Bankruptcy is often associated with negative things. After all today’s media portals display this option as a last resort to eliminate debt. But is it really that bad?
When done for the right reasons, filing for bankruptcy can be beneficial. It can work wonders in relieving anxiety over credit problems.
So, allow us to enumerate the many benefits of filing for bankruptcy. Who knows, this may be the best solution for you to free yourself from any form of debt!
Benefits of Bankruptcy
Upon getting approved for bankruptcy, you can immediately experience the following benefits:
- Discharge most, if not all, of your debts. Filing for bankruptcy frees you from your financial obligations. This means that after your bankruptcy proceedings, you can expect to be freed from most of your creditors. You are no longer legally obligated to repay your personal loans, and other credit card debts.
But remember this: You are still liable to settle non-dischargeable credit. You will still be required to pay your family support, student loans, criminal fines and certain types of taxes. Should you have secured debts and mortgages, remember that they also survive bankruptcy procedures.
- A complete halt to collection procedures. Lenders are very much eager to regain the money they have extended for credit. But as soon as you have filed and undergone bankruptcy procedures, your creditors must stop all collection activities. If a creditor continues to collect your debts, you have the legal rights to file complaints against it. Your lender may be cited for contempt or ordered to pay you damages.
- Prevention from having your utilities cut off. You may miss out on your utilities payment because of running out of cash. But your bankruptcy must prevent the utilities provider from cutting off your services. If the company has already made actions against you, they are mandated by law to restore services, as part of your declaration of bankruptcy.
- Protection from fraudulent credit reports. A bankruptcy allows you the opportunity to scrutinize your credit report. You can request for a copy of your records from any of the three credit reporting agencies. Then you can thoroughly review it to dispute false claims of creditors. Some creditors may claim that you owe them much money. But if you hold on to your credit report you can easily identify how much you really borrowed from them. This way you cannot be easily manipulated to pay more than what you really owe a creditor.
Yes, bankruptcy can provide these amazing benefits, if this option is really inevitable. So, do not think of it as something negative. Look at it as a good program that will help you eliminate your debts.
About the Author:
Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans. Copyright © 2010