Debtors who file for bankruptcy immediately enjoy some of the unique benefits offered to them under the law. Let's take a look at some of the benefits of filing bankruptcy:
- Bankruptcy will stop creditors from calling you, sending you letters and prohibit them from demanding payment from you. Even if some of your debts are not legally dischargeable under the bankruptcy law, even those creditors cannot attempt to collect from you after you file bankruptcy.
- Bankruptcy will stop creditor lawsuits. One of the scariest things about being hopelessly in debt is the threat of creditor lawsuits. Lawsuits are time consuming and scary, not to mention expensive, especially if the creditor wins the right to garnish your wages and seize your bank accounts and other assets.
- Bankruptcy will stop foreclosure. Bankruptcy continues to be one of the most effective ways that homeowners save their home from bankruptcy. Not only does bankruptcy stop mortgage lenders from continuing a foreclosure, it can even allow you to get caught up on your mortgage payments and ultimately save your home from foreclosure.
- Bankruptcy will discharge many unsecured debts such as credit cards, personal loans and medical debt. Unsecured debt is often the main reason that debtors are unable to pay on their secured debt such as mortgages and student loans. Discharging unsecured debt in bankruptcy frees up more income to pay on the things that really matter.
- Creditors cannot pursue a debtor for payment after their bankruptcy has been discharged and doing so can open the creditor to legal problems. Debtors are free to start anew after their bankruptcy is discharged and not be burdened with repaying debt that had gotten out of control.