Many people fear bankruptcy because of the numerous misconceptions about the process. Although no one wants to be in the financial position to need bankruptcy, it can actually provide many great benefits for those who file.
One of the most immediate and sought after benefits of bankruptcy is the relief from creditors is can provide. Filing for bankruptcy can provide peace of mind and alleviate the stress in dealing with credit collections. When you file for bankruptcy an automatic stay order is issued, which legally prohibits creditors from making further collection attempts.
One of the main concerns people have about bankruptcy is what will happen to their assets. In general, bankruptcy can protect your assets much better than defaulting on your debt payments and not being protected. Although some of your assets may be at risk for liquidation in Chapter 7 bankruptcy, there are bankruptcy exemption laws that can protect your major assets such as your house and car. A Chapter 13 bankruptcy can guarantee protection of your assets, as long as you are making consistent payments towards your repayment plan.
One of the most notable benefits of bankruptcy is alleviating your debt burdens. A Chapter 7 bankruptcy can eliminate nearly all of your unsecured debt, usually within a matter of months. A Chapter 13 bankruptcy can resolve your unsecured and secured debts through a repayment within a three to five year period.