We know that filing bankruptcy is a difficult decision. It's not the answer for everyone, but for those who qualify, bankruptcy is truly a way out of financial trouble. If you are on the fence about whether or not you should file for bankruptcy, start by considering the benefits of filing.
Top 5 Benefits of Filing Bankruptcy:
- Protecting Your Home: According to most states’ bankruptcy laws, the home you live in is exempt from liquidation if the equity stake is within the designated amount.
- Stop Creditor Harassment: One of the most appreciated benefits of bankruptcy is that creditors are not allowed to contact you. As soon as a petitioner files for bankruptcy, the automatic stay prohibits creditors from seeking payment. If they ignore the automatic stay and contact a debtor during bankruptcy, they can be penalized by the court.
- Discharge of Debt: Debtors can be discharged of unsecured debt through Chapter 7 or Chapter 13, including: credit cards, car payments, medical bills, etc. Debtors usually receive a discharge within 120 days when filing for Chapter 7 bankruptcy. When filing for Chapter 13 bankruptcy, a discharge is issued once the agreed upon payment plan is completed.
- Privacy: Bankruptcy is not a public accounting. Friends, family, co-workers, etc. need never know that you filed for bankruptcy. Your financial information is semi-private. The only time a bankruptcy filing would become “known” is when applying for a new loan or credit card as it is listed on the credit report.
- Fresh Financial Start: Once the discharge of debt is received, your debt slate is wiped clean and you embark on a fresh financial start. You can apply for loans and credit cards and begin re-building your credit. Interest rates associated with any credit accounts will be higher than the norm at first, but with positive pay history serving as proof that you can be a responsible debtor, many bankruptcy petitioners find that they can repair their credit faster than they expected.
If you need help filing for bankruptcy or need to discuss which type of bankruptcy would best suit your current financial situation, contact Dolen, Tucker, Tierney & Abraham. Our bankruptcy and estate planning attorneys are well equipped with both the knowledge and the experience necessary to handle your case.