Bankruptcy is a legal process designed to benefit those who are struggling financially. Many Americans live within their means and spend responsibly but are still hit with unexpected life events that cause their finances to be chaotic. While bankruptcy might sound like the last thing you want to consider, there are many fantastic ways that a prepared bankruptcy with the help of an attorney can help get your finances back on track and protect your family and assets from creditors. With that in mind, here are some great reasons to file bankruptcy.
Excellent Reasons to File Bankruptcy
If you are having trouble seeing the positive aspects of filing for bankruptcy, we are here to help. Here are some of the immediate positive effects that are associated with personal bankruptcy:
- Preventing Foreclosure: With financial challenges, homeowners might face foreclosure and lose their houses despite their best efforts. Bankruptcy, specifically Chapter 13, can halt this process, providing a chance to catch up on mortgage payments and maintain home ownership. This process will give you more time to handle the payments you couldn’t get to before.
- Halting Wage Garnishment: Filing for bankruptcy immediately stops wage garnishments, ensuring that individuals can maintain their livelihood without having a significant portion of their income diverted to satisfy debt obligations.
- Eliminating Debt: Bankruptcy is a pathway to eliminating various debts, such as credit card debts, medical bills, and certain loans, offering a fresh start financially. Some debts can not be discharged through bankruptcy, but the ones that can be discharged make a significant difference in the lives of those struggling with debt – making this among the best reasons to file bankruptcy. With fewer debt payments and interest rates, you can get the debts that cannot be discharged under control.
- Preventing Utility Shut-offs: Filing for bankruptcy can help keep your utility services online, ensuring that basic needs such as electricity and water are not cut off due to past-due bills. Starting the bankruptcy process affords you these protections because it shows that you are proactively addressing your debts instead of ignoring them.
- Blocking Creditor Harassment: Bankruptcy filings put an end to the often stressful and relentless calls from creditors and collection agencies, providing much-needed peace of mind and stability during a turbulent time. Many creditors can be abusive, making a bad situation even worse. Your attorney can help ensure that your rights are respected during the bankruptcy process and that no creditors continue to hound you for their payments.
- Avoiding Vehicle Repossession: For those facing the repossession of their vehicle, filing for bankruptcy can potentially recover a repossessed car or at least consolidate past due payments to make the financial situation more manageable. Losing a vehicle can make commuting to work or maintaining family life impossible, but bankruptcy can help keep your car in your own hands.
- Reducing Medical Debt: One singular significant medical event can lead to overwhelming financial strain. Filing Chapter 7 bankruptcy can alleviate the burdens placed on you by excessive medical bills and allow you to focus on recovery rather than financial distress.
- Consolidating Student Loan Payments: Although not typically discharged in bankruptcy, filing under Chapter 13 can help manage student loan payments by incorporating them into a structured repayment plan. Due to new federal laws regarding outstanding loan payments, you may also have new options for structuring or discharging your debt.
Richard V. Ellis is a Sarasota bankruptcy attorney with decades of experience helping families overcome their financial challenges through bankruptcy. To learn more about your options and the best reasons to file bankruptcy, contact us today.
