Benefits of a Bankruptcy Petition
Bankruptcy Isn't All Bad. Check Out Some of These Benefits.
A major benefit to filing a petition in bankruptcy is the automatic stay that prevents most collection actions by creditors against the debtor or the debtor's property. Once your chapter 7 bankruptcy or chapter 13 bankruptcy petition is filed, an "automatic stay" is issued by the bankruptcy court, (An automatic stay is an injunction that will stop potential and actual lawsuits, foreclosures, garnishments and most other collection actions with which you are struggling). This initial period of relief and automatic stay gives you a breather of sorts so that you are able to begin creating a new financial future. As long as the stay is in effect creditors may not initiate or continue lawsuits, garnish your wages, call you, harass you, or attempt to collect the debt in any way. It allows you a fresh start to your financial life and allows you to start over with a clean slate.
Of course, even when the collection agencies are pounding at your door and you can't pay your mortgage, electricity, cable, and credit card bills all in the same month, bankruptcy may still be your last option. An experienced bankruptcy attorney will go over all of your debt relief options with you and determine if filing for bankruptcy protection is the right choice for you and your family.
Filing for bankruptcy does not mean that you will lose everything or even anything. On the contrary, by filing for bankruptcy protection, you stand to gain freedom from the overwhelming debt and worry you have been experiencing every day. Filing chapter 13 or chapter 7 bankruptcy wipes your slate clear and gives you the opportunity for a fresh start. With the assistance of a dedicated bankruptcy lawyer or debt relief expert you will be able to determine what assets you will keep and how you might be assisted when moving forward to rebuild your credit.
Filing Bankruptcy has other benefits as well, such as: filing bankruptcy can prevent your utilities from being disconnected and filing for bankruptcy protection can keep your car from being repossessed. Chapter 7 and chapter 13 bankruptcy will stop a foreclosure and pending sale date giving you time to work with your creditors and stay in your home as long as possible.
While bankruptcy will allow for the discharge of a number of debts others remain non-dischargeable according to federal law. An experienced bankruptcy attorney will advise you as to which of your debts may be alleviated.
Debts That Aren't Usually Discharged Include:
- family support
- matrimonial judgments
- student loans
- certain types of taxes
- restitution and criminal fines.
Something else that is important to remember that chapter 7 bankruptcy does not relieve a co-signer from any responsibility to pay back debt. Keep in mind, the creditor has the right to enforce the co-signer's obligation to the debt. Filing Chapter 13 bankruptcy will protect a co-signer as long as the debtor complies with the bankruptcy plan. Thus, if you have a co-signer that you want to protect from collections, chapter 13 is your better bet.
