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Bankruptcy can help stop wage garnishment

The rate at which individual people filed for bankruptcy hit an all-time high during the Great Recession. The number continues to decrease, and as of 2016, a little under 800,000 people filed for bankruptcy, according to Bloomberg BNA.

Americans who have accumulated too much debt may be hesitant to file for bankruptcy. However, it can be a useful tool for getting your financial accounts back on track. It is especially worth looking into if you currently have part of your wages garnished. While the exact results will vary on a case-by-case basis, there are many circumstances where a person can end wage garnishment through bankruptcy. 

Why feeling ashamed of your debt could lead to more debt

Many people struggling with a mountain of debt commonly feel emotions such as shame, guilt, unhappiness and sadness. After all, they may be afraid of losing their house, creditors could be hassling them and/or they are having a hard time recognizing how everything happened. It is easy to attribute debt, especially credit card debt, to moral failings.

However, these negative emotions could result in even more debt.

Can filing for Chapter 7 bankruptcy stop foreclosure in Florida?

When you are behind on your mortgage payments, you may feel as if you have limited options. You do not want to lose your home, but neither can you afford to keep it. What, then, can you do?

If you have already considered bankruptcy but dismissed it, consider it again. Filing for Chapter 13 is the best way to retain your house. However, if you do not have enough income to follow a repayment plan, then you may have to go with Chapter 7 if you qualify under the means test. Unfortunately, Chapter 7 cannot terminate a foreclosure, but it does come with the following benefits.

Can you get out of debt quickly?

The "bad" news first--it is unlikely you can get out of debt in a matter of days or weeks. A report published in 2016 pointed out that the average American household carried a debt load of $137,063, and that is a big mountain to surmount quickly. Even if it is only a relatively small chunk of that debt you want to erase, say, your $16,000 credit card debt, you are usually looking at a long-term haul.

On the other hand, if you give it just a few months, you could erase much of that debt, perhaps even all. That is thanks to bankruptcy.

Rebuild your credit after bankruptcy

If you are dealing with an insurmountable amount of debt, you might be considering bankruptcy to give yourself a clean financial slate. But you probably have a lot of questions and worries about bankruptcy, too. After all, it can sound like a scary word. For example, you might be concerned about the effect it will have on your credit score.

Chances are, your credit score is already suffering if you are looking to file for bankruptcy. And while bankruptcy might ding it down a little bit at the start, do not fall for the misconception that filing for bankruptcy will tarnish your credit forever. Here is how you can rebuild your credit after bankruptcy.

Does bankruptcy mean my credit score will go from so-so to worse?

Their credit score is one concern that stops many people in debt from filing for bankruptcy. They theorize that their already so-so credit score, which barely qualifies them for loans and the like, will nosedive. They will not be able to qualify for anything again for many years.

Fortunately, some of these assumptions are incorrect. Here is a realistic look at what can happen to your credit score.

Equifax breach still a risk if you have bad credit

There is plenty of concern over the Equifax breach. If you have not yet looked into how the breach could affect you, then you could be placing your credit and finances in trouble. It is essential to stay on top of what is happening to ensure you do not become a further victim.

The information stolen could allow the thieves to use your identity. They could use current credit cards to make purchases or obtain new credit in your name. If you are not staying vigilant, it could add up to a terrible financial situation for you in the future. If you already have issues with debt, you are not immune. You could still be taken advantage of.

Can hurricane damage affect a bankruptcy case?

Each bankruptcy case is different, so it is impossible to generalize whether hurricane damage to your home, car and/or other assets may affect your case. That said, in many cases, hurricane damage does affect something.

Here is an example. Say that you are in Chapter 13 bankruptcy and had reorganized to keep two properties, one of which you rent out. However, a hurricane has now nearly demolished that rental property, and insurance covers only half of the necessary repairs. Further, because of the bankruptcy, you cannot get a loan to cover what the amount left over. In such a scenario, you may have to return to court to modify your Chapter 13 plan.

I am behind on house payments. Will I lose my home?

Perhaps you had to skip a month or two of mortgage payments due to an emergency. Or maybe you simply did not have enough money for your payment and other bills. Whatever the case, you might be afraid you are about to lose your home and that you could even have to file for bankruptcy

That does not have to be the case. It helps to act as quickly as possible, because the best foreclosure defense is being proactive.

3 signs you have more debt than you can handle

If you have built up too much debt, you might feel suffocated. It can increase your stress, reduce your credit score and put a strain on your finances. But while you might be aware that you have a significant amount of debt, you might not know if you have too much. 

Exactly how much debt is too much? There is no exact number. $15,000 in credit card debt may warrant bankruptcy for some, but others might be able to pay it off. While the exact amount of too much debt might depend on your unique circumstances, there are some universal signs you might be past the point of no return. 

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