There are pros and cons of every situation, including issues that are as serious as bankruptcy. While most people understand the negative impacts of bankruptcy, few have realized the benefits that bankruptcy can sometimes provide. Though you may be required to turn over some of your assets, windfalls received, and your surplus income to repay debts, bankruptcy may sometimes be the best option.
So is filling for bankruptcy the best thing to do? Because everyone has a unique situation, this is a question that cannot be readily answered. To help you reach an informed decision, here is an overview of a few benefits that you stand to gain by filing for a bankruptcy protection:
You Can Save Your Home
Under most bankruptcy laws (every country or state has its own set of laws), your house or home is exempt from liquidation provided that your equity stake falls within a given amount. In New York, for instance, if your equity is less than $50,000(or $100, 000 for couples), your home or house will be deemed exempt. However, if you—individually or with your spouse—own more equity than the mentioned thresholds, then your home or house is subject to liquidation.
Your Debts Will Be Discharged
Chapters 7 or 13 allow debtors to be discharged of their unsecured debts such as credit cards, car payments, and medical bills. Chapter 7 allows you to be charged within ninety days while chapter 13 allows you to be discharged once the payment plan has been completed.
You Will No Longer Be Hunted By Your Creditors
If you find yourself in huge debts, calls, notifications and surprise visits from collection agents may become unbearable. One of the best perks of bankruptcy is the fact that from the instance you and your attorney file your bankruptcy petition, you become eligible for automatic stay period. This simply implies that your creditors aren’t allowed to contact you because if they do, they can be penalized by the courts.
It Accords You a Fresh Financial Start
Immediately your debt is discharged, your slate is basically wiped clean. You are allowed to apply for new credit cards and loans. Although the interest rates that you will be charged won’t be stellar immediately, you can rebuild your credit by operating under the terms given to prove that you are indeed a responsible debtor. While filling for bankruptcy will be reflected on your credit history report for a period of 10 years, you will still be eligible for credit within that time period.
Bottom Line
For people who qualify, bankruptcy is another good way of getting out of financial trouble. To establish whether bankruptcy is the right option that you should consider, it is recommended to book an appointment and discuss your situation with a reputed and licensed trustee. Alternatively, you can compare the pros and cons of all other options or strategies that you can adopt and follow. Once you understand all the options, you can make an informed decision on the best solutions that makes the most sense for you.