The Benefits of Filing for Bankruptcy

Many people would probably cringe at the mere thought of having to file for bankruptcy. But in reality, many are forced to seek out bankruptcy as the only viable solution to their debt problem. While nobody wants to have a bad credit report, in certain circumstances bankruptcy can actually be beneficial not only for you, but your family as well.

Below is a list of the possible benefits of filing for bankruptcy:

The chance to be free from debts. A Chapter 13 Bankruptcy will discharge you from all your obligations to your creditors. However, it is worth noting that not all types of debts can be discharged by bankruptcy such as student loans, liens, family support, to name a few.

The court is the one to decide whether you will be eligible for a Chapter 13 Bankruptcy based upon the result of your Income Means Test. If you fail this test the court may rule a Chapter 7 Bankruptcy which will put you under a five-year repayment plan.

Click here to find out if bankruptcy might be right for you.

Stop repossession. When a borrower files for bankruptcy, the bank or lending company cannot continue with the repossession procedures until the court ruling has been completed. This gives you the opportunity to catch up with your payments and avoid losing your home to the lender.

Stop debt collection. If you are tired of hearing from creditors and debt collection agencies, filing for bankruptcy can give you some space and peace of mind. Once your bankruptcy application has been filed creditors and debt collection agencies must stop all debt collection attempts at once.

A fresh start to rebuild credit. After being discharged, check your credit report to make sure that there are no errors or inaccuracies in your file. Order a copy from each of the credit report agencies so you can start rebuilding your credit.

Weigh the Pros and Cons. Yes, filing for bankruptcy is not advisable for all. It should not be seen as an instant solution to escape debt problems. Don’t know if bankruptcy is right for you? Take two minutes and fill out this questionnaire. A bankruptcy attorney in your area will call you to discuss your situation and help you determine if bankruptcy will work for you.