Bankruptcy definitely has a bad rap in our country, but it should not. It is the perfect solution for many consumers, providing them the one and only opportunity they have to lighten their heavy financial burdens which they might otherwise suffocate under. Here is a list of potential benefits to filing for bankruptcy.
1. Chapter 7 bankruptcy provides for the discharge of most, if not all, of your debts. Meaning you will no longer be legally obligated to pay those debts. Chapter 13 bankruptcy allows you to get the breathing room you need to make reasonable monthly payments on your debts while still having enough money for basic living expenses, and still provides advantages.
2. Bankruptcy keeps your property from being repossessed, and in some cases it may even force creditors to return property that was repossessed.
3. Bankruptcy stops the collection process–which means no more harassing phone calls from your creditors!
4. Bankruptcy prevents the utility companies from shutting off your utilities, or if they have already been cut off, requires the utility company to restore service.
5. Bankruptcy can stop or prevent wage garnishment .
6. It stops the foreclosure process and provides you valuable time to catch up on payments. This means you will not automatically lose your home.
7. Bankruptcy gives you the opportunity to dispute false claims from creditors who may be trying to defraud you and/or the bankruptcy court.
Keep in mind that not all debts are dischargeable under the Bankruptcy Code. Examples of non-dischargeable debts include family support, student loans, certain types of taxes, and criminal fines. Liens, mortgages, and other secured debts will also survive bankruptcy since they are secured by some sort of collateral or by the federal government. It is also important to remember that Chapter 7 bankruptcy does not relieve a co-signer from his or her responsibilities under the loan. The creditor has the right to enforce the co-signer’s obligation. Chapter 13 bankruptcy, on the other hand, will protect a co-signer so long as the debtor complies with his or her bankruptcy plan.
Those seriously considering filing for bankruptcy protection should consult with a reputable, experienced bankruptcy lawyer. He or she will have the expertise to explain all your options to you and help you decide which step is best for you to take.