Bankruptcy is not something to jump into haphazardly. Chances are, if you are considering bankruptcy, you have considered every option possible to dig yourself out of debt. If you are thinking about filing for bankruptcy, you aren't alone. Last year 1,074,225 individuals and families filed for bankruptcy in the United States.
A common misconception about bankruptcy is that it is a humiliating and miserable experience. However, many who experienced it tell a different story. Here are some benefits of filing for bankruptcy under Bankruptcy Code. Read more.
1) Bankruptcy restructures debt so it is manageable
The vast majority of people who file for bankruptcy genuinely desire to pay back their debts; they are just financially unable to. Filing for bankruptcy gives debtors a monthly payment plan that is manageable according to their income. By filing for bankruptcy, it is a message to creditors to expect to receive less money in the repayment deal. Click here.
2) A third party steps in to administer the debts, taking the burden off of the debtor
Imagine life without screening your calls and mounds of menacing mail. If you have been hounded by debt collectors or collection agencies then a bankruptcy case means relief. Under law, creditors are barred from phone calls or harassment in order to collect debt. For Chapter 13 filings, debtors pay a set monthly amount to an administrator for either three or five years, based upon income and net worth. The administrator distributes payments to the various creditors, leaving you completely out of the process. Read more.
3)Lose obligation to pay debts
A bankruptcy case means a discharge of all debts, which also halts lawsuits, prevents garnishments, averts repossessions of vehicles, and stops foreclosures and IRS seizures. In a sense, whatever you were obligated to pay before filing for bankruptcy is wiped out if you follow the agreement.
4) Teaches you to budget
As a part of going through bankruptcy, a debtor must put together a list of all of their monthly expenses broken down in categories. In a sense, by law you are required to create a budget. Financial experts often cite creating a budget as the most important part of financial responsibility. By creating and sticking to this budget as you move forward, it can be greatly beneficial to your financial future.
5) A fresh start
Much of the toll of financial problems and accumulating debt is on the emotional well-being of the parties involved. By filing for bankruptcy, the slate is wiped clean. It is an opportunity to start again without all of the baggage of debt carried along. That forgiveness can bring great relief and excitement for a new direction. Know more.