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Chapter 7 Bankruptcy: Should I File Just to Get Out of that Collections Lawsuit?


Last year, nearly 800,000 people filed for personal bankruptcy. Filing is usually the culmination of a long decision-making process prompted after months or years of debt that have potentially been devastating both to the budget and the psyche. If you are worried about your finances, consider scheduling a consultation with a bankruptcy attorney from Fitzgerald & Campbell, APLC. You have multiple options, and in many cases, bankruptcy is the last resort.

If you have been served with a collection lawsuit, your attorney will need to review your financial/debt situation, along with the documentation delivered to you most likely by a deputy or private process server. Poring over the details may be the last thing you want to do, but not only could the figures be questionable, but you could also be dealing with a case where the statute of limitations has expired, fraudulent activity played a role or more.

While your attorney may suggest other choices such as replying to the collections lawsuit and defending you in court or negotiating with creditors, bankruptcy may be the best choice to deal with all of your looming financial issues; for instance, you may be in trouble with your mortgage lender, you may be worried that your vehicle is going to be repossessed, and there may be added complexity and worry if you have a family member who helped out as a co-signer and could now potentially be dragged into negative repercussions also.

Where there is one major debt, others usually follow—which is why the automatic stay is so important, and so beneficial to you if you are being chased by creditors. As soon as you file, the automatic stay begins functioning as an injunction to halt all collections activity. And yes, this includes mortgage lenders if you are in danger of foreclosure; however, in that case (especially in dealing with what could be a substantial and secured loan) you may only be afforded breathing room for a few weeks as the lender could petition the court to have the stay removed.

If you are eligible for Chapter 7 bankruptcy, you could see your debts discharged within three to six months, leaving you with a clean slate—and your financial issues cleared.

Have you experienced problems with your loan service provider or student loan program, or are you in danger of defaulting on your student loan?

Speak with an attorney from Fitzgerald & Campbell, APLC as soon as possible to examine your options. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy, and other debt management processes. We are here to help! Click here to schedule a free 30-minute consultation, call us at (844) 431-3851, or email us at

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