Financial Options for Getting Out of Holiday Debt

The holiday season can be costly. Gifts, parties, food and drinks can all add up to significant spending for loved ones.

If you are struggling with debt, a bankruptcy attorney can help you explore the many options for debt relief which are available to you. By addressing your financial situation early, you can plan for the holiday season and begin the New Year with a fresh financial start. Don’t struggle through another costly holiday season on your own. Guidance from an experienced bankruptcy attorney can help you find the right method of debt relief for you.bankruptcy attorneys

The Benefits of Bankruptcy

One of the most helpful practical benefits is the "automatic stay" that occurs as soon as a debtor files for bankruptcy. According to the United States Bankruptcy Court for the District of South Carolina, the automatic stay prevents most types of collection actions from occurring during the pending period of your bankruptcy case. This includes phone calls, letters, emails, repossession, and foreclosure. The automatic stay also applies to certain other types of legal actions related to debt, such as a civil suit to garnish wages or levy a bank account in order to pay a debt.

An automatic stay does not, however, apply to all legal cases. Pursuant to 11 U.S.C.§ 3-362, the automatic stay does not apply to criminal proceedings or child custody matters (including paternity, visitation, and the establishment or modification of child support). Creditors may also ask the court to lift the automatic stay in certain situations. This is common when a creditor has already begun the legal process of repossession or foreclosure before the debtor filed for bankruptcy. The automatic stay remains in effect from the time a bankruptcy petition is filed until the time a final discharge is ordered. For a Chapter 7 bankruptcy, this period is several months. For a Chapter 13 bankruptcy, which involves a payment plan made over several years, the automatic stay can remain in effect for several years. Because of this, creditors may be more likely to request the court lift the automatic stay during a long Chapter 13 bankruptcy.

Another important benefit to bankruptcy is the ability to have a fresh start in your finances. When a debtor is only able to make very small payments on a large amount of debt, there is little chance that the debt will ever be completely paid off - let alone in a reasonable time frame. In the meantime, the debtor’s payment history continues to show delinquent payments. Payment history is a significant portion of a person’s FICO credit score. When debt is discharged in bankruptcy or refinanced into a manageable payment plan, a FICO score will show improvements in the payment history component. The debtor will also be relieved from the burden of making onerous monthly payments which are not improving his or her overall financial health.

If you are struggling to get out of debt, contact a skilled Columbia bankruptcy attorney to explore your options. An attorney will help you find the solution that best meets your financial goals.  

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