Are there any Benefits to Bankruptcy?

Bankruptcy is a manner of settling the liabilities of persons or organizations that find themselves unable to meet their debt obligations. While there are obviously many drawbacks to bankruptcy, such a filing can lead to numerous advantages from both a financial and personal perspective.

Get Creditors Off Your Back

Debt can be stressful. Creditors don't have much sympathy for their debtors and can exert intense pressure on you to make your payments. Bankruptcy courts appoint an administrator to handle your claim and serve as liaison between you and your creditors. This serves as an enormous buffer to ease the harshest aspects of debt collection. No more harassing phone calls and letters. No more intimidation. Just an equitable resolution to your debt obligations, keeping you interests in mind. Bankruptcy can relieve you of the stress and anguish of having to pay your debts and free you to begin pursuing financial health once again.

Discharge Debt

The objective of a bankruptcy proceeding is to distribute the bankrupt party's assets equitably among creditors. To achieve this goal, courts will typically discharge a portion of the debt.

• Once debt has been discharged or written off, creditors can no longer pursue that debt. Ever.
• Depending on the debtor's credit history and the cooperation of the creditors, the court may also re-structure the debt and revise payment schedules so that the debtor may be able to continue to make payments without significantly damaging their credit score.
• Other debts may be brought current, extinguishing any accrued late fees or other penalties. Regardless of form, bankruptcy is meant to settle your debts for less than you actually owe.

Get a Fresh Start

Bankruptcy obviously has its drawbacks, but it allows you the opportunity to start anew. You can get out from under a mountain of debt and still have access to credit, albeit at higher rates and lower limits. After 7 years, a bankruptcy is removed from your credit report and you regain full access to credit. Immediately, you are free you to begin pursuing financial health once again and this time armed with the personal finance knowledge gleaned from the bankruptcy process.

Should You Get Legal Help?

Bankruptcy is a complicated process. You will want an experienced attorney who is familiar with bankruptcy proceedings to advocate on your behalf, instead of simply relying on the courts to protect your interests.

• If you need help with filing bankruptcy, click here for a Free Case Review with a Bankruptcy Lawyer near you. The content of this website is provided for informational purposes only, and nothing here should be taken as legal advice.