Filing for bankruptcy, even when it seems to be the most logical course of action, can be a difficult decision to make. There are many reasons for a person to be worried about the negative consequences of filing for bankruptcy, most of which are secondhand exaggerations and misinformation, and in the face of all the negativity surrounding the idea of bankruptcy, it is easy to forget that there are many positive consequences of filing. It is important to remember that there is a reason bankruptcy exists, and in most cases, people who file for bankruptcy are much better off for doing so. If you are still unconvinced, read on to learn about the benefits of filing for bankruptcy.
Automatic Stay: End Creditor Harassment
It is never easy to deal with the endless phone calls, letters, and other contact from creditors and collectors who want money that you simply do not have. Fortunately, the act of filing for bankruptcy initiates what is called an "automatic stay." Once it is in play, your creditors are not legally allowed to contact you, no matter how much you owe. This is beneficial for two major reasons: firstly, without the stress and frustration of dealing with collectors, you can breathe a sigh of relief. Secondly, without that hassle, you will be able to focus your attention and energy on the things that are important, such as finishing your bankruptcy and your unrelated daily tasks.
Financial Freedom and a Second Chance
Bankruptcy is a legal avenue available to individuals and couples with overwhelming debt. With so much misinformation available, though, its purpose is often twisted or simply misunderstood. Essentially, bankruptcy is a way to achieve either erasure of debt or affordable debt consolidation; instead of drowning in your debt, you can give yourself a monthly budget that is both manageable and achievable. This second chance at financial freedom can make your life so much better than it is at present.
Organization and Documentation
One of the reasons some people fall into debt is that they are not as organized as they should be, which has detrimental effects on money management. One of the steps of bankruptcy is making a reasonable monthly budget; this budget, which is the determining factor for the monthly payments in a Chapter 13, forces the client to document all of his or her spending habits and he or she must adhere to the set budget, barring disasters or other accidents. Many people are surprised to see how much easier life can be when they know exactly where their money is and why at any given time!