Bankruptcy continues to be one of the quickest, most affordable ways to get yourself out of debt while also stopping creditors from contacting you about the debt that you own. There are many benefits to filing for bankruptcy. Keep reading to learn just a few of them.
Bankruptcy Can Eliminate Your Debts
The primary benefit of filing for bankruptcy is to significantly reduce or completely eliminate the amount of debt that you owe to your creditors. The process is called discharging your debts. In other words, you will not be legally required to pay off your debts as soon as the bankruptcy is ordered by the court, which is generally a few months following the bankruptcy filing.
It is important to keep in mind that there are some debts that cannot be discharged, including child support, some student loans, alimony, fines for illegal activity, and some taxes. However, the majority of everything else, such as medical and credit card debt, payday loans, unsecured loans, etc., can be forgiven and discharged by the court.
Bankruptcy Can Halt Debt Collection Efforts
Another benefit to filing for bankruptcy is a process known as an automatic stay. This offers an essential firewall between debtors and creditors. It essentially keeps your creditors from contacting you in any shape or form to collect the debt that is owed to them. In addition, any existing actions that have been formally and previously taken against you will immediately cease. This includes anything from repossessions and foreclosures to lawsuits and judgments.
Bankruptcy Can Protect Your Assets
One common myth regarding bankruptcy is that you will have to give up all of your possessions. Although Chapter 7 bankruptcy is typically referred to as liquidation bankruptcy, there are exemptions to this particular bankruptcy filing. These exemptions can be used to keep a number of your possessions from being liquidated. Some of these possessions include your home, land, vehicle, furniture, clothes, household goods, and maybe even cash. Therefore, while you may be getting a clean slate, it doesn't necessarily mean that you will be starting from complete scratch.
Contact a Bankruptcy Attorney
If you have found yourself in a difficult financial situation, you may be able to see the light at the end of the tunnel by filing for bankruptcy. If you would like to find out what your options are in terms of bankruptcy, schedule a consultation with a local bankruptcy attorney. A bankruptcy attorney can provide more information.