Declaring bankruptcy can be incredibly stressful, and many people who do it can feel as though they have let themselves and others down. However, it is essential to remain positive, and focusing on the advantages that filing for bankruptcy brings can help lift a person’s spirits and enable them to see that they’ve made a smart decision. To help, we have listed seven benefits of filing for bankruptcy:
1. As soon as your application for bankruptcy is processed, the automatic stay triggers. This means that debt collectors can no longer take action to collect their debts or try to repossess your property. They aren’t allowed to threaten you, send letters, or call you. This can provide massive relief and also puts a stop to stressful situations such as looming evictions, foreclosures, or utilities being shut off.
2. Filing for bankruptcy means that you may be eligible to eliminate some of your debts. This means that you will no longer be obligated to make repayments on dischargeable debts, therefore immediately putting you in a better financial position than before.
3. Using bankruptcy exemptions enables you to hold onto some or all of your property and possessions. You won’t necessarily have to sell your home or your car, so you can continue living without worrying about whether or not you’ll have a roof over your head or be able to get to work.
4. Though your credit record will be affected (filing for bankruptcy remains on a person’s record for 10 years), your credit rating will improve over time. The severity of the impact first felt will slowly lessen and you’ll see your credit score start to get better and better.
5. Eliminating credit cards and store cards from your life can lift a weight off your shoulders and can help you to learn how to live within your means rather than getting into debts that spiral out of control. If you declare bankruptcy, you are obligated to take a course on how to better manage your money too, so you will hopefully avoid getting into a similar situation in the future. Besides, missing payments, defaulting on loans, or having your house repossessed negatively affects your credit score anyway, and at least this way you are taking back control.
6. Bankruptcy can mean that old tax liabilities (those older than three years) are eliminated, which can free up more money and is one less thing causing you stress.
7. Declaring bankruptcy sooner rather than later means you can start rebuilding your credit history and reorganizing your finances so you get back on track more quickly. If bankruptcy is your only option or the wisest option, it is better to face it and create a fresh start for yourself as soon as possible.
Should you contact a bankruptcy lawyer?
Filing for bankruptcy is not a decision anyone should take lightly, and whether or not this is the best option for you will depend on many factors such as the number of debts you have, the amount you owe, and what assets you have. If you are contemplating bankruptcy, hiring an experienced bankruptcy attorney can help guide you through the process and give you advice and peace of mind that you are doing the right thing.
At the Hedtke Law Group, we specialize in bankruptcy matters and can help protect your rights and possessions. Give our compassionate and professional team a call today at 626.502.8405 – we’d be happy to help.