Benefits of Declaring Bankruptcy

Benefits of Declaring Bankruptcy

The benefits of filing for bankruptcy for those that qualify are numerous, depending on the individual circumstances, but a few of the more common ones include:

Immediately stop harassment from bill collectors and creditors. After filing your bankruptcy petition, the “automatic stay” immediately protects you by prohibiting creditors from calling, billing, threatening, suing and/or harassing you in any way in an effort to collect from you. Once you have filed your petition, even secured creditors must get court permission if they wish to repossess your car or foreclose on your home. Learn More about Stopping Creditor and Bill Collector Harassment

Stop attempts to foreclosure on your home. Once you have filed, the bankruptcy court’s “automatic stay” will immediately halt any attempts to foreclose on your home; eliminating one of the major emotional stresses and allowing you to focus on rebuilding your financial security.

Eliminate your unsecured debt. Medical bills, credit cards, bank loans, personal loans, judgments, mortgage foreclosure deficiencies, business debts, overdraft charges and utility bills can all be discharged or eliminated by filing Chapter 7.

Catch up on your car or mortgage payments. Once your unsecured debts (bills) have been addressed, you can focus on catching up on your secured debt (loans for things such as your car, home, etc…)

You can begin to rebuild your credit. After you’ve completed the bankruptcy process, you may actually find it easier to improve your credit. It is not uncommon for people who have declared bankruptcy to be offered new credit cards as soon as a couple months after receiving a discharge of debts. In some cases, it is believed that a successful bankruptcy filing could improve your credit. The majority of people who file bankruptcy already have bad or not so good credit. We say to those people who are concerned about their credit, “bankruptcy is not your credit problem – it is the solution to your problem”. In our experience, we have seen some people obtain new car loans and/or bank loans within a year or two after their discharge of debts, even from their old creditors.

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