How Can Filing For Bankruptcy Help My Finances?
benefit of bankruptcy is the discharge of debts, which enables a debtor to start over with a
clean slate. However, there are many other advantages, including protection
of property and an automatic stay.
Discharge of Most Debts
The principle goal of most bankruptcies is to have most unsecured debts
discharged. The bankruptcy discharge totally eliminates any personal obligation
to pay many types of debts. ( A few types of debts are not dis-chargeable.
Also, if a creditor has a lien on property taken as collateral, the debt
owed to that creditor may still have to be dealt with after bankruptcy
because the lien will, in some cases, survive). For most debtors, bankruptcy
is a relatively quick and easy way to end the creditor harassment, hardship,
anxiety and marital stress normally associated with debt overload.
Protection Of Property and Income From Unsecured Creditors
Bankruptcy is often the only sure way to protect a debtor's property from unsecured
creditors (those who did not take a lien on property as collateral at
the time of the transaction). Bankruptcy may provide total protection
for a home, car or other vital property.
Normally, bankruptcy also serves to prevent any garnishment (attachment
or seizure) of wages or other income after the petition is filed. This,
in turn, may protect an individual's job if the employer does not
favor multiple wage garnishments. Even attempts to reduce Social Security
or other public benefit payments to get back previous overpayment's
should be preventable by a timely bankruptcy petition.
Tools For Eliminating or Modifying Secured Debt
bankruptcy discharge does not, by itself, eliminate the liens on a debtor's property that
secured creditors have obtained before bankruptcy. However, other provisions
in the Bankruptcy Code do give debtors mechanisms to deal with most secured
creditors. many types of lines may be eliminated or reduced, either because
they impair exemptions or because they are on property that is worth less
than the liens. In a Chapter 13 case, payments on most other secured debts
can be lowered, and a reasonable time can be gained to cure almost any
defaulted secured debt. Often, one or more of these aspects of bankruptcy
enable a debtor to retain a home, car or furniture that would otherwise be lost.
The most valuable feature of a bankruptcy is sometimes the automatic stay,
which the debtor gains instantaneously on filing a petition. The stay
is an automatic court order that prohibits all sorts of collection attempts
by creditors, allowing the bankruptcy to proceed in an orderly fashion.
It forces an abrupt halt of most creditor actions against the debtor,
including repossessions, garnishments or attachments, utility shutoff's,
foreclosures and evictions. many of these can thereafter be permanently
prevented. The stat is also an effective way (though hardly the only way)
to end creditor collection efforts. Creditors who violate the stay risk
contempt of court, money damages and attorneys fees. Beyond all this,
the stay gives the debtor time to sort things out.
Other Protections Available Through Bankruptcy
Bankruptcy may offer the only possible way for an individual to keep or
regain a driver's license that is subject to revocation because of
an unpaid debt arising from a motor vehicle accident. This, in turn, may
mean employment and income for the individual's family. In some cases,
bankruptcy may mean freedom for a debtor who might otherwise be incarcerated
for failure to pay support obligations or as a result of a contempt proceeding
involving some other debt. The Bankruptcy Code also protects the debtor
from many types of discriminatory actions by government bodies and private
employers on the basis of unpaid debts discharged in bankruptcy.
Bankruptcy is certainly a life-altering event, but it doesn't have to be a negative
experience. Our Lawyers at Atlantis Law, is committed to helping clients
through the bankruptcy process so that they can achieve fresh starts financially.
They are passionate lawyers who work hard to ensure that their clients
receive the compassionate and considerate attention they deserve.
Contact the team at Atlantis Law, to learn more about the bankruptcy process and
your options to pursue freedom from debt.