Filing for bankruptcy allows people and businesses to resolve their debts when they are not able to continue paying. It allows them to have a fresh start and work towards rebuilding their credit. While bankruptcies are often seen as a negative option to consider, there are many benefits they offer to the right filers. Below are some of the top benefits some people may gain from the decision to file for bankruptcy.
• Automatic Stay Triggered
For those who are drowning in debt, the constant calls and letters from debt collectors can cause a lot of stress. As soon as you file for bankruptcy, it will trigger what is referred to as an automatic stay. This prevents any of your creditors from taking further action to collect debts from you. It also stops them from repossessing any of your property, calling you, sending you letters or threatening to sue you. It may also put a stop to things such as foreclosures, evictions, utility shut-offs and wage garnishments.
• Debts Forgiven
Depending on your situation and the type of bankruptcy you file for, you may be able to have some or all of your debts wiped clean. Using some of the many bankruptcy exemptions, many filers will be able to go through the process without losing their property.
• Rebuild Credit
One of the best benefits of filing for bankruptcy if you are drowning in debt is the ability to start rebuilding your credit within a couple of years. Depending on whether you file a Chapter 7 or Chapter 13 bankruptcy, your credit rating might start improving within a couple of years after your debts are discharged. The bankruptcy itself, however, will remain on the filer’s credit report for seven to ten years.
• Improved Financial Situation
When all of your debts are paid off and you no longer have credit cards, you can learn how to live within your financial means and prevent any future financial issues later on. When debtors file personal bankruptcy, credit counseling will be a requirement for the discharge to be approved. This will allow you to get educated on how to rebuild your credit and learn better financial habits to live by.
• Get Help From Bankruptcy Attorney
As you can see, there are many benefits of filing bankruptcy under the right circumstances. The key to a successful outcome relies heavily on getting the appropriate legal help. A bankruptcy attorney can discuss with you all of the options available. They can ensure your property stays protected, all of your dischargeable debts get forgiven and your creditors don’t violate your rights under bankruptcy laws.