When most people think about filing for bankruptcy, they think about all of the negative things that are going on that lead to filing for bankruptcy as well as the negative impacts that filling for bankruptcy can have. However, many people fail to realize the major benefits that can come from filing for bankruptcy. If you are thinking about your financial options, it is important that you learn some of these benefits of bankruptcy. Then, you can better determine what is the best option for your future and your finances.
Collections Calls Will Stop
One of the biggest benefits of filing for personal bankruptcy is that you will stop getting calls from collections agencies when you file. When you are in financial constraints and considering bankruptcy, you likely have been unable to pay your credit card, mortgage, or other bills on time or at all. This results in numerous daily collections calls, semi-threatening letters, and other collections correspondence.
Once your bankruptcy petition is filed, collections agents are no longer allowed to contact you or try to collect payments from you in any way. No communication is allowed while the bankruptcy is being processed. This can give you a much-needed break from dealing with creditors and will just give you a minute to breathe and reduce your financial stress.
Lawsuits and Garnishments Will Go Away
After you file for bankruptcy and your bankruptcy petition is approved by the court (through court hearings), you will also have the benefit of getting out from under lawsuits and garnishments that you may be facing because of your debts. When you do not pay your creditors, they can take several steps to try to recoup their money.
One of the steps that creditors will take is to file a lawsuit against you. Essentially, they will be suing you for nonpayment of your debt and will be asking the court to mandate that you pay them back. Once the lawsuit is filed and won, and you still haven't paid your debt, the collection agency can begin garnishing your wages. Wage garnishment can be a major hit to your monthly income as wages can be garnished up to 25 percent of your disposable income.
When you file for bankruptcy and get either a discharge (Chapter 7) or a repayment schedule (Chapter 13), the lawsuits and garnishments will also stop. In fact, when you first file your bankruptcy, they will be stayed (stopped) until the final decision is made on your bankruptcy regardless of the outcome.
You Can Start Over
Perhaps the biggest benefit of bankruptcy is that it can give you a clean slate to work with. Whether you are filing to have your debts discharged or you are trying to repay your debts using a new repayment plan, you will be able to start fresh in your financial journey.
Instead of trying to play catch-up with past due balances, fees, and more, you will either no longer be responsible for paying the debt or be able to begin again with a new monthly payment amount. This can make a huge difference in your finances and in your life in general. Having a fresh start in dealing with your debts will reduce stress, worry, and anxiety, and give you a sense that you can accomplish your financial goals going forward.
Now that you know some of the major benefits of filing for bankruptcy, you can contact a bankruptcy law attorney to help you start the filing process as soon as possible.Share