Most people will tell you bankruptcy is a bad thing, and due to negative stereotypes, there are several advantages that never get to see the light of day. Many more are simply unaware of the long-term benefits bankruptcy has to offer. Below, we explore some of the long-term benefits bankruptcy can have for your future.
Getting Rid of Debt
One thing that bankruptcy has the ability to do, and do very well, is eliminate debt. These are long-outstanding debts that filers have no reasonable way to repay. There are several types of debts that can be discharged by bankruptcy’s different chapters, which you can learn more about here, but these are some of the most common:
- Credit card debt
- Medical bills
- Personal loans
- Past-due rent
- Debt from leases and contracts
- Retirement plan loans
- Marital debts from divorce (excluding alimony and child support)
Though certain types of debts cannot be discharged by bankruptcy, such as alimony or child support, there are still many more that can.
Saving Your Home
If you are consistently unable to make your mortgage payments, creditors and lenders will typically choose to threaten your home with foreclosure. Foreclosure is the forced sale of your home in order for creditors and lenders to receive the amount they are owed. There is one obvious problem with this, you lose your home; possibly the one place where you are able to receive comfort and security, and it is under threat of being taken from you.
Bankruptcy has the ability to halt foreclosures in their tracks. A process called “automatic stay” makes it illegal for creditors and lenders to take any collection acts against you, this includes collecting on debts involving your home. It is put into place as soon as bankruptcy papers are filed and will remain active until the bankruptcy is over, giving you the ability to work toward finishing your bankruptcy in peace. It also gives you the opportunity to repay debts through your discharge or designated payment plan. In short, bankruptcy gives you the time you need in the short-term to save your home for the long-term.
Your Garnished Wages
Another action creditors can take against you to gain the money they are owed is by garnishing your wages and/or bank funds. This is the process of creditors quite literally taking money out of your paycheck and bank accounts, outside of your control, to pay off your debts. Some people attempt to keep up with wage garnishments before they make the choice to file bankruptcy.
If you are already living paycheck to paycheck, allowing creditors to keep garnishing your wages can dig you a deeper hole than you are already in. Filing for bankruptcy sooner rather than later can not only keep your hard-earned money in your pockets and bank account, but allows you to get back on your feet quicker without running the risk of your money being taken.
Contact Our Connecticut Bankruptcy Team Today
We understand that making the decision to file for bankruptcy can be daunting and stressful. Highly stressful financial situations require a specific mode of care that our experienced team can provide in an efficient and cost-effective manner. Finding your financial freedom doesn’t have to be as hard as you may think.
If you believe bankruptcy could be your best option for financial independence, don’t hesitate to get in touch with us today through our website or give us a call at (203) 774-3332 to schedule your consultation!