If you have had a great deal of difficulty in keeping up with paying bills and unavoidable debt, you may have wondered if filing for bankruptcy would be a better choice than struggling every month. Many people try to avoid bankruptcy because of the reputation they will have to creditors and banks, making it difficult to obtain loans as a result. This mindset, however, is short-term and there are actually benefits you could reap from filing for bankruptcy. Here are some of the positive points you can enjoy from the process.
When you file for bankruptcy, automatic stay is put in place so that creditors can no longer try contacting you about your outstanding debt. There will be no more harassing phone calls or letters in the mail, as your bankruptcy will take care of the debt you have incurred. It is against the law for these creditors to continue to contact you when a bankruptcy claim has been made, and if you continue to be bothered, your bankruptcy attorney will be able to file complaints against the creditors in your behalf.
Creditors that are trying to obtain debt will not be able to garnish wages or use tactics such as foreclosure or repossession in order to get money you owe them. Automatic stay will prevent them from taking legal action against you and you will be covered the entire time you are waiting for the result of your bankruptcy case to be resolved.
When you file for bankruptcy, there are exemptions in place that will cover you so that you will not lose your property while waiting for a settlement. There are two types of exemptions you can use when filing for bankruptcy: state exemptions or federal exemptions. Each will cover property differently and you can only file for one or the other. State exemptions vary depending on which state you live in, so you will need to ask your lawyer which would be in your best interest depending on the property you are trying to keep.
Although bankruptcy will make a mark against you on your credit reports for seven to ten years, Many people find that they are able to totally switch their credit reputation around after filing. After the bankruptcy is no longer reported, you may find your credit is positive and that there are many opportunities for improving it even further. For assistance, talk to a professional like Sever Law Office.