Insights Into How Our Legal System Works

The Benefits Of Filing Bankruptcy

18 March 2015 by Yolanda Lane

If you have more debt than you have income, your best bet may be to file for bankruptcy. Many people struggle with debt for years out of fear of filing for bankruptcy. They have the misconception that filing for bankruptcy is the worst thing they can do for their finances. However, in many cases, filing bankruptcy can be a good choice. If you are trying to decide whether or not bankruptcy is right for your situation, then you want to learn about the benefits it has to offer.

Bankruptcy puts an end to creditor harassment

When you file for bankruptcy, it will put a stop to all contact from debt collectors trying to get payment from you on behalf of the companies you owe money to. Once you have filed for bankruptcy, the companies you owe money to will receive a notice that you have filed, and once your case is finished, they will be informed that your case was successful. This lets them know that you are no longer obligated to pay those debts. At this point, all forms of communications from these companies should stop; this includes phone calls, emails, and letters sent to you via postal mail.

There may be instances when creditors call you after your bankruptcy is granted. They may not have received the notice yet. However, if there is a creditor who continues to harass you after being well-informed of your bankruptcy, then they can be sued in court.

Bankruptcy is a clean slate

While a bankruptcy will remain on your credit report for 7 to 10 years (depending on which type of bankruptcy you file) it will be better than having a lot of negative marks on your report such as late payments, charge-offs and closed accounts. Once you are awarded your bankruptcy, you won't be haunted by all of those past debts. You will be able to begin working on establishing good credit for yourself and start raising your credit score.

You may find it difficult to be granted a credit card right after filing bankruptcy. Your best bet is to go with a secured credit card. After a few timely payments on this card, you may start receiving credit offers from other companies. Also, paying on your secured card will help you raise your credit score and start building your good credit.

If you are considering bankruptcy, you should contact a bankruptcy lawyer like Wade Bettis, J.D., Ph.D., PC. It is a complicated and detailed process, and filing for bankruptcy on your own comes with risks. A lawyer will make the process easy and ensure everything is done properly.

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