I am often asked during initial bankruptcy consultations about the negative implications and benefits of filing either Chapter 7 or Chapter 13 Bankruptcy. My usual answer is that in most cases, the benefits associated with a bankruptcy far outweigh its negative aspects. Debtors who are dealing with significant amounts of debt that they cannot repay should not fear filing. There are many benefits to filing; some readily obvious and some surprising.
Top 3 obvious benefits of filing for bankruptcy
1. Assuming you are filing Chapter 7 bankruptcy, your bills will be discharged and you will not need to repay them. In Chapter 13 bankruptcy, you will be repaying either all or a portion of your debts through the plan that will be based on your ability to pay. Ultimately, bankruptcy will eliminate most or all of your credit card debt, loans, medical bills, and other unsecured debt.
2. Once you file for bankruptcy, your creditors will stop contacting you. You will no longer receive letters or phone calls from the creditors. Once the bankruptcy is filed, creditors have no right to contact you and can be punished by the bankruptcy court for doing so.
3. After the bankruptcy is completed, debtors have an opportunity to have a fresh start without paying old bills and concentrate on rebuilding their financial health. They will not need to choose which bills to pay first, or chose between paying for their home or paying credit card debt.
Top 3 surprising benefits:
1. Debtors get their dignity back. They are able to sleep better at night knowing that they will not be harassed by creditors and they do not have to worry about the debt they are unable to repay. Once the bankruptcy is filed, there is an immediate sense of relief.
2. Bankruptcy gives you a chance to rebuild your credit score. Your credit score is greatly affected by such negative items as judgments and late payments. While a bankruptcy will not rebuild your credit right away, it gives you a chance to make future debt payments on time which will lead to a better credit score.
3. Your life becomes easier. Concerns about debt can damage personal and business relationships, make work more difficult, and can lead to depression. If those concerns are eliminated, debtors can go on with their lives.
Rather than being something negative, bankruptcy is a solution to problems that otherwise cannot be resolved. It can help and it usually results in both financial and intangible benefits and can lead to a life free of debt.
If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.