What Are the Benefits of Bankruptcy?
By Michele G
There is no denying the fact that filing for bankruptcy is a big step, and one seemingly in the wrong direction. After all, you promised to repay your debtors, and the bankruptcy is a breach of that promise. Sometimes, it so happens that financial issues get out of control for various reasons, and bankruptcy is the only viable solution to regain control.
Bankruptcy is a legal "out" that is there for those who are in serious need of it. Many people come out of it wondering why they waited so long to file. Indeed, the stigma of becoming insolvent is very strong, preventing many from filing until long after the point of no return.
So, is there anything positive that can come from filing? Absolutely. Getting the petition filed with the local federal court starts what is known as the automatic stay. This stay prevents creditors from contacting you. In fact, you can contact the creditors with your bankruptcy file number and request that they honor the stay. Any violations of the stay have the potential to cost the creditor money in your favor, so be sure to document any creditors who violate the stay. What's best of all is the fact that the phone is now quiet, restoring your sanity.
Your credit rating drops immediately after filing, but even then, you can start building it up almost immediately after the discharge is entered. There are companies that offer credit cards post-bankruptcy, albeit with low limits, but they will report to the credit bureaus, increasing your credit rating as you charge and pay. Some feel that a Chapter 13 is less damaging to credit, as there is some repayment of the debt over a period of time. Just remember the lessons that were learned about handling money during the bankruptcy, and you'll be good going forward.
The best part of filing for bankruptcy is how much money it frees up. You find that all of the money you were once chasing down debt with is now available to you. Now you can fund your retirement, make investments, or simply save money for a rainy day.
Bankruptcy really is a fresh start, both in finances and life. It's as if you shed all of your burdens and stress to become a new and improved person. You'll wonder why you had so much trepidation to file to begin with.
Bankruptcy Frequently Asked Questions
How can I avoid bankrupcy?
What Is the Most Important Factor in Selecting Bankruptcy Lawyers?
What Should It Cost to Consult a Bankruptcy Lawyer?
I Live in New Jersey. Should I Select New Jersey Bankruptcy Lawyers or New York Bankruptcy Lawyers?
What Should It Cost to Use Bankruptcy Lawyers?
What Other Services Might Bankruptcy Lawyers Provide?
Can Personal Bankruptcy Lawyers Help Me Keep Some Assets?
What Tactics Are Collectors Legally Prohibited From Using?
If I Am a Victim of Creditor Harassment, What Can I Do?
Can a Collector Use E-mail or Faxes to Harass Me?
What Should One Say in a Cease and Desist Letter?
How Do I Know If I'm Being Illegally Harassed?
What Is the Easiest Way to Access Bankruptcy Records?
Is There a Source of Accessing Public Bankruptcy Records by State?
Are My Bankruptcy Records Available to the Public?
Can Recent Bankruptcy Filings Be Accessed Online?
How Long Do Bankruptcy Records Remain on Someoneís Credit File?
What Information Do I Need to Do a Bankruptcy Record Search?
If I Own a Home, Are There Alternatives to Bankruptcy?
Are There Alternatives to Bankruptcy If I Don't Own a Home?
Why Would a Credit Card Company Agree to Lower Payments Or a Settlement?
Why Would a Mortgage Lender Agree to Reduced Monthly Payments?
Should I Use a Debt Reduction or Debt Consolidation Firm As an Alternative to Bankruptcy?
Should I Use an Attorney to Negotiate a Debt Reduction Plan As an Alternative to Bankruptcy?
Should I Use a Non-Profit Debt Counseling Firm?
Are There Other Alternatives to Bankruptcy?
What Is Federal Bankruptcy Court?
What Bankruptcy Court Information Should I Know?
Is the Same Court Used for Chapter 7 and Chapter 13 Bankruptcy?
Does the Recent Change in the Bankruptcy Law Affect the Federal Bankruptcy Court?
What Is a Bankruptcy?
What Bankruptcy Information Do I Need to Know?
Can I Get Good Information From a Bankruptcy Blog?
What Are Some Frequently Asked Questions About Bankruptcy?
What Are Bankruptcy Exemptions?
What Is Some Bankruptcy Terminology I Should Know?
What Are The Types of Bankruptcy?
What Is a Discharge in Bankruptcy?
Is There Recent Bankruptcy News of Which I Should Be Aware?
What Is Chapter 11 Bankruptcy?
Who Can File a Chapter 11 Bankruptcy?
What Is an Involuntary Bankruptcy?
How Does Chapter 11 Bankruptcy Differ From Chapter 7 or 13 Bankruptcy?
Do Recent Law Changes Affect Corporate Bankruptcy, Too?
What Is a Chapter 13 Bankruptcy?
How to file a Chapter 13 bankruptcy?
What Should I Do If I Live in Detroit and Want to File a Chapter 13?
What Should I Do If I Live in Michigan and Want to File a Chapter 13 Bankruptcy?
I Live in Oregon. What Are My Exemptions?
What Is a Chapter 13 Bankruptcy Discharge?
When Must My Creditors Stop Their Collection Activity?
Who Can File for a Chapter 13 Bankruptcy?
What Is a Chapter 7 Bankruptcy?
How Does One File for a Chapter 7 Bankruptcy?
Can I Get Information on Milwaukee Bankruptcy Lawyers?
Can I Get Information on Wisconsin Bankruptcy Lawyers?
Can I Get Information on Pennsylvania Bankruptcy Lawyers?
What is a Chapter 7 Bankruptcy Discharge?
What Are Chapter 7 Bankruptcy Exceptions?
What Are Chapter 7 Bankruptcy Trustees?
Is There a Credit Life After Bankruptcy?
How Do I Build Credit After Bankruptcy?
What Is the Possibility of Buying a Home After Bankruptcy?
Can I Get a Car Loan After Bankruptcy?
Can I Get a Mortgage After Bankruptcy?
What About Renting After Bankruptcy?
How Do I Establish Bank Accounts After Bankruptcy?
What Is an After Bankruptcy Credit Card?
What Happens to My Credit Score After Bankruptcy?
What Type of Loans After Bankruptcy Are Available?
How Will Illinois Bankruptcy Lawyers Help Me?
How Will Chicago Bankruptcy Lawyers Help Me?
How Will Texas Bankruptcy Lawyers Help Me?
How Will Washington Bankruptcy Lawyers Help Me?
Can I File Bankruptcy Online?
How Do I File for Bankruptcy?
What Property Exemptions Do I Have in California?
I Live In Colorado and Have a Partner in Real Estate Who Wants to Declare Bankruptcy. What Can I Do?
I Live Near Denver. Where Do I File For Bankruptcy?
How Do I File For Bankruptcy in Florida As I Own a Home?
I Am Totallly Confused About Los Angeles Bankruptcy Exemptions. What Should I Do?
I Live in Miami and Need to File for Bankruptcy. What Should I Do?
If I Have Lots of Old Debts and Live in the Bay Area of CA, What Should I Do?
What Are the Basic Personal Bankruptcy Laws?
What Are the Recent Bankruptcy Law Changes Iíve Heard About?
What Is Bankruptcy Law Reform and How Does It Affect Me?
What Are the Benefits of Bankruptcy?
Can I Save My Home by Declaring Bankruptcy?
Can I Keep My Car If I Claim Bankruptcy?
Can I Declare Bankruptcy to Eliminate Medical Bills?
Can I File Bankruptcy If I Lose My Job?
Will Collection Activity Stop If I Declare Bankruptcy?
Can I File Bankruptcy to Help With My Student Loans?
What Will Happen to Child Support Payments If My Ex-spouse Declares Bankruptcy?
Are Property Settlement Items Dischargeable in a Bankruptcy After Divorce?
What Debts Cannot Be Discharged in a Divorce Bankruptcy?
How Can I Protect Myself in a Divorce If My Spouse Owes Debts and Might Declare Bankruptcy?
How Does the Court Decide What Is Support and What is Property Settlement in a Divorce and Bankruptcy Situation?
I Think My Ex-spouse Might Declare Bankruptcy After Divorce. Is There Any Way to Protect My Support and Alimony Payments?
Is there anything good that can come from filing bankruptcy?
My mortgage is three months behind. Do I have to file bankruptcy?
Which bankruptcy filing is right for me?