You would be forgiven for thinking that bankruptcy is purely a negative act that has few benefits. Bankruptcy has been portrayed as a disastrous step that everyone should avoid. Now, obviously, no one wants to go through a bankruptcy and you should do everything in your power to avoid a financial situation that results in a bankruptcy filing.
But sometimes these things are out of our control. Unexpected expenses, medical emergencies, the unexpected loss of a job — these are things that we can’t control, and they can happen to anyone at any time. These sudden changes in our financial picture can lead someone to filing for bankruptcy. So then the obvious next question is this: what are the benefits of filing for bankruptcy?
The first answer is that the process allows you to clear out your debts. There will be an impact on your credit score and it will take you some time to recover from the bankruptcy, but the immediate relief from past debts will not only free up some space for you financially, but it will also be a massive emotional weight off of your shoulders.
There are also some practical benefits to bankruptcy. To name a few:
- Your creditors have to stop harassing you once you file for bankruptcy
- Bankruptcy stops wage garnishment and foreclosure
- It can also prevent the repossession of key assets and property, such as your home or car
Bankruptcy has a lot to offer those who are in need, and you shouldn’t shy away from filing if you fall on hard financial times.