Deciding whether or not to declare bankruptcy is without a doubt one of the most difficult things you’ll ever have to face. The emotional toll that it will take on your self-esteem and financial future is tough to wrap your mind around, but unforeseen live events can cause bankruptcy—and the truth is—it’s not all bad news.
Benefits of Bankruptcy
Bankruptcy is neither inherently bad or good, but it does provide protection for consumers who find themselves in financial trouble. Yes, your credit score will drop significantly and it does stay on your credit report for 10 years, but there are also many benefits that could change your life:
- Total debt amount is discharged: A Chapter 7 bankruptcy discharges all of your unsecured debt, such as credit card debt, personal loans, business loans, medical debt, private student loans, utility bills, and apartment leases. Once your bankruptcy goes through, you have no legal obligation to pay these debts back.
- Prevents mortgage foreclosure or repossession: Chapter 13 bankruptcy allows you to pay back your debts through a monthly plan if you are behind on your mortgage or car loans. This may allow you to keep your home, car and other assets, and pay your debts back more affordably than doing so on your own.
- Automatic stay: As soon as you file for bankruptcy, you receive immediate protection—known as an automatic stay— from almost all kinds of collection activity. It can stop foreclosures, repossessions, license suspensions and creditor harassment, however, the stay is only temporary. You’ll have to talk to an attorney to find out how this may affect you.
- Protects assets through exemptions: The state determines which assets and how much value is exempt in the bankruptcy process. Exempt assets—including equity in homes and retirement funds—are protected, so you may keep them when filing for bankruptcy. An attorney can help you analyze your situation and determine which exemptions offer better protections.
If you want to discuss your options for dealing with debts and foreclosure, please contact our Altamonte Springs bankruptcy lawyer at the Law Office of Russell S. Hershkowitz, L.L.C. We provide effective and insightful legal counsel and can help guide you through the tough & complex bankruptcy process.
Call (407) 753-4111 or contact us online to set up a free consultation. We serve all Central Florida.