Why is declaring bankruptcy a better choice when piled under debts?

If you have been fighting to stand tall again beating all your personal debt and financial crisis, but are unsure if you have any other choice remaining, filing for bankruptcy might be an ideal decision for you. Bankruptcy might sound frightening, but it can really be a boon, when you are under a mountain of debt and have no other alternative way out.

Here are a few reasons why you must file for bankruptcy

It helps prevents repossession, foreclosure, and utility shutoffs

When you are to file for bankruptcy under chapter 7 or maybe chapter 13, the bankruptcy court will sanction an automatic stay that almost ends all forms of debt collection efforts, including auto repossession, mortgage foreclosure, and other forms of property repossession. You could also take additional relief, plus time from the debt collection sufferings in order to be current with your utility payments, mortgage and any other remaining debts. You could also convert your car payments into a repayment plan, while protecting it from repossession.

Clear your debt

Chapter 7 bankruptcy helps eliminate, but limited debts. Chapter 7 might as well help discharge eligible unsecured debts. You will either be completely debt free or with manageable amount of debt. Likewise, Chapter 13 bankruptcy offers repayment option, which lingers over 3-5 years.

Stop wage garnishment and various other aggressive collection efforts

While you file bankruptcy, debt collection efforts should stop. Eligible debts are to be eliminated (chapter 7) or restructured or reorganized and incorporated in repayment plan (chapter 13). Bank account levies and wage garnishment are to be stopped, and cut-throat debt collectors are no longer to be able to call or send any collection letters. The collection process will stop and also ensure you the peace of mind you have always deserved.

Fix your credit score

Declaring bankruptcy might affect your credit score for a short term, but that’s not going to last longer. However, most debtors who choose to file for bankruptcy have been suffering already with low credit scores for a time being. Declaring bankruptcy pushes you on the track of restructuring your credit. You could begin to improve your credit score from day one after you have obtained your discharge or commencing your repayment period. Certain creditors find their find their score improve in true sense after they have filed as they take advantage of the vastly improved debt-to-income ratio. After 7 years or so, the bankruptcy will be gone from your credit score and you will again be eligible to apply for a fresh loan.

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Created on Jun 8th 2022 02:31. Viewed 169 times.

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