Bankruptcy is designed to provide relief to those individuals or business owners who cannot pay their debts to solve their financial problems. Filing for bankruptcy opens a new door to eliminate debt and get a fresh start. It can help individuals to start rebuilding their credit and solve financial difficulties.
However, it is essential to be aware of the advantages and discuss them with a bankruptcy lawyer in Katy. Declaring bankruptcy is not always an easy decision, and some people think there might not be any advantages to it. However, sometimes it can do more good than harm!
Benefits that bankruptcy can provide
- Bankruptcy will bring about an “automatic stay,” which will stop creditors from taking action to collect their debts and stop creditors from taking back your properties like cars or personal property. It also prevents them from calling or suing you.
- Declaring bankruptcy can stop taking legal action against you. It prevents any legal claim from creditors made against you, for example, wage garnishment. It also blocks the creditors from continuing collection activities, including attempts to gain money judgment in a lawsuit.
- Bankruptcy can eliminate your burden to pay the debts. It will wipe out most debts, including medical bills, personal loans, or credit card bills. Once you are discharged, you will no longer have to pay your unsecured consumer debts.
- Bankruptcy will put an end to interest payments. You will no longer have interest added to your debt or be responsible for paying off this interest.
- Your credit will improve after bankruptcy. Your debt to income ratio will increase and can determine your creditworthiness. Also, you will get more credit card offers right after filing bankruptcy. It will increase your credit score and give you access to a safety net that comes with credit cards in case of an emergency.
- Your missed monthly payments and other negative remarks will no longer decrease your credit score. You will get a chance to rebuild and increase your credit score after your bankruptcy discharge.
- You will get to keep all of your stuff. 95% of all bankrupt individuals keep all of their belongings. It is because the law protects certain properties – known as exempt property – from creditors. Be it your watch, television, social security check, or the kitchen table. If an exemption protects it, you will get to keep it.
- You will get access to financial counseling, which will give you access to tools to balance your debt better and manage your life.
There are many factors that you need to consider while filing for bankruptcy. Your decision solely depends on your situation and the goals that reflect your financial future.