Bankruptcy isn’t something to which people look forward or want to happen in their lives, but sometimes they are left with no other choice because of a desperate financial situation. Most people consider bankruptcy a bad thing and something to avoid. At best, it is viewed as a necessary evil.
Ideally, we could live in a world without any financial challenges, but that is not the case. The good news is there are benefits to bankruptcy and understanding the positive side of things can help you make smarter decisions about repairing your finances.
The upside of bankruptcy includes:
Stopping Creditor Contact
When you file for bankruptcy, a legal term known as an automatic stay is created. This means creditors are no longer allowed to demand payment from you. The endless calls and contact from those to whom you owe money stop as soon as you file for bankruptcy.
Ending Wage Garnishment
If you are deep into a strenuous financial situation, you might be facing the possibility of wage garnishment or already be in a situation where a portion of your salary is taken to pay your creditors. Bankruptcy puts an end to this. Chapter 7 bankruptcy helps you end the embarrassment and inconvenience of wage garnishment.
Stopping Foreclosure Efforts
If your financial situation includes a problem with your home mortgage, filing for bankruptcy will put an end to foreclosure efforts. You are given time to catch up on your payments and might even be eligible for a loan modification or refinancing of your loan. If keeping your home is not a priority or is not possible, a short sale might be an option. Bankruptcy can be especially helpful for those who are “underwater” on their mortgage, which means they owe more to the lender than their home is worth.
Eliminating Debt
Perhaps the most important upside of bankruptcy is its ability to eliminate some – or all – of your debt. When you file for bankruptcy, you might have the option of releasing your obligation of repayment of certain debts. This does not apply in most cases to child support, student loan payments, and taxes or other government debts, but it does apply to a great deal of consumer debt.
You will be able to move forward with your life without concern for money you are unable to repay to creditors. Discharge of debt is one of the greatest reliefs provided by bankruptcy and is the reason many people ultimately choose to file.
For more information about the types of debt that can be discharged in a bankruptcy see the USCOURTS.GOV Bankruptcy Guide.
If you are considering bankruptcy, but you have concerns about the stigma attached to it or you aren’t sure if you have enough valid reasons for filing, we can help. We’ll evaluate your situation and help you determine if bankruptcy really is your best option. For more information or to schedule a consultation, contact the Law Offices of Robert M. Geller at 813.254.5696.
