5 Things Bankruptcy Can Do for You

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5 Things Bankruptcy Can Do for You

Though it’s sometimes portrayed as the darkest of all dark financial fates, bankruptcy is a vital part of the capitalist system and was built into our code of law for a reason. It’s a valid way to handle a debt problem that’s gotten out of control.

Filing for bankruptcy is a big decision. But if you’re drowning in bills you can’t pay it could be the best decision you ever made. Here are five ways bankruptcy can improve your life.

#1) Wipes out debt.

This is the big one, and it is big. The average credit card debt in America is $5700. Even insured individuals face staggering levels of medical debt. Most people can’t even come up with so much as $400 in an emergency, a problem exacerbated by a tough economy.

For some, the only way to win is to stop playing, to wipe out every eligible debt. While it’s easy to get credit after bankruptcy, some might be better off enjoying a life without payments. And in the case of massive debts beyond your control, hitting the reset button can be the only way to get your life back.

See also: Do You Have to Be Behind on Your Bills to File For Bankruptcy?

#2) Stops creditor harassment.

Some creditors call two, three, even four times a day. Many get downright nasty over the phone. They hound you for money you can’t afford to pay, and they have a knack for making you feel like an utter failure. And while many creditor tactics are illegal, they can all be downright stressful for people on the receiving end.

Financial stress can have a significant impact on mental health. There is no more tangible sign of financial stress than a slew of communication from debt collectors. From the moment you file for bankruptcy the pressure is off, giving you the time you need to heal and the mental bandwidth you may need to reorganize your financial life.

See also: What Philadelphia Residents Should Know About the FDCPA.

#3) Stops lawsuits.

If you owe too much on some debts you may find yourself facing a creditor lawsuit. While Pennsylvania is one of the safer states to face one of these lawsuits they’re still a massive problem and a major source of stress.

Bankruptcy’s automatic stay brings any outstanding lawsuits to a screaming halt, and may result in them being dropped altogether.

See also: What You Need to Know About Being Sued For Debts in Philadelphia.

#4) Stops repos and foreclosures.

Chapter 13 bankruptcy offers an avenue for you to keep both your home and your car if it makes financial sense for you to do so.

It’s one of the easiest ways to buy time for loan modifications, sales, and other measures which you may want to take to keep a foreclosure off your credit, which often does far more damage than a bankruptcy could. It’s offers an avenue for wiping out deficiency balances as well.

See also: Modifying Your Home Loan While in Bankruptcy.

#5) Raises your credit score.

Your credit score is likely to shoot up directly after your bankruptcy discharge. The impact of shedding all that debt is immediate and positive. There are a host of reasons for this, but it boils down to having a clean slate to work with. It creates light at the end of your financial tunnel you might not enjoy otherwise.

See also: Why Bankruptcy Increases Your Credit Score.

If you think bankruptcy might be right for you, contact us. A free consultation will tell you everything you need to know about what this legal move can do for you, personally. Contact us today to get started.

 

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