How Filing For Bankruptcy Could Save Your Money In The End
The filing of bankruptcy for an individual is a serious matter. It is very important for the potential petitioner to understand the negative ramifications and well as the possible benefits before moving forward with the filing. They also need to determine which form of bankruptcy will best serve them based on their overall situation.
Due to the negative perception created by bankruptcy, everyone seems to understand the negative affects such as not being able to buy a home or a new car. However, there are some definite benefits to consider that may justify the filing. Assuming a chapter 13 filing, here are three reasons why bankruptcy can be of great benefit:
Save Cash by Restructuring
Once a repayment plan has been filed with the court (within 14 days of filing), the court will determine the feasibility of the plan. If approved, the result is often a significant discount on the outstanding debt unless it is secured debt. Secured debt is often discounted at a much lower rate allowing the creditor to collect at least the true value of the asset used as security. The total result of these discounts is a substantial overall savings as well as cash savings on aggregate monthly payments to creditors.
Restriction of Debt Creates Credit Stability
With a bankruptcy showing up on an individual’s credit report, most creditors will not extend credit to that individual until such time as the bankruptcy has been discharged and significant time has passed. When individuals are forced to live on a cash basis, money is usually saved as people will adjust their lifestyles to what they can afford.
Lifestyle Changes Create Financial Stability
Once individuals are out from under the stigma of bankruptcy, they often choose to make wise fiscal decisions in order to avoid further problems caused by becoming overextended. They may choose to invest some funds in order to create a safety net.
What to Consider
If you feel that bankruptcy is an option you would like to consider, you might want to consider legal advice before you proceed. There are many qualified law firms, such as mullinslawoffice.com/about-us, who have knowledge and experience in bankruptcy law and will be able to assist you..
We all have times in our life when we need to hit the reset button. If handled in the proper manner, bankruptcy can give you needed stress relief and a possible new beginning.
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Category: Bankruptcy
