By declaring bankruptcy, an individual or business unable to repay their debts, can start resolving the present financial difficulties and make the necessary steps to rebuild their credit. Here are some of the benefits of bankruptcy you should know.
1. One of the main benefits of bankruptcy is that you can go through the entire process without losing any of your property. Failure to file might force your creditors to repossess any property you or your business owns.
2. Once you file for bankruptcy, an automatic stay is triggered. Therefore, it prevents your creditors from taking any necessary actions to collect their debts. As such, they can’t repossess your property, call you repeatedly, sue you or much more. Additionally, filing for bankruptcy will put a stop to any foreclosures, evictions, utility shutoffs and wage garnishments that had been initiated.
3. After filing for bankruptcy, it will remain on your credit record for at least 7 to 10 years because you can discharge many debts through this process. Therefore, you have a good chance to begin improving your credit after filing.
4. You will not be allowed to use credit cards anymore or apply for new ones once you have filed for bankruptcy. However, this is a good thing because you will learn how to live within your income and prevent any future financial issues that might come with being in too much debt.
5. Also, you can receive credit counseling after filing for bankruptcy. That means you will have the necessary education to help you through the process of rebuilding your credit and learning new financial habits effortlessly.
6. If you have filed for bankruptcy, you can discharge your obligation to repay some of your debts so the burden will not be too heavy.
If you are in financial trouble, you can always hire a bankruptcy attorney to help you through the process of filing for bankruptcy.