Top Advantages to Filing Bankruptcy

Bankruptcy isn’t always the worst case scenario people advertise it as. Sometimes it can be beneficial to file for bankruptcy. There are many advantages to clearing all your debt in one swoop. It isn’t without its disadvantages of course, but in this article we’re going to show you some of the top advantages to filing for bankruptcy.

Gain Access to a Safe Bubble

Filing for bankruptcy represents a cut-off point. Creditors can no longer take action against you. This doesn’t just include being able to sue you. It also includes being able to make any contact with you at all. At this point, you’re no longer a valid target. This extra period of time alone gives you some breathing space to get your act together and think about what you’re going to do next. It also applies to collection agencies, so creditors have to call off their collection efforts, as well.

Discharging Your Debts

Contrary to popular belief, it’s not true that you can discharge every single debt. Only some debts are able to be discharged. Speak to a legal expert to figure out which debts you can discharge and which debts you have to make do with. It will differ for each individual.

But those debts you can discharge will be history. They will still appear on your credit record, naturally, but the creditors won’t be able to reclaim any of that money.

Using Exemptions

Bankruptcy doesn’t have to lead to homelessness. There are provisions for people to protect them against this. If all your debts were unsecured, you could keep your main family home The key is whether your debts were secured against anything. If you took out a loan to fund your business and secured it against your home, you will lose your home. Again, this depends entirely on your situation and you will have to review your finances to see what was secured and what wasn’t.

There is Hope

This is often characterized as the nuclear option. Bankruptcy isn’t the nuclear option because there is a way out. Bankruptcy will stay on your record for up to ten years, but you can begin improving your credit rating as soon as bankruptcy proceedings are out of the way. You can actually have a stellar credit record before your bankruptcy is expunged from your financial record.

It Doesn’t Always Lead to a Court Appearance

You will have to appear in court once to confirm the bankruptcy and formally begin proceedings. On the other hand, this is nothing but a formality and there’s no dispute involved. The only time where you’ll have to deal with a dispute in court is if your creditors want to fight against you declaring bankruptcy. This rarely happens, however, so it’s not something you have to worry about if you’ve exhausted every other avenue.

It’s Fast

In most scenarios, bankruptcy is a fast process. It can take as little as six months to complete the bankruptcy and begin your new life all over again. This is a major advantage because trying to tough out spiraling unsecured debt can last for years, even when you know you have no hope of ever paying back the final amount.

Should You File for Bankruptcy Today?

This depends entirely on your personal situation. Before you make a move, we would recommend contacting a financial adviser first. They will be able to go over your finances in detail and decide if it’s the best move for you. There are advantages to filing for bankruptcy, but it isn’t always the best decision. An expert will help you to make that choice.

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