Filing for bankruptcy can have many advantages, depending on your circumstances. Mainly, this process can:
- Stop debt collectors from calling you
- Lead to forgiveness of certain debts
- Protect some of your assets
- Involve credit counseling
- Allow you to move forward financially
Our attorneys can help you decide if this is the best way to manage your debts and ensure you get the most out of the process.
In This Article
Benefits of Filing Bankruptcy
Although going through bankruptcy is complex and involves many steps, it is sometimes a far better option than continuing down the same financial path. When you take the decision to file seriously and ensure it is the best option for your situation, you could experience the following benefits.
Putting a Halt to Collection Proceedings
If you have been bombarded by debt collection calls, filing for bankruptcy can be a relief. By law, creditors must stop trying to collect on your debts once you’ve filed, allowing you to catch your breath. Taking this step can also pause wage garnishment, foreclosure on a home mortgage, and property repossession.
Stopping these calls and other collection actions can remove some of the stress from the situation, allowing you to think far more clearly about what you should do. It will also give you time to plan and go through the bankruptcy process.
Potentially Receiving Forgiveness for Debts
When filing for Chapter 7 bankruptcy, you could see your debt wiped clean. Some of the debts that may go away after you file include:
- Credit cards
- Personal loans
- Rent owed
- Delinquent utility bills
- Doctor and hospital bills
However, do not expect to receive relief from child support payments or student loan debt. Additionally, in some cases the bankruptcy process can liquidate your qualifying assets to pay back creditors—though assets like your home and vehicle are often protected.
Protecting Some Assets from Collectors
By filing for bankruptcy, you could protect some of your assets. This means collectors will not be able to request these items as part of the financial settlement. For example, some items that can be exempt include:
- Qualified college savings accounts
- Compensation for personal injury or wrongful death
- Implements used in a trade
- Wages earned up to 60 days before the filing
- Tax-exempt retirement accounts
- Some pension benefits
Receiving Credit Counseling
When you are facing financial problems, credit counseling can be beneficial. According to the U.S. Courts, those filing for bankruptcy must receive credit counseling. Note that some states, like North Carolina, require you to receive counseling from an approved program.
You can also take debt education courses. Through these programs, you will learn how to manage your finances better in the future.
Moving Your Financial Life Forward
Although filing for bankruptcy can negatively affect your credit score initially, taking this step can help you improve your entire financial situation in the long run. The bankruptcy will stay on your credit score record for several years, but it eventually will disappear.
Additionally, filing for bankruptcy will start the clock for when you will be eligible to apply for loans again. If you choose to continue working your way out of debt on your own:
- You probably will not be able to obtain loans.
- You may continue to face this situation for far longer than if you file for bankruptcy now.
For a legal consultation, call 828.286.3866
Receiving Legal Advice When Filing Bankruptcy
Having an attorney’s help can be invaluable when preparing to file for bankruptcy. Our team can:
- Review your situation and explain your options, including possible alternatives to bankruptcy
- Take the time to learn about what you want to achieve from these proceedings
- Explain the pros and cons of each bankruptcy chapter
- Recommendation on the best path forward based on your situation, including which chapter to choose, if applicable
- Compile your financial documents for the filing process
- Identify your dischargeable and non-dischargeable debts, as well as your protected assets
- Prepare you for hearings and meetings so you know what to expect and what your responsibilities are
- Serve as your representatives and advocates every step of the way
What we may find after studying your case is that the benefits of filing for bankruptcy fit perfectly with the financial situation you face. If so, we will provide support and guidance as you go through the process.
Our Team Is Ready to Help You Work Through Your Bankruptcy Proceedings
At Farmer & Morris Law, PLLC, we handle multiple types of bankruptcy filings, including Chapters 7, 11, 12, and 13. If you choose our firm, we will work hard to help you achieve the outcome you are seeking so you can benefit from the advantages of filing for bankruptcy.
Call our team of bankruptcy attorneys today for a free case review at (828) 286-3866.