Financial crisis doesn't just affect your pocket, its also a constant cause for stress.
The New Beginning: The most basic advantage of filing for bankruptcy is the promise that your creditors will be a story from the past. The smallest credit card debts can look large, medical bills are extremely upsetting, and these are just some of the ways in which your nights can be turned into endless dark days. Once you file the petition for bankruptcy, before anything else the agent of this ‘trauma'-the creditor-is locked out of the house, disconnected from your life. While some of these problem areas are of course are tackled permanently if a discharge on the debt is given, others are only temporarily kept on hold. As much as it may seem like a psychological advantage, bankruptcy is as practical a solution as it gets. Your worries come to an end, and you are afforded the possibility of start afresh again.
Prevent Foreclosure on Your Home: Amongst the many advantages of bankruptcy one is that you can keep your home out of foreclosure. Although dependent on individual cases to some extent, generally speaking both your real and personal possessions are exempt from your bankruptcy estate, including your home. Once again the benefit is practical in the sense that bankruptcy will allow for a repayment plan which would take care of the debt that is posing the threat of losing your home.
Harassment From Creditors: Many debtors would vouch for this fact: not all creditors restrict themselves to phone calls! There's a very thin line between reminder, and harassment. It's up to you to decide whether the creditor is maybe crossing the line in his attempt to collect a debt. Persistent calls at home, abusive and disrespectful behavior are not rarities. Bankruptcy is the legal way of tackling such things which are not just unethical but can also lead to unlawful situations. Once you've filed for bankruptcy and you've informed your creditors of the same, and once a repayment plan has been put in place with the proper approvals from the Court these ‘reminders' become illegal. Bankruptcy will force your creditors to abide by federal law and wait in line with other unsecured creditors. Once you've filed for bankruptcy you are no longer vulnerable, and are on the right side of the law.
Repossession of Property: Not just phone calls and unfriendly visits, filing for bankruptcy will help you get back any property (including cars) that the creditor may have repossessed. (Provided the property has not been sold!) Any past payments you may have missed would be consolidated into your Chapter 13 plan. As per the Chapter 13 rule you will of course be making payments henceforth to a trustee not to the finance company. The law is clear on this issue, if you file for bankruptcy in time, which includes preempting that your car maybe repossessed because you are several months behind in your payment, bankruptcy will stop of the repossession.
Creditors have lawyers, and you should too!
If you're considering handling you own bankruptcy, than there are several things you should consider.
While yes, you will save money on attorney fees, you may lose money or property by not being familiar with the complicated bankruptcy laws, or not being aware of any loopholes or special circumstances you may qualify for.
The creditors' lawyers will have the opportunity to contest your bankruptcy and ask you questions during your meeting with your court appointed trustee and your creditors. Lawyers representing creditors are not being paid to be sympathetic or even necessarily respectful to you. It is not in the best interest of the credit card companies or loan institutions to be “understanding” and just forgive your debt. They want their money and they will attempt to get as much from you as possible. Having a bankruptcy lawyer on your side will act as a buffer between you and your creditors.
A bankruptcy attorney can give you valuable insights into the bankruptcy law. It is comforting to have an experienced bankruptcy attorney who will answer your questions and give you advice to help you through this difficult process.