Can Filing for Bankruptcy Be a Good Thing?

 

Filing bankruptcy can be a stressful experience, but can it be a good thing? If you’ve been thinking about filing bankruptcy in order to get control of your life, there are a few things you need to know.

There may come a point in your life when you feel that you have no options for moving forward. You might feel depressed, anxious, or stressed. You might feel like you are drowning in debt. Perhaps you’re thinking about filing for bankruptcy, but you aren’t sure if it’s the right thing to do. After all, bankruptcy does carry with it some disadvantages. When you file for bankruptcy, you may find that it becomes difficult to get a loan or mortgage. You may find that your future lending options are limited. Can bankruptcy ever be a good thing, though? Here’s what you need to know.

Automatic Stay

When you choose to file for bankruptcy in the United States, an automatic injunction will start. This is called an automatic stay. It prevents you from being harassed by creditors during the bankruptcy process. An automatic stay ensures that creditors cannot take actions against you in order to get you to pay back any debts. This begins as soon as you file bankruptcy. An automatic stay can benefit you if you suspect your landlord wants to evict you or if your utility company wants to shut off your water or electricity.

Improved Credit

Understand that a bankruptcy will appear on your credit report for 7-10 years; however, it presents you with a unique opportunity to begin rebuilding your credit from scratch. If you want to buy a home in the future or begin building credit once more, bankruptcy gives you a chance to have a fresh start when it comes to your credit. Additionally, living without credit cards for a few years enables you to focus on spending within your means and when you do decide to utilize lending again, you’ll find that you’re better able to understand the loan process.

Credit Counseling

If you plan to declare bankruptcy, you will need to take credit counseling. Even if you’ve never had credit counseling before, you may find that this is incredibly beneficial and helps you understand exactly how finances work. You’ll receive training and assistance to help you make good financial decisions in the future and you’ll learn what you need to start moving forward with your financial future.

No matter what type of bankruptcy you’ve been thinking about declaring, an attorney can help. The right bankruptcy attorney can help minimize your stress and reduce your anxiety; however, your lawyer can also help you understand exactly what steps you need to take to file for bankruptcy. Your lawyer will review your personal finances with you and let you know what your options are moving forward, as well as which choices will best benefit you. When you’re ready to experience financial freedom, reach out to a bankruptcy attorney for a personal consultation.