The Big And Small Benefits Of Bankruptcy
Big Benefits
One of the biggest reasons people file for bankruptcy is to stop credit collections. Wage garnishments, repossessions and foreclosures can all be stopped by filing for bankruptcy. When assets are at risk of liquidation, bankruptcy can offer a way to keep the property while working towards a debt resolution. When you file for bankruptcy an automatic stay order is issued, which prohibits creditors from pursuing further action against you. This order immediately halts all garnishment, collection, repossession or foreclosures in their tracks.
Once in bankruptcy, creditors cannot legally collect on a debt outside of any arrangement made by the court. Further, creditors must adhere to the debt relief plan that is determined by the court. Filing for bankruptcy essentially stops collections long enough for you to develop a plan and resolve your debts without the threat of losing your secured debt assets. The bankruptcy process is essentially a legal medium that moderates your interactions with creditors and helps you negotiate a debt relief plan that works for your financial situation.
Small, But Necessary
Although debt relief is the primary goal of bankruptcy, there are some intermittent benefits along the way. Even if you are filing for Chapter 13, your repayment plan will still be easier than resolving debts outside of bankruptcy. In a Chapter 13 repayment plan your debts will be repaid through a series of smaller payments spread out over a three to five year period. In many cases, the interest fees on the account will be frozen and delinquency fees may be waived. It is rare for a creditor to freeze interest or waive penalty fees outside of bankruptcy.
Another thing gained in bankruptcy is a lesson on finances. Part of the bankruptcy process requires that you participate in a credit counseling course. Although these courses are open to anyone looking to improve their money management skills, most people never take advantage of such resources unless required. The skills learned in a credit counseling course are invaluable and can teach you habits to set yourself up for a financially solid future.
The Lee Law Firm aims to help local residents resolve their debt issues and achieve a financially healthy future. Their mission is to provide high quality legal representation that to assist hard working people lower monthly debt payments, stop wage garnishment, prevent foreclosures, and stop calls from creditors. The Lee Law Firm bankruptcy attorneys have many years of experience in all aspects of Chapter 7 and Chapter 13 Bankruptcy in Dallas.
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