As a Myrtle Beach bankruptcy firm, we often hear about the fears and drawbacks many clients believe about bankruptcy. Some of them are true, while others are wildly unsubstantiated flat-out false. However, one thing that many people have in common: they’re uncertain as to just how badly their lives will be affected going forward. However, what many of these people don’t realize is just how many benefits someone who declares bankruptcy could receive. Let’s take a look at just a few of them now.
Protection from Creditors
Perhaps the most valuable benefit of declaring bankruptcy is the protection a debtor receives from their creditors. When you file for bankruptcy, you’ll trigger what is known as an “automatic stay,” which is a legal protection that prevents creditors from taking any collection actions against you. That means your creditors have to stop harassing you with collection calls, your mortgage company must cease any foreclosure efforts they are making, and your car or other valuables cannot be repossessed. You also cannot be sued or have any collection tools such as bank levies or wage garnishments filed against you.
Chapter 7 bankruptcy allows you to discharge a good portion of your debts. Once you have used your exemptions and liquidated any non-exempt assets you might have, your remaining unsecured debts will be discharged, giving you the ability to get back on track financially without having to worry about the cloud of massive financial debt looming over your head constantly. Chapter 13 bankruptcy doesn’t always lead to debt discharge, but it can help you reorganize your debts so you pay them off within a span of about three to five years, essentially achieving the same goal.
Keep Valuable Possessions
When you file for bankruptcy, you’ll have the opportunity to protect some of your most important and valuable possessions. Are you scared of losing your car or a family heirloom that has tremendous sentimental value? You can protect these items through the careful use of exemptions, which allow you to keep these items secure from the liquidation process. In this way, you can actually save that which is most valuable to you.
Improved Credit Rating
While your credit rating will initially take a pretty significant hit from your bankruptcy declaration, many people who were already struggling for a considerable amount of time before declaring bankruptcy don’t actually see that sharp of a drop, and the majority of people who then make good financial decisions actually see a significant improvement in their credit score in as little as just a few short years. Although a bankruptcy will show up on your credit report for 10 years, it does not mean that your credit score will not improve or continue to climb immediately after your bankruptcy case is closed within a typical period of 3-4 months from the time of filing. Before you know it, you may actually find that you can obtain a mortgage and purchase a new house even before the bankruptcy fully disappears from your record!
Get help with your bankruptcy issues from Lam Law, LLC! Contact us today at (843) 695-7700 to request a free case evaluation and learn more about how you can benefit from this process!