You read that right. Filing for bankruptcy can actually bring you some advantages. Most people think of personal bankruptcy as the end of the world. This is definitely not the case. Many people recover from filing for personal bankruptcy, and also enjoy some benefits. Here is a list of positive things you can gain by filing for personal bankruptcy:
Stop Collection Calls and Other Forms of Harassment
Perhaps the most welcomed benefit of filing for bankruptcy is automatic stay, which is a mechanism that prevents creditors from calling and engaging in other tactics to collect debt. Automatic stay is triggered the moment you file for bankruptcy. It will prevent creditors from doing things like calling constantly, threatening to sue, sending collection letters, withholding pay, or repossessing assets like cars. It also prevents harmful forms of harassment. If you have been subjected to collection abuse, contact a bankruptcy attorney in Scottdale or in your local area to take legal steps against the harasser.
Discharging of Some Unsecured Debt
Filing for bankruptcy also frees you from any contractual obligations pay back dischargeable debts. Keep in mind that this depends on the chapter that you file for bankruptcy under. Under Chapter 7 bankruptcy law, most unsecured debts are dischargeable, including credit card debt. Once a judge has discharged a debt, you no longer have to pay it back, and the creditor cannot try to get you to pay back the loan either. This can be a great opportunity for you to start over.
Keep Your Property
If you default on your debt and don’t file for bankruptcy, you run the risk of losing property assets to creditors who come looking for their due. When you file for bankruptcy, your property may be protected against confiscation. Once again, this depends on your case and the nature of the filing. However, many debtors who file for personal bankruptcy manage to keep their private property.
Improve Your Credit Score
Yes, bankruptcy does negatively affect a person’s credit score. A notification of a bankruptcy filing can remain on your credit history for up to a decade. But it’s not all bad. Once you have emerged from the bankruptcy proceedings, most of your unsecured debt will be discharged. You will be free to start rebuilding your credit again. You can start by repaying any remaining non-discharged debt. When you start paying back, your credit score would naturally improve.
Face Your Demons and Start Over
The most long-lasting effect of filing for personal bankruptcy is that you get to face reality head on, face the facts, and then move on and start over. You cannot hide from creditors forever. By filing for bankruptcy, you can protect yourself from aggressive collection tactics and keep assets that could get confiscated. Once that’s sorted out, you can start getting your personal finances back in order. You will have the peace of mind to start over.
Find a good lawyer to file for personal bankruptcy. Do not forget to reflect back on what got you into this mess and avoid repeating the same mistakes in the future.