What Are the Top Benefits of Filing for Bankruptcy?

 Posted on December 12, 2022 in Bankruptcy

Filing for bankruptcy is a difficult decision to make, and it can feel like a last resort for people who are struggling with debt. Bankruptcy can be a complex and emotional process, and if you are in this situation, it can be hard to see the light at the end of the tunnel. However, there are some meaningful benefits that come with filing for bankruptcy. Here are some reasons that bankruptcy may ultimately be the best choice for you:

Stopping Creditor Harassment 

When you file for bankruptcy, creditors are legally prohibited from trying to collect on your debts or harassing you further. You also have protection from repossession or foreclosure on any property you own. The automatic stay order that is issued by the court after you file a bankruptcy petition will prohibit creditors from contacting you in any way, which can be a relief if you have been dealing with constant phone calls and letters. 

Stopping Lawsuits & Wage Garnishments 

When creditors have exhausted all other attempts to collect money from you without success, they may turn to legal action. A lawsuit against you may seek to recover the money that is owed, and if a judgment is issued in a creditor's favor, they may seek to enforce it by freezing your bank accounts, attempting to garnish your wages, or placing a lien on your property. By filing for bankruptcy before this happens, you can stop any legal proceedings in their tracks and prevent any further damage to your finances or reputation. 

Eliminating Debt 

The primary advantage of filing for bankruptcy is that it allows you to eliminate most, if not all, of your unsecured debts, such as credit card debt and medical bills. Depending on the type of bankruptcy you file and the extent of the assets you own, you may be able to keep most of your property and avoid other issues that could affect your family's finances. Once your bankruptcy case is discharged by the court, those debts are gone forever and cannot legally be collected from you again. 

Rebuilding Your Credit 

Bankruptcy does have an impact on your credit score, but if you are struggling with debts, have missed payments, or may be unable to make payments in the future, it is likely that your credit has already been affected. By eliminating debts through bankruptcy, you can return to financial stability and begin taking steps to improve your credit score in the future. While a bankruptcy will remain on your credit report for seven to 10 years, it will not affect you permanently, and as you rebuild your credit, your score will begin to increase once again over time. By taking action now to address your debts, you can be better prepared for a successful future.

Contact Our New Braunfels Bankruptcy Lawyer

Filing for bankruptcy is not something anyone takes lightly, but understanding its advantages can help make the process easier - both mentally and financially - especially if you are dealing with mounting debt and creditor harassment. Understanding the benefits that bankruptcy can provide will ensure that you can make informed decisions when it comes to your finances, both now and in the future. To learn more about your bankruptcy options or to begin the process of eliminating your debts, contact the Schertz bankruptcy attorney at the Law Offices of Chance M. McGhee today. Call our office at 210-342-3400 to set up your free consultation.

Sources:

https://www.lendingtree.com/bankruptcy/pros-and-cons-of-filing-for-bankruptcy/

https://www.nerdwallet.com/article/finance/bankruptcy-best-option

https://www.consumercredit.com/debt-programs/bankruptcy-counseling/is-bankruptcy-for-you/