Making the choice to declare bankruptcy is not always simple, and you might not see any ‘benefits’ to doing so. Your debt relief options will always be considered by our Licensed Insolvency Trustees (LIT), who frequently identify alternatives to bankruptcy. However, filing for bankruptcy has several advantages. These should be kept in mind when you weigh your options and talk to a qualified specialist about them.
Bankruptcy may be a viable option for you to seek financial relief, but you should be aware that it will have a detrimental, long-term effect on your credit. After declaring bankruptcy, it will continue to appear on your credit report for seven to ten years, making it more difficult for you to apply for low-interest loans and create new credit card accounts.
Debt consolidation is always preferable to bankruptcy when the choice is available. Debt consolidation is only an option if you are accepted for a new loan or credit card account, which you will use to pay off your higher-interest debts. In that situation, declaring bankruptcy can be your best option. That’s why affordable bankruptcy representation in one of the best bankruptcy attorney Jacksonville FL!.Bankruptcy allows borrowers to stop all collection efforts and get a fresh start immediately.
Although bankruptcy releases you from debt collection, the difficulties may last for years. Even though debt settlement without bankruptcy can take longer, your credit may suffer less if the terms are correctly negotiated. Debt settlement has a less detrimental effect on your credit score and is recorded on your credit report for seven years.
Bankruptcy has significant consequences, including long-term damage to your credit score, but it can also, in some cases, reduce or erase your debts, save your home, and deter bill collectors.
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The following are some advantages of declaring bankruptcy:
1. Filing for bankruptcy puts an end to creditors’ pestering phone calls once you file for bankruptcy, all aggressive debt collection will halt.
2. Insolvency stops interest payments
You won’t be accountable for paying this interest or having interest increased to your debt as a result of filing for bankruptcy.
3. Filing for bankruptcy stops lawsuits against you.
When you file for bankruptcy, all legal actions taken against you by creditors, such as a wage garnishment, are stopped.
4. Filing for bankruptcy discharges your debt
You won’t have to continue making payments on your unsecured consumer debts once you’ve been dismissed.
5. Wage garnishments cease upon bankruptcy
Your company won’t deduct money from your paycheck any more to pay your creditors.
6. Some of your assets are protected by bankruptcy
When you file for bankruptcy, nothing will be lost. Discover what property is shielded in your province.
7. Bankruptcy is less expensive than other solutions.
Due to the fact that you must pay back the entire amount due plus interest, other options like debt consolidation loans or a debt management plan can cost more than filing for bankruptcy.
8. Bankruptcy is a speedier debt relief option.
Compared to other debt relief choices, you will be able to pay off your debts faster with this option, enabling you to begin repairing your credit sooner.
Conclusion
So, a debtor (the individual who owes money) can eliminate the majority of their debts by declaring bankruptcy. Bankruptcy may be preferable to other debt repayment options if total debt exceeds total assets owned by the debtor (including any home equity), and payback would take many years.