What are the Advantages of Bankruptcy?
When looking at the advantages of filing bankruptcy the list could be virtually endless. The main benefit of filing for bankruptcy is the bankruptcy discharge. The ability to wipe out a large amount of unsecured debt speaks for itself. Most people when they think of the word bankruptcy think of Chapter 7 bankruptcy. A Chapter 7 bankruptcy shows its power and the ability to discharge all unsecured debts including credit cards, medical bills, personal loans and payday loans. A Chapter 7 bankruptcy can be done quickly in approximately 4 to 6 months. This can help the debtor that is buried under a mountain of credit card bills recover quickly with the fresh start that a bankruptcy filing promises. The other lesser-known type of filing is Chapter 13 bankruptcy. Where a Chapter 13 really shines is in giving the debtor the ability to protect their real estate, while getting caught up on back payments. A Chapter 13 bankruptcy has a repayment plan that lasts 3 to 5 years. The debts are paid by priority with the secured debts at the top of the list and the unsecured getting the minimum amount. At the end of the Chapter 13 payment plan any unsecured debts that are left will be wiped out in the bankruptcy discharge.
One powerful advantage to all chapters of Bankruptcy is the automatic stay. The automatic stay is put into place as soon as the bankruptcy is filed and stops all collection activity and even any contact by the creditors. It will also stop foreclosure on the debtor’s home and can provide an opportunity to catch up on payments that have been missed. It may also prevent a vehicle or other property from being repossessed. In addition, bankruptcy can stop wage garnishment and harassment by debt collectors. Having the automatic stay in place with a bankruptcy attorney to help enforce it, the debtor begins to see the real power of a bankruptcy filing.
At the end of the whole process the individual filing for bankruptcy will enjoy the relief of being on the road to becoming debt-free. Being debt-free isn’t a guarantee of filing bankruptcy, but with the help of a bankruptcy attorney and the debtor doing diligence becoming debt-free might not be far-fetched.
Getting answers to those tough bankruptcy questions needs to be thought of before you make a decision when it comes to your financial problems. Finding the answers to help you understand your situation more clearly can help you make an informed decision about filing bankruptcy. Take a minute to call or fill out the form to have a FREE NO OBLIGATION CONSULTATION with a bankruptcy attorney in your area.