The Three Main Benefits of Filing Bankruptcy

Written by Legal Videos on . Posted in Chapter 7 bankruptcy michigan, Chapter 7 vs chapter 13, Information on filing bankruptcy

Sterling heights bankruptcy attorneys

There are so many benefits of filing bankruptcy, it’s a wonder that more people don’t choose it. They’ve heard too many myths about it, and believe it’s the endgame of their financial lives, when in truth, it’s the beginning of a new one–a fresh start. Although bankruptcy does spoil your credit for years afterwards, there are simply too many benefits of filing bankruptcy not to consider a viable option when your back is against the wall.

To help you see why it could potentially be the solution you need, here are a few of the benefits of filing bankruptcy!

1. The Automatic Stay and the Retention of Exempted Property.

Many times, people are forced into filing for bankruptcy because they’re about to lose their car or their home. While this sounds like a bad situation, there’s a silver lining that people overlook–the fact that bankruptcy allows you to keep these items! Immediately after filing, a debtor receives what’s called an automatic stay, which puts a stop to collection efforts of creditors. Debtors can no longer get their hands on a debtor’s vehicles, some clothing, furnishings, life insurance, pets, and portions of earned wages.

2. Eligible Debt Forgiveness.

This is usually the main reason, and one of the most important benefits of filing bankruptcy. Bankruptcy dischages eligible unsecured debts, lifting the burden of debt repayment from the debtor. The way that this is done depends on the kind of bankruptcy filed.

3. A Fresh Start.

Between these two benefits of filing bankruptcy, comes a fresh start. The statutory reprieve is to afford the debtor with a discrete period of time to financially regroup and devise a way to pay back their debts. This also gives them the chance to start building their credit back up.

These are just a few of the benefits of filing bankruptcy! If you have any questions, feel free to contact your local bankruptcy attorneys, or ask in the comments! See this link for more references.

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