After being in debt for a certain period of time, it is wise to file for bankruptcy. However, filing for bankruptcy for the first time can be quite an inquisitive task. You might face numerous questions and doubts about how your life will transform after bankruptcy. A good and experienced Attorney firm, Recovery Law Group can come to your rescue in such a case.
In cities like Los Angeles and Dallas, TX it is quite common for people to be indebted owing to their lifestyle and standards that eventually lead them to bankruptcy. However, it is an astonishing reality that life after bankruptcy can be amazing too. This is so because your bankrupt life span might just contract to 3 – 5 months if you file for chapter 7 or for 3- 4 years if the filing of chapter 13 is done. And to get your bankruptcy discharged in short span of time, all you need to do is to get a well-qualified bankruptcy attorney. Not doing so might raise the chances of non-discharge of your debts, which will be a bad circumstance.
Here is a list of few benefits of filing for bankruptcy that you need to know:
- There will be no more credit card and medicinal debts
In major parts of America, medical bills and credit card expenses count for the maximum debts which eventually make them bankrupt. However, qualifying for and filing bankruptcy in chapter 7 can solve this issue. Chapter 7 which is the liquidation bankruptcy sets you free from several debts including credit card and medicinal debts. This law, however, does not gives relief to ones indebted by loans like student loans, taxation debts, etc.
- It protects your house from foreclosure
It is usually advised not to pay your off secured debt like debt for your home with unsecured debt like your credit card. Even the converse of it is a straight no. This is so because it can result in a huge mistake as a homestead is generally considered as an exempted property under chapter 7 bankruptcy as per the equity. Also, under the liquidation bankruptcy, only the unsecured debts are discharged and hence refinancing your home might lead to foreclosure. Filing for bankruptcy can, however, get you an automatic stay which prevents situations like foreclosure and lawsuits, etc.
- You will not need to touch your retirement funds for paying the debts
The liquidation bankruptcy of chapter 7 saves your retirement funds and other social security benefits from the bankruptcy estate. Moreover, if you are a senior citizen, you might also get guidance over estate planning and might also get judgment proof. This means that apart from discharging the unsecured debts, you are also entitled to forward your hard earned money and property to your family and friends. Even if you are of middle age you must not touch your retirement estate to pay debts as these funds are protected under chapter 7 bankruptcy.
- Be cautious before paying back to your relatives
It is highly recommended to pay back the debt to your relatives and family members only after your bankruptcy is dissolved. This is so because if you pay back that debt before the end of the bankruptcy, your pay back money is entitled to be plopped back into your bankruptcy account. However, if the case is urgent, you must take advice from your bankruptcy attorney about this. Also if someone is seeking divorce during the bankruptcy period, it might be beneficial for him/her because this might help them in resolving property divide in a much easier and smooth way. However, again it is recommended that you consult a wise and well-learned bankruptcy attorney over such matters and then proceed.
- A new chance to amend your credit and the budget
One of the best benefits that you get after filing for bankruptcy is that your budget starts to mend in a beneficial direction. Also after a time period of about 7 years, the negative value of the credit stops showing up but the credit report might show the bankruptcy status for about 10 years from the date of filing. This time span is just about 3-4 years in cities like California.
One thing that you should keep in mind is that your planning of budget includes all the living expenses from the biggest to the minutest. You must ensure that you make all the bill payments and also save a part of your earnings for the situation of crisis. You must keep a check on your credit card reports from time to time. For this, you can also sign up for apps like credit karma, mint, etc that will help you in this work of monitoring your credit score. Such apps also provide suggestions about the most beneficial deals for you considering your current bank account status and credit score. You may also consult the Recovery law group for advice on 888-297-6203.