3 Major Benefits of Filing for Bankruptcy
For anyone faced with the idea of filing bankruptcy, stress and discomfort are often common feelings. People may also feel as though they have failed in some way, adding to their difficulties with going through the process. Even taking the first step and talking to an attorney about how to proceed can be daunting. However, it’s important to remember the benefits of bankruptcy.
The Value of Bankruptcy is Often Overlooked
The right frame of mind can go a long way. By considering the benefits of bankruptcy, someone thinking about filing will be able to make a better choice about their financial future. This will also help to feel more optimistic about the overall process. The advantages of bankruptcy can be significant depending on the person’s situation when they decide to file.
The three biggest benefits to bankruptcy are:
- Filing bankruptcy triggers an automatic stay, which prevents creditors from taking action to collect debt,
- Many debtors go through the bankruptcy process without losing much or any of their property and assets, and
- Bankruptcy is a chance to start fresh, and a huge learning opportunity for the development of financial freedom.
Prevent Creditors from Taking Action
As long as someone owes money to creditors, and that money is overdue, those creditors have the right to try to collect on their debt. There are certain things they can do under the law, and certain things they cannot. For example, they can call the debtor during certain hours, but they cannot send someone to the debtor’s door to threaten them. Even over the phone, though, many of the techniques that are used to collect a debt can feel like, and sometimes border on, harassment. Because of that, a debtor can feel stressed out and threatened every time their phone rings.
Filing bankruptcy stops all of that. Creditors must cease their efforts at collection, which means they have to stop calling, emailing, and any other tactics designed to intimidate and get the debtor to pay what was owed. Instead, they must wait for the bankruptcy process to move through the court, and for the decision of that court. In many cases the debt will be removed completely. In some cases, some or all of the debt may still need to be paid. This can depend on the type of debt, who it was owed to, and which type of bankruptcy was filed.
Keep the Majority of Real and Personal Property
Filing bankruptcy does not mean that creditors can take everything a debtor owns to satisfy the debt. The home that the debtor lives in and the car they drive are generally safe from being taken in most Chapter 13 bankruptcy proceedings. The same is true of personal effects inside the home. If there are a lot of extra items, such as additional cars, motorcycles, boats, or other big-ticket assets, a creditor may try to take these to satisfy a debt. In Chapter 7 bankruptcy cases, the court may agree to that and some of the debtor’s property will be lost.
It is important for a debtor to think about which type of bankruptcy they want to file for, and talk to their attorney about their options. You may be able to restructure and pay off their debt over time, while keep your property. Or you may choose to liquidate assets to wipe away debt completely.
Start Fresh and Gain Financial Freedom
Getting a fresh start is one of the main reasons people file for bankruptcy. It’s one of the biggest financial benefits, but also from a mental and emotional standpoint. Living without credit cards teaches a person to live within their means and plan for the future. It may not always be an easy adjustment, but after some time, it becomes second nature.
Starting fresh financially can lift a big weight off your shoulders and give you the tools they need for a brighter future. You can also use the knowledge gained during the process to avoid similar financial problems later in life. Filing for bankruptcy can help you put past financial concerns behind you and find better ways of preparing for bumps in the road. Essentially, it gives you the benefit of a new start.
You might also be interested in reading: 10 Good Reasons to Consider Filing for Bankruptcy.
Choosing the Right Type of Bankruptcy Protection
For anyone contemplating bankruptcy, choosing to file for Chapter 7 or Chapter 13 is an important factor. Both options can be beneficial, depending on the individual debtor. The attorneys at Amourgis & Associates handle filings for both Chapter 7 and Chapter 13 bankruptcy cases throughout Ohio.
By reaching out to us today, our lawyers can provide the support you need and answers to all your important questions. We work to find the best debt relief solution for your current needs and financial future. Call our offices at (330) 535-6650 to schedule an initial consultation or contact us online.