Filing bankruptcy gets a bad reputation. Some people see it as a personal failure, but this is not true. Bankruptcy is a right you have. It is a way to get yourself back on track financially through a legal process.
When you file bankruptcy, you take control of your financial situation. It is not a failure, but rather a new start that lets you overcome issues that may have led you to a bad financial position.
Bankruptcy is very beneficial for you in a variety of ways.
The National Association of Consumer Bankruptcy Attorneys explains one of the biggest benefits of bankruptcy is the automatic stay. Once you file for bankruptcy, the court issues a stay that will stop all creditor activity against you. This includes pending lawsuits and collection activities. Once your creditors get notice of your bankruptcy, they must stop all attempts to collect on debts you owe.
The automatic stay allows you time to get your financial situation in order. It also allows you to avoid creditor issues while you wait for the court to make a ruling in your case. Once the court discharges your case, the stay lifts.
Dismissal of Debt
Another major benefit is the dismissal of debt. Bankruptcy will generally allow you to seek relief from most secured debts and some unsecured debts.
If you file Chapter 7, once the court discharges your case, any outstanding debts will go away. With Chapter 13, you will repay some debts, but the discharge will wipe out any remaining debt.
Do note that you cannot discharge some debts. You should speak with a bankruptcy attorney Royal Palm Beach FL about the types of debts you have and is the court can discharge them.
If your financial situation is out of control and you feel like you are drowning in debt, bankruptcy can be the right move. It can help you to avoid many problematic situations and get your finances back on track.