Debt is something most of us carry, and too many of us face hardship over. While some level of debt is actually beneficial for your credit profile, there are limits before it comes detrimental. If you are dealing with overwhelming debts and looking for a way out, here is what you need to know about how bankruptcy can help.
1. Stop collections — when you file for bankruptcy your creditors are notified and served with a court order to cease all collection efforts, including wage garnishment, repossession and foreclosure. If you have assets at risk or are worried about losing your wages, filing for bankruptcy can protect you from these consequences of default.
2. Protects property — it may sound counter intuitive, but filing for bankruptcy can actually offer a better level of protection of your personal property than not filing and continuing in debt default. The reason is that creditors can sue you for liquidation of your assets, especially those that are secured debts. Filing for bankruptcy puts a stop to seizure and liquidation efforts, while you work out a plan to resolve your debts. Even in a Chapter 7 liquidation bankruptcy, exemption laws protect much of your essential pieces of property.
3. Provides relief — there are several options for resolving debts and finding financial relief, but they aren’t all the same or beneficial for everyone. Bankruptcy offers unique benefits for most people over other forms of debt relief. Consult with a Fort Worth bankruptcy attorney to determine whether bankruptcy is right for you.
4. Offers credit repair — you may be under the impression that bankruptcy damages your credit, which is false. Debt default and missed payments damage your credit. Bankruptcy eliminates high debt balances and delinquent account statuses, wiping your credit slate clean for a fresh rebuild.