By R.C. Bai
As we get more familiar with the term bankruptcy these days you also should know the benefits. With all the options available for people with debt problems bankruptcy is the only one that provides legal protection. Read on to find out what the major benefits are.
There are many cases today where a persons debt load is so big that bankruptcy is really the logical option. Of course the biggest drawback is the destruction of your credit score. Getting past that there are two major benefits that this options affords individuals.
Those two benefits are
- Protection - unlike other debt relief programs bankruptcy puts you under the protective umbrella of the courts. Lenders, collectors, liens and any other judgments are stopped. You will always have some collectors who ignore the law, but now that you know you rights those collectors risk lawsuits if they continue that practice.
- Automatic Stay - this is a similar type of protection that bankruptcy provides. Both chapter 7 and 13 have this provision and as soon as you file your papers this automatic stay kicks in. If you get calls from collectors all you need to do is refer them to your lawyer. Again, if they continue to harass you after you informed them about your bankruptcy consult with your lawyer about what to do. They are now breaking the law.
Your petition for bankruptcy still has to be approved by a judge and depending on what chapter you file will determine how your debt will be handled. Chapter 13 will be on your credit file for 8 years and chapter 7 will be 10.
There are several factors you should consider before you make your final choice. Also, if bankruptcy ends up to be your choice find out how to prepare for it before you file the papers.
To get more information about bankruptcy and other options go to the Debt Hub. This is an important decision. Get informed, get more answers and most of all get on with life. You have choices, it's time to use them.
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