Benefits of Filing Bankruptcy
Benefits of filing bankruptcy is usually is usually shadowed with a feeling of embarrassment and defeat on the surface. However, upon further introspection, when you file for bankruptcy, you give yourself a fresh start, put an end to creditor harassment and have an opportunity to even rebuild your credit score.
Depending on whether you file for a Chapter 7 or a Chapter 13 bankruptcy, either one will have you excited about the prospect of a clean slate. Under a Chapter 7 bankruptcy, an individual can ask the Court for a complete discharge of all unsecured debt. After paying your fees, filing your petition, attending your credit counseling and debtor education classes, and meeting with your Trustee your, the Court will release you from all debt listed on your petition. A Chapter 13 bankruptcy is one in which a payment plan is proposed to the Court. If it is approved and adhered to, at the end of the plan, all remaining balances on unsecured debt will be discharged. So, whether you file for Chapter 7 or a Chapter 13 bankruptcy, one of the benefits of filing bankruptcy is that you can look forward to a fresh start.
The constant correspondences from creditors demanding payment can be overwhelming. The benefits of filing bankruptcy under both, Chapter 7 and Chapter 13 bankruptcy codes includes the effect of the automatic stay. This means that creditors are prohibited from contacting you. Furthermore, once you file for bankruptcy, any impending law suites and judgments will be brought to a halt. If you are facing foreclosure on your home, a Chapter 13 bankruptcy might help you save your home. If a creditor persists to obtain settlement on any debt after you have began the bankruptcy process, he or she will be in violation of the law and can be sued. The same applies to a mortgage provider who proceeds with a foreclosure after being informed that you are filing bankruptcy.
After you receive your discharge, you can immediately start rebuilding your credit rating. A common way in which you can increase your credit score is by opening up a savings account at a credit union. When you have saved a substantial amount, you can apply for a loan against your savings. If you repay the loan on time and in full, it will raise your credit score.
The benefits of bankruptcy certainly outweigh the negative connotation associated with it. Not only will you enjoy a fresh start, you will also eliminate creditor harassment as well as be able to improve your credit rating.