamiliar with bankruptcy and are having money problems, you should contact a lawyer immediately. They will make the process as simple as possible. Before you contact them, here is some basic information about what happens when you file.
Four Things That Happen When You Declare Bankruptcy
1. Creditors Will Stop Calling You – Legally, debt collectors are required to stop calling you when you file for bankruptcy. It will also pause any lawsuits that may have been brought against you through what is called an “automatic stay”.
2. You Still Have to Pay Some Debt – Not all debt is covered under bankruptcy law, meaning you are still responsible for it. The three most common types of debt that aren’t covered are student loans, child support, and alimony.
3. Certain Items Are Protected – Certain things are protected by law, meaning you won’t have to relinquish them when you file. This includes the equity in your home, vehicles, family heirlooms, and other household goods. If you are particularly worried about something, ask your lawyer if it protected before declaring.
4. Your Credit Score Will Plummet – Usually, someone’s credit score will drop at least 200 points when they file for bankruptcy. This gives you the chance to build your credit score back up over time.