Filing Bankruptcy - Know About The Advantages
Bankruptcy is the state of an individual or a business unable to pay off their debts.
When talking in legal terms, bankruptcy is the settlement of liabilities of a person or organization, completely or partially, who are usually in a situation of being unable to pay the sustained financial obligations.
Usually bankruptcy serves for two purposes: 1.
It gives the debtor a fresh financial start by discharging his or her debts.
2.
It gives the creditor a reasonable share of the money that one can afford to pay off.
As soon as a debtor files bankruptcy, the court issues an automatic stay that indicates creditors should immediately stop their collection activity.
Here are several advantages of filing bankruptcy: Discharges all the debts: With chapter 7 bankruptcy, you will be discharged from all the unsecured debts.
In order to be discharged, one should file for bankruptcy.
Also it will make an end to creditor harassment and the financial stress relating to the situation.
Property protection: In case the creditor sues the debtor and gets a judgment, then the immediate action is execution of that judgment.
While executing the judgment, the creditor forces property sale and garnish the bank accounts.
During this case, when the debtor files bankruptcy, the legal court will immediately cease and protects the debtor's property.
Over the course of period, the total amount of property one can protect depends on the exemptions allowed under the bankruptcy code.
Automatic stay: Once the debtor files bankruptcy, the court will issue an automatic stay to all the creditor actions, such as lawsuits, garnishments, repossession, foreclosure, short sales, and evictions.
Filing bankruptcy stops a creditor from initiating or continuing a lawsuit against the debtor.
When a creditor garnishes a person's wages, and the person has not enough money for the necessities in life, then filing a bankruptcy makes an immediate end to wage garnishment.
Bankruptcy filing can also stop a house from being foreclosed.
Elimination or modification of secured debts: During the bankruptcy, a debtor can have several ways to deal with the secured debts.
In few cases, judgment liens passed against a person's home can also be eliminated.
With the help of chapter 13 bankruptcy, one can reorganize their payment of secured debts and the court gives time to repay the debt without any default occurring, like loss of home or vehicles.
Bankruptcy is a complicated process, so it is necessary to consult a bankruptcy attorney.
An attorney is familiar with the ins and outs of filing bankruptcy and he/she can also recommend which chapter of bankruptcy is right for you.
Also the attorney can help with the extensive paperwork, which is essential in filing bankruptcy.
When talking in legal terms, bankruptcy is the settlement of liabilities of a person or organization, completely or partially, who are usually in a situation of being unable to pay the sustained financial obligations.
Usually bankruptcy serves for two purposes: 1.
It gives the debtor a fresh financial start by discharging his or her debts.
2.
It gives the creditor a reasonable share of the money that one can afford to pay off.
As soon as a debtor files bankruptcy, the court issues an automatic stay that indicates creditors should immediately stop their collection activity.
Here are several advantages of filing bankruptcy: Discharges all the debts: With chapter 7 bankruptcy, you will be discharged from all the unsecured debts.
In order to be discharged, one should file for bankruptcy.
Also it will make an end to creditor harassment and the financial stress relating to the situation.
Property protection: In case the creditor sues the debtor and gets a judgment, then the immediate action is execution of that judgment.
While executing the judgment, the creditor forces property sale and garnish the bank accounts.
During this case, when the debtor files bankruptcy, the legal court will immediately cease and protects the debtor's property.
Over the course of period, the total amount of property one can protect depends on the exemptions allowed under the bankruptcy code.
Automatic stay: Once the debtor files bankruptcy, the court will issue an automatic stay to all the creditor actions, such as lawsuits, garnishments, repossession, foreclosure, short sales, and evictions.
Filing bankruptcy stops a creditor from initiating or continuing a lawsuit against the debtor.
When a creditor garnishes a person's wages, and the person has not enough money for the necessities in life, then filing a bankruptcy makes an immediate end to wage garnishment.
Bankruptcy filing can also stop a house from being foreclosed.
Elimination or modification of secured debts: During the bankruptcy, a debtor can have several ways to deal with the secured debts.
In few cases, judgment liens passed against a person's home can also be eliminated.
With the help of chapter 13 bankruptcy, one can reorganize their payment of secured debts and the court gives time to repay the debt without any default occurring, like loss of home or vehicles.
Bankruptcy is a complicated process, so it is necessary to consult a bankruptcy attorney.
An attorney is familiar with the ins and outs of filing bankruptcy and he/she can also recommend which chapter of bankruptcy is right for you.
Also the attorney can help with the extensive paperwork, which is essential in filing bankruptcy.
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