Ways Bankruptcy Works For You
Bankruptcy can often be a difficult and sensitive subject. Many people that are considering filing for bankruptcy, they’re willing to hold off because they’re afraid it’s going to damage their financial situation for many years and are afraid of the upfront costs. The truth is that the faster you file for bankruptcy the faster you can start to rebuild, create a better financial situation for yourself, and your loved ones. To learn more about the process of bankruptcy here are some of the top ways that bankruptcy will work for your situation.
You’ll Stop Debt Collectors Calling You
If you’re facing a series of calls from debt collectors or your creditors have begun calling your family or bosses, you might be humiliated and harassed. If you file for bankruptcy, you’ll receive an automatic stay on your financial accounts and this ensures that your creditors will not be able to make attempts at collection. All further attempts to collect on your debt will have to know through your attorney.
You’ll Discharge Your Debt Forever
If you successfully qualify for bankruptcy, this is a permanent solution to debt that you could likely never repay. With a standard option for your debt you could be paying it off for decades but if you decide to discharge the debt, you can put an end to the debt entirely, qualify for financial products in the future and rebuild your credit.
You Could Start Building a Brighter Financial Future
It’s often detrimental for you to continue falling into debt. If you keep missing payments on financial accounts and faithfully charges, you will continue to damage your credit perhaps even further than a bankruptcy might. Discharging your debt can be a great way to remove some of the extra money that you might be paying out every month in payments and you can build towards a brighter financial future.
Future Payments To Your Creditors May Be Limited
If you’re filing for bankruptcy today, it’s likely that there’s going to be limits on the payments you will have to make to your creditors later on. Even if you are completing a chapter 13 bankruptcy, you’ll be responsible for manageable payments to your creditors that will leave you with the funds you need to maintain your quality of life. As long as you maintain your regular payments, the debts that you have will be manageable and you won’t be forced to spend for higher payments that have become unmanageable.
There Are Zero Tax Consequences
Under the process of bankruptcy, you will not experience any type of tax issue with debt that’s forgiven. Many people opt for debt consolidation or speaking to their creditors about debt forgiveness. When a debt is forgiven outside of bankruptcy it can often be considered taxable income and this can mean that the IRS could have you owing extra money on your taxes for the year the debt was forgiven. Choosing an option where you can forgive your debt without facing tax consequences is often advantageous and this is why many people seek bankruptcy.