5 Benefits of Filing for Bankruptcy

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Julie O'Bryan  |  11-06-17 | 3:10pm

When you start a new business or you're just trying to get by, you never imagine that you will ever have to file for bankruptcy. However, these things happen, and it's normal. Thousands of people file for bankruptcy each year. While it's an unpleasant scenario, bankruptcy can bring relief to many business people who are struggling with debt. Since there different types of bankruptcies, it's best to discuss things with a bankruptcy lawyer before going further. Here are the 5 benefits of bankruptcy and why it might be a good choice for you.

Stop Creditors from Hounding

If you are drowning in debt, there are chances that you receive calls and visits from creditors almost every day. Once you contact an experienced lawyer and file for bankruptcy, you can get relief from creditors. After the bankruptcy is filed, you get a stay period and your creditors aren't allowed to contact you then. This gives you the much-needed respite and peace of mind. If your creditors contact you during the stay period, they can be penalized by the court.

Your Debts Might Be Discharged

Depending on the type of bankruptcy you file, some or all of your debts will be discharged. In any case, you will certainly be discharged of your unsecured debt such as car payments, credit card bills, and medical bills. You will be discharged in 90 days under Chapter 7. In addition, if you filed Chapter 13, you will be discharged when you complete the payment plan. You can discuss with your bankruptcy lawyer and file the right type accordingly.

Keep Your Home

When you declare bankruptcy, most of your assets will be liquidated to pay the creditors. In most states, the home in which you live is exempt from such liquidation process if the equity amount is within the stipulated amount. Your home may or may not be exempt from liquidation depending on the equity in it and the state you live in. To understand your options, you can discuss your case with an experienced bankruptcy attorney. They will be able to help you in keeping your home while making sure that your debts are released.

Keeping It Private

Nobody has to know that you filed for bankruptcy. If you don't inform your friends, family, or co-workers, they will not know. While bankruptcy is often related to humiliation, it can be kept private and hidden from the others. The only time someone will know about your bankruptcy is when you have to submit your credit report while applying for a credit card or a loan. Your financial matters will stay private to you and nobody has to know about them unless you want them to.

Fresh Start

Once your debt is discharged, your accounts will become clean and you can get a fresh start. This means you can apply for a credit card and a new loan. While you won't get the best interest rates in the beginning, you can rebuild your credit and lower the rates over time. Bankruptcy can stay on your credit report for 10 years, but you can start getting credit earlier than that.

While it's distressing, there are several advantages of bankruptcy, which is why many businesses file for it. Make sure you read more about it and discuss things with an expert lawyer before filing the case.

Contact O'Bryan Law Offices Today