People often associate bankruptcy with the ability to wipe out or eliminate debt to gain a fresh start. Yet, the filing process has other advantages such as property protection, which can make things easier for debtors while getting finances back in order. Bankruptcy can stop creditor harassment and ease the stress associated with overwhelming debt. In helping understand how the process helps improve financial situations the following 4 points highlight benefits you can obtain from filing.
- Most debts qualify for discharge – Unsecured debts are eligible to be wipe away; meaning a debtor will no longer be obligated to pay the debt. In many cases, debt can be eliminated in a matter of months with a Chapter 7 filing. Certain debts may qualify for discharge at the end of Chapter 13. Although certain debts may not qualify for a discharge, those that do may help you handle other financial obligations more efficiently.
- Legal protection of assets including income and property from creditors – The filing helps protect assets through state and federal exemptions. Many who have filed have been able to keep their home, vehicle, jewelry and other personal property of value.
- Options for handling secured debts – Outstanding loans with secured creditors may be modified or eliminated depending on circumstances. Chapter 13 is a repayment plan that may help you retain your vehicle or home if you’ve fallen behind on payments.
- Instant protection from creditors through the automatic stay – When you file the stay goes into effect which prohibits further collection attempts from creditors such as garnishments, repossessions, eviction and utility shut offs.