Bankruptcy was created to help people navigate financial difficulties by giving them a chance to start from scratch. This start comes with a negative impact to your credit, but this drawback is generally worth it. If you find yourself in the position where you’re considering Chapter 7 bankruptcy, don’t let the possible hit to your credit deter you. There are plenty of benefits of filing for bankruptcy, as well.
The Possible Benefits of Bankruptcy
- An end to phone calls – Being in debt comes with a daily bombardment of calls from creditors. Filing for bankruptcy gives you refuge from these phone calls, because it makes it illegal for creditors to call you with the intent of threatening repossession, foreclosure, or wage garnishment.
- Pardon for negative account reports – Any credit reports with late payments and high credit balances are typically wiped clean in bankruptcy. Debts go from being reported as delinquent to either being discharged in your bankruptcy.
- Improved debt–to-credit ratio – This is the ratio of outstanding debt to total available credit balance. Since bankruptcy discharges most debts, this ratio is typically more favorable after bankruptcy.
- Fresh start – A huge debt hanging over your head can be overwhelming. Saving money for priorities can be impractical when creditors are garnishing some of your wages. By wiping out your debt, you’ll have the opportunity to rebuild your finances without that ball and chain.
Bankruptcy isn’t the end, it’s a new beginning. It’s an opportunity to regain the financial ground you’ve lost over the years. Though it will likely hurt your credit in the short-term, bankruptcy gives you the chance to build good credit history moving forwards. If you are unsure whether you want to file for bankruptcy, contact an experienced bankruptcy lawyer near you. The attorney can review your financial situation and determine the best strategy for managing your debts.
Washington DC bankruptcy attorney Kevin D. Judd has made it his mission to help you find the best solutions available in your unique situation.