Although bankruptcy is not necessarily the right option for everyone in debt, it has a number of benefits. Before you make up your mind about filing for bankruptcy, consider these perks.
Creditors Will Stop Contacting You
As soon as you file for bankruptcy, your creditors are notified. An automatic stay is issued, which means they can no longer pursue collections activity while the bankruptcy court is hearing the case.
You May Not Have to Liquidate Your Assets
If you file for a Chapter 13 bankruptcy, you are not required to sell any of your assets to pay your debt. If you own only exempt assets, like a primary residence and a single vehicle, you won’t be required to liquidate those no matter which type of bankruptcy you file.
You May Not Have to Repay Your Debt
If you have filed for a Chapter 7 bankruptcy and your debts are unsecured and dischargeable, filing may leave you with a completely clean financial slate and no debt to pay back.
Unsecured debts include credit card debt, personal loans, and medical debt, among others. Some debts aren’t dischargeable, however, like student loan debt and other types of secured debt. These debts will still need to be paid back after your bankruptcy case is complete.
However, filing for bankruptcy can buy you a significant amount of time before you have to start repaying secured debts again, and if you are no longer paying other debts, it may be easier for you to meet your remaining financial obligations.
Your Credit Score Will Improve
Although your credit score will initially take a hit when you file for bankruptcy, getting old debt off your credit report can help your score rise. If you have multiple creditors that are each reporting to the three major credit bureaus that you are in debt, this can be harder on your score than a single bankruptcy case.
An attorney can evaluate your individual circumstances and make a recommendation on how filing can potentially boost your credit score in the long term.
Contact an Experienced Bankruptcy Lawyer Today for More Information
If you’re struggling to pay down your debt and don’t have the money to meet your financial obligations, you’re not alone. Get the legal help you need from an experienced bankruptcy attorney to resolve your debts and start fresh on a clean financial slate. Call Sims Bankruptcy Law, PLLC today for a consultation at 469-751-7467 (DFW) or 254-304-7161 (Central Texas).