Advantages To File For Bankruptcy

Advantages to Filing For Bankruptcy

While the term “bankruptcy” can carry a bit of a negative connotation, there are circumstances where bankruptcy is the best option to keep you financially afloat. Filing for bankruptcy can give you the chance to start fresh, alleviate crippling stress and allow you to rebuild your credit, restarting your finances. It’s time we break down the stigma that comes with the idea of bankruptcy. In this article, we address the advantages of filing for bankruptcy.

When you file bankruptcy, it is saying you cannot afford to pay outstanding debt to your creditors. If you are approved for bankruptcy, you will be relieved of the obligation to repay some or all of your debt. Perhaps the biggest advantage of filing bankruptcy is that you financially get to start over again. In some cases of bankruptcy, you may be able to keep your assets while being cleared of your debt.

Protecting You Against Creditors

We know how ruthless creditors can be. Creditors can call on a regular basis and possibly to a harassing degree. When you successfully file for bankruptcy, it will put an automatic stay on your account that prevents creditors from forcefully collecting debts. Along this line, creditors cannot:

  • Continue calling you
  • Sue you
  • Send you letters
  • Repossess exempt property that you owed on

Additionally, bankruptcy forbids creditors from shutting off your utilities, evicting you, foreclosing your property or garnishing your wages. Depending on whether you file Chapter 7 or 13 bankruptcy, and the applicable bankruptcy exemptions, you may keep most of your property through the process.

Debt Forgiveness

Bankruptcy typically deals with two kinds of debt; dischargeable and nondischargeable. When you file, you can protect your property and may be relieved of any obligations to pay on dischargeable debt. This type of debt follows anything that is unsecured debt. Unsecured debt is when there isn’t any collateral on what you owe. This can be credit card debt, medical debt, personal loans, etc.

When you do not have enough assets that are not exempt or you do not have enough income to pay your creditors, you most likely will be able to file a Chapter 7 bankruptcy.  This means that unsecured debt can be forgiven. If you have too much property that is not exempt or your income is such that you are able to at least pay for some of your debt, you may need to file a Chapter 13 bankruptcy.  If you file for Chapter 13, you will go through a 3-5 year payment plan to pay back some or all of your unsecured debt.  After you complete this plan, whatever amount of unsecured and dischargeable debt that remains will be discharged, and you will be debt-free.

Protecting Yourself and Your Family

A lot of the time, debt collectors can bring tremendous amounts of stress on debtors. Living paycheck to paycheck and having only enough for the essentials can lead debtors to believe there’s no way out. It can be discouraging when you’re thrown into an endless cycle of debt where your credit card balances keeps rising. This is when filing bankruptcy might make more sense than continuing to try to fight through it.

Along with clearing you of your debts, bankruptcy filing requires a debtor to take credit counseling to take all the measures possible to avoid future bankruptcy. Becoming literate in your finances can help strengthen and rebuild your credit.

There are a number of advantages to filing for bankruptcy, but the best way to start is to discuss your options with one of the bankruptcy attorneys at Cravens & Noll, P.C. We will review your financial profile and assess whether this is the right option. Our goal is to help our clients get back on their feet as soon as possible, so we will provide professional legal advice on your best options moving forward.

We know this is a sensitive issue for many people, and we are here to help. Contact Cravens & Noll P.C. today to learn more.

Cravens Noll

Cravens and Noll, an experienced Virginia law firm, takes great pride in the trust our clients place in our counsel. In a time of crisis, experienced trial attorneys can provide the solutions needed, at a reasonable price. Providing quality legal representation, our law firm will develop a comprehensive strategy based on your unique financial situation. Before taking a case, Cravens and Noll lawyers provide free consultations for clients, we will never give you false expectations about the potential outcome of your case. You can count on a realistic assessment of your case, in order for you to make a sound decision.

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