How Bankruptcy Provides Debt Relief During COVID-19

Many people might know that bankruptcy can help with debt problems. However, do you know exactly how bankruptcy can help with your debt and how soon? If you are facing a stack of unpaid bills, it’s easy to feel like there is no solution. However, you shouldn’t hesitate to discuss how bankruptcy can help with an experienced Michigan bankruptcy lawyer.

Our Office is Here for You During the COVID-19 Crisis

While it may feel like your life has been put on hold due to the COVID-19 crisis, always remember there is still legal help if you need it. The office of lawyer Karen Evangelista is open and helping people just like you every day. The court is open to file bankruptcy cases.

Immediate Relief from the “Automatic Stay”

While the Chapter 7 bankruptcy process takes about four to six months in most cases (and Chapter 13 takes longer), you don’t have to wait that long to get rid of some of your financial concerns. When you owe debts, much of the stress comes from constant collection efforts or the possibility that your creditors could file a lawsuit against you. When you file for bankruptcy, a court order begins right away, which is called the “automatic stay” and orders all collection efforts to stop.

The automatic stay can put a stop to the following and more:

• Calls and letters from your creditors
• Collection lawsuits filed by creditors
• Creditors going after your wages or bank accounts
• Foreclosure cases for your home
• Repossession of a vehicle
• Evictions
• Threatened utility shut-offs

All of this can give you immediate stress-relief knowing that you will not face legal action or collection efforts – generally, for the entire length of your bankruptcy case. In some cases, mortgage lenders or similar creditors might ask the court to lift the automatic stay for one specific debt, but this doesn’t happen in every case, and your lawyer can address the situation if it does happen. 

Discharge of Your Debts

The end of a successful bankruptcy case involves the “discharge” of many debts. When the court orders a debt to be discharged, it means that you are no longer required to pay the debt, and the creditor should no longer try to collect payment from you for that debt. 

Not every debt is discharged in bankruptcy, but those that generally qualify include the following:

• Credit card balances
• Medical bills
• Past due rent
• Past due utilities
• Personal bank loans 
• Personal loans from friends or family members
• Legal judgments against you (except in rare cases)
• Collection accounts
• Some tax debts

Bankruptcy will not discharge unpaid child support, criminal fines or costs, secured debts like mortgages or car loans, or most student loans. However, once all of your unsecured debts are gone, and you no longer have those payments, it often frees up enough money to stay on top of your leftover debts. 

Contact a Rochester, MI Bankruptcy Attorney to Learn More Today

If you need debt relief help and would like to learn more about whether bankruptcy could be right for you, talk to Michigan bankruptcy lawyer Karen E. Evangelista, PC. Contact us for a free consultation today.