What are the Advantages of Filing for Bankruptcy?

Filing for bankruptcy is a significant decision that will have lasting consequences on your financial life. Before you decide to file for a  Chapter 7 or Chapter 13 bankruptcy, it is wise to consider all of the advantages and disadvantages of filing for bankruptcy. One of the best ways you can evaluate whether you should file for bankruptcy is to discuss your case with an experienced bankruptcy lawyer. We will discuss some of the key benefits of filing for bankruptcy below.

Getting a Fresh Financial Start

When you file for bankruptcy, the bankruptcy court will stop your creditors from harassing you to collect debts. After you file a bankruptcy petition, the bankruptcy court will issue an automatic stay that will prevent creditors from trying to collect your debt. The purpose of an automatic stay is to afford you time so you can regroup financially and repay your debts. You can begin rebuilding credit and start over financially.

Discharge Eligible Debts

Another crucial advantage of filing for bankruptcy involves the discharge of your eligible debts. This is why most people file for bankruptcy. After you file for a Chapter 7 bankruptcy, you will be released from the requirement to repay any unpaid debts. The bankruptcy trustee overseeing your case will sell your qualifying assets and distribute the proceeds to your creditors through a liquidation process. In Chapter 13 Bankruptcy, you will make monthly payments for three to five years. Once the bankruptcy process is complete, your eligible debts will be discharged.

Help With Home Mortgages

If you are behind in making mortgage payments, you can give yourself some extra time to live in your home by filing for bankruptcy. Even though a Chapter 7 bankruptcy wants to raise your mortgage, it can give you more time to restructure your finances. Filing for bankruptcy can give you the time you need to discuss your case with an experienced lawyer who will help you develop a strategy focused on your goals and needs.

Keeping Your Exempted Property

Many people are understandably concerned that they will lose all of their property, including their home and vehicle, if they file for bankruptcy. However, under federal bankruptcy law, debtors are allowed to keep certain types of property. Several different categories of property will be protected from creditors once the debtor files for bankruptcy. Typically, motor vehicles up to a certain value, household furnishings, some clothing, life insurance, pets, family bibles, and portions of earned wages are exempted from the bankruptcy process.

Contact a San Diego Bankruptcy Lawyer Today

Facing financial difficulties can be frightening and frustrating. However, you can start the process of getting out of debt once and for all by filing for bankruptcy. Contact Bankruptcy Law Center today to schedule your free initial consultation to discuss your case with one of our San Diego bankruptcy lawyers.