ADVANTAGES TO FILING FOR BANKRUPTCY
Filing for bankruptcy is a life-changing event requiring planning, thought and a good deal of legal assistance, but if done at the right time and for the right reasons, it can be a real help for people who need to climb their way out of a financial hole. It’s up to you and your lawyer to decide if filing for bankruptcy is right for you.
- You’ll keep your home
If your equity stake in your home is within certain limits, it is generally exempt from liquidation. Similarly, motor vehicles up to a certain value, and many household goods, are also exempt.
- Your privacy will be maintained
Even though the stigma of filing bankruptcy is mostly a thing of the past, your financial business is your own, and unless you are applying for a loan or need to run a credit report, you never have to disclose your decision to anyone.
- You’ll have access to helpful resources
Working with a lawyer is the most efficient way to prepare bankruptcy documents and file, but before you get to that point, there are lots of resources online and in your community to help you.
- You can get a fresh start
Once you successfully declare bankruptcy, the slate is wiped clean. You may still have damage to your credit, but since you’ve been given a chance to start over, the downward slide will stop, and you can begin building your credit again.
- You can get your driver’s license back
If you’ve lost your driver’s license as a result of unpaid debt arising from a motor vehicle accident, declaring bankruptcy might be the only way to clear that debt and get your driving privileges reinstated.
- You’ll get your full paycheck
Your wages will no longer be garnished. If your employer received a court order requiring part of your wages be sent to a creditor, this will stop when you file for bankruptcy.
- You’ll be able to deal with your creditors fairly
Declaring bankruptcy doesn’t eliminate liens on property obtained by creditors before filing, but provisions in the bankruptcy code allow for many debts to be lowered and time given to allow for payment. Often this allows you to keep property you might have lost.
- Your creditors will stop bothering you
It’s one of the most psychologically difficult aspects of being in debt: dealing with the constant pressure of phone calls and correspondence from creditors demanding to be paid money that you simply don’t have. However, once you file for bankruptcy, even before it is granted, an automatic stay on creditors means they can no longer contact you, and they can be penalized by the court if they do.
- You’ll stop accruing interest charges
This is a huge, and immediate, improvement to your quality of life. Along with ending harassment from creditors, filing for bankruptcy also puts a freeze on interest charges and penalties accruing from your debt.
- Your debts will disappear
This, of course, is the big one. Once you’ve declared bankruptcy, and your assets have been put toward your debt, all debts are relinquished and you get the opportunity to start over and create a financial future where you are in control.