The 5 Benefits of Bankruptcy

Posted On: March 15th, 2013

Filing for bankruptcy is something that we all don’t ever want to do, but it shouldn’t be seen as the dreaded last result that many people think it is. The decision to file is not always easy, but bankruptcy should not be viewed as the end of the world.  Here are the top ways bankruptcy can help.

  1. Eliminate Debt is as little as 4 months:  If you are eligible for Chapter 7, debt can be completely discharged within 4- 6 months and it usually only requires one post-filing trip to the court.
  2. Creditors Can’t Collect: The moment your attorney files for a bankruptcy petition, harassing calls and surprise visits from creditors and collection agents are automatically stopped.  This is called an “Automatic stay” and is issued pursuant to Title 11 of the United States Code § 362. It prohibits creditors from taking any collection actions against you or your assets.
  3. Get a Fresh Start: After you’ve filed, your slate will be wiped clean. You can apply for new loans and credit cards, and while your bankruptcy filing will remain on your credit history report for 10 years, you can still build up your credit again within that time period. Just because something is reported on your credit report does not mean it will have a negative effect on your credit standing.
  4. You can keep your Home: When you file Chapter 13 bankruptcy you can keep your home.  You will have to start paying your mortgage again after you enter your petition, but you may be able to negotiate a more manageable interest rate. Although you will have to pay back your back-mortgage payments, this can be done over a 3 -5 period. This is a much better option for homeowners than foreclosure.
  5. No one has to know: You have a right to keep your financial information private from friends, family, and colleagues.  The only time your bankruptcy filing will come out is when you are asked for your credit report when applying for new loans or credit cards.

 

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