Filing for Bankruptcy: What are The Benefits?
Bankruptcy is a word no one ever likes to hear. Especially when it relates to their own or their company’s finances. Bankruptcy means that debts have continued to pile up so heavily that you are unable to keep up with the payments. The reasons it gets to this point can be numerous, but we will not dive into those at this moment. Instead, let’s look at how filing bankruptcy can actually have some benefits.
Filing for bankruptcy generates something called an “automatic stay.” Simply put, this means that creditors can no longer take action in collecting debts from you. They can no longer call or mail you in attempts to collect these debts. In addition, this stay prevents them from suing you or repossessing vehicles or other personal property. In other words, filing for bankruptcy provides a reprieve from the hellacious pressure of creditors and collection agencies.
What Types of Debts Does Bankruptcy Discharge?
Of course, one of the largest benefits of filing for bankruptcy is that it discharges many debts. Types of debts that bankruptcy discharges include credit card debt, payday loans, medical bills, and deficiency judgments regarding foreclosures or repossessions. In addition, utility and phone bills from companies you are no longer involved with will also be discharged.
There are some types of debt that bankruptcy will not discharge, such as student loans and tax debt, although bankruptcy can help to reduce tax debt owed to the IRS. It can even eliminate interest or penalties over three years old that are related to the tax debt. Please call our office for a free consultation.
Credit Improvement After Filing For Bankruptcy
Filing for bankruptcy may improve your credit, as it improves your debt to income ratio. Bankruptcy provides a clean slate from which you can begin to rebuild and improve your credit. This way, you can work on a financial plan that will be successful and prevent you from falling into the same scenario again.
Bartifay Law Offices Can Help You in Your Bankruptcy Case
If you think bankruptcy might be a good option for you, feel free to contact us here at Bartifay Law Offices. We can help guide you through how to file for bankruptcy and make the process as easy as possible. Contact us today to begin your path to financial relief.