There are many questions that consumers face when deciding whether or not to file for Bankruptcy. Most consumers are distraught because they mistakenly believe all the bad things they have heard about filing for Bankruptcy. It is important that consumers take time to educate themselves on the advantages of filing Bankruptcy. Aside from the fact that Bankruptcy can wipe out debt, there are many other advantages.
Outlined below are some of the advantages of Bankruptcy that should be considered in the decision-making process.
Physical and Mental Stress Relief
The advantage of filing bankruptcy allows consumers to “Start Fresh.” Many times when people are considering bankruptcy, they have usually come to a place where they just can’t pay their bills anymore. Most are stressed, tired and living paycheck to paycheck and can’t meet their monthly bills. This can take a toll on someone, not just mentally but physically. Filing for Bankruptcy can stop any sleepless nights and anxiety and help take away any physical and mental stress caused by creditors.
The Automatic Stay
Another advantage to file Bankruptcy is creditors will have to cease all contact. Many individuals filing for bankruptcy are overwhelmed by creditors contacting them. When filing for bankruptcy the Automatic Stay becomes effective. The Automatic stay requires creditors by law to cease any debt collecting practices. This means that creditors are no longer allowed to call, send letters, leave messages, garnish or levy you. If creditors fail to abide by the Automatic Stay they can be found in violation and ordered to pay fines.
A Fresh Start
Another advantage of Filing Bankruptcy allows consumers to get a fresh financial start. If you can’t pay your bills and can’t meet your minimum monthly expenses then there really is no way out then filing bankruptcy. There is no reason to keep going into more debt.
Credit Score Increases
Many times consumers are under the misguided impression that their credit scores will be ruined forever if they file bankruptcy. However, this is far from true. Many times after Bankruptcy many credit scores go up. Credit reports take into consideration that you no longer have any debt. Further, carrying around debt can cause years of bad credit. After filing for Bankruptcy credit scores can go back up to almost a perfect score within two years of filing Bankruptcy.
Keep Property
Many times consumers who are facing foreclosure or are behind on mortgage payments need a way for them to catch up. Filing for Bankruptcy stops the sale of any foreclosure. Further, while in Bankruptcy consumers have the option to do Loss Mitigation. Loss Mitigation is a loan modification process through the Bankruptcy Court. The benefit of doing a loan modification through the Bankruptcy Court allows a Judge to oversee the entire process ensuring, the Banks are complying with the rules and not misleading any individual.
IRS Debt
Bankruptcy sometimes allows debt from the IRS to be discharged. In a Chapter 7 Bankruptcy in order for debt from the IRS to be discharged, there are certain requirements. One of those being that the debt must be three years or older.
Wage Garnishment / Bank Levy
As mentioned previously when filing for Bankruptcy creditors are ordered to abide by the Automatic Stay. This means that creditors are no longer able to garnish pay or seize bank accounts. Many of these debts can also be erased through the Bankruptcy process. It is important to speak to an attorney to see which debts can be included in the Bankruptcy process.
If you are considering filing bankruptcy and have more questions regarding the advantages of filing bankruptcy, then talking to an experienced New York or New Jersey bankruptcy lawyer is important. Call Karra L. Kingston Esq. to get a Free Consultation
To Learn More About Filing Bankruptcy See Below:
Bankruptcy Basics
Should I Hire a Bankruptcy lawyer
How Much Does Filing Bankruptcy Cost
Is Filing Bankruptcy Bad?
How Can I Stop a Wage Garnishment?
Chapter 7 Bankruptcy
Chapter 13 bankruptcy