5 Major Advantages Of Filing For Bankruptcy According To Legal Experts
There are several opinions about filing for bankruptcy. Although it’s not an easy decision for everyone, it can help you when you have no other option. In such a situation, it’s better to consult an experienced bankruptcy lawyer who can guide you properly.
According to the legal experts of BSA Ahmad Bin Hezeem & Associates LLP, many people were unaware that filing for bankruptcy can help them if they were not able to repay their loans. In this article, you will learn the five major advantages of filing for bankruptcy.
Benefits of Filing for Bankruptcy
If you are unsure whether bankruptcy is the right option for you, read this article till the end. Even if some people may discourage you from filing for bankruptcy, here are some advantages you should know before you drop the idea.
We have taken help from a leading bankruptcy lawyer San Diego to come up with the list of advantages. They have drawn on their experience and suggest that filing for bankruptcy might not be the end of the world as you had imagined. Let us now look at the major benefits.
Stay of Proceedings
One of the key benefits of filing bankruptcy is you get debt relief through the automatic stay. That means you will not get more calls from your creditors and agencies for paying the debt. If any creditor still attempts to call you or send you mail for repayment of your debt, the court may penalize them.
Moreover, when you file for bankruptcy, it will help you to avoid lawsuits. The creditors cannot file a lawsuit against you stating that you have defaulted the loan. If you want to learn how to file for bankruptcy, you can learn here.
Protection of Property
When your creditor sues you and draws a judgment from the court, the next step is that your creditor can take action on the judgment. For instance, the creditor can sell your property and embellish your bank accounts.
Filing for bankruptcy can help you to protect your property. When you file for bankruptcy, it can cease the creditor from selling your property and garnishing your bank accounts. However, the amount of property that you can protect depends on the allowed limit by bankruptcy law.
Lowest Cost Option
Another benefit of declaring bankruptcy is that it could be the cheapest option. When you have non-exempt assets and do not have to pay surplus income, it is the easiest way to deal with debts.
If you are unsure about non-exempt assets, these are the property that is not covered under the bankruptcy code. That means those assets may be sold to pay off some or all of your creditors even if you file for bankruptcy.
Modification of Secured Debt
If you have secured debt, it can be modified or even eliminated. Secured debt means the creditor can use your assets you had kept as a mortgage to repay the loan amount. Usually, people keep their vehicles or home as collateral at the time of borrowing funds from the lender.
In case of loan default or you were unable to repay the debt, the lender may use your assets to get the fund that advanced to you during the loan agreement. By filing for bankruptcy, your secured debt can be modified, and you may get more time to pay the loan.
Improved Access to Banking
When you are unable to pay your debts, the creditors may garnish your bank account. At that time, you may not be able to stop them because they have the right to sell your property and deduct payment from your bank account or wages. On top of that, you lose control and access to your credit cards and bank account.
When you file for bankruptcy, you may get improved access to your credit cards and banking facilities. It isn’t a great option that allows you to get access to your bank accounts and credit options during such a financial crisis.
Final Words
Hopefully, you have understood the benefits of filing for bankruptcy. Remember, you should always take advice from a bankruptcy lawyer whether it’s the right option for you. Moreover, the lawyer can also help you to advise you on your future financial plans.
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