Consumers in Maryland who have had to rely on their credit cards after job losses or unanticipated medical emergencies may end up with mountains of debt without much hope of being able to pay. Gaining knowledge about bankruptcy protection when other options such as negotiating with creditors fail can be beneficial. While Chapter 7 or Chapter 13 bankruptcy may be the most suitable way to reestablish financial stability, it may be wise to consider all of the pros and cons before filing.

Consumers are told that bankruptcy will negatively affect their credit scores and that they may struggle to get financing for auto loans or mortgages. However, while individuals are trying various other options (including, for some, resorting to payday loans) they may fall deeper into debt. At this point their credit scores are already adversely affected, and with the arrears on credit card payments, financing will be difficult to secure. Adding stress to an already difficult situation, creditor harassment may become unbearable.

A bankruptcy filing is the only option that will provide some level of protection. Although a Chapter 7 bankruptcy may require for the liquidation of some assets, exemptions may allow the filer to keep a home, car and personal items. A Chapter 13 bankruptcy will allow those with secured incomes to reorganize their debt payments over an extended period. The moment a person files for bankruptcy, an automatic stay bars creditors from taking any action to collect a debt, including phone calls, repossessions, wage garnishments and more.

Maryland consumers who are looking for a fresh financial start may benefit from consulting with an experienced attorney who can explain the advantages of bankruptcy protection in specific circumstances. The details will allow the individual to make informed decisions about matters that will affect future financial stability. The guidance and support of a seasoned lawyer can continue throughout any bankruptcy proceedings that ensue.

Source: investopedia.com, “Should You File For Bankruptcy?”, Glenn Curtis, Accessed on Nov. 19, 2016