Are there additional benefits of filing bankruptcy, in addition to discharge of certain kinds of debts?
Some of the benefits of bankruptcy include: (a) the discharge of certain debts; (b) the ability to stop certain legal actions; and (c) the creation of a fresh start.
As to the discharge of debts, depending on the Chapter of bankruptcy and particular debt, it is possible to eliminate all of the money owed to the individual’s creditors. At the same time, the individual is, in most cases, not required to give up or sell any of his or her property.
Many people file bankruptcy as a last resort to stop something from happening. This could be a foreclosure, a car repossession, a wage garnishment, or a lawsuit. All of these actions are temporarily paused based on the Bankruptcy Code’s inclusion of the "automatic stay." This stay has been described as preventing any action that the creditor would realistically would want to take against a debtor. In certain Chapters of bankruptcy the debtor is able to keep property, even though outside of bankruptcy the creditor would have the right to possession.
Lastly, bankruptcy has as its purpose to provide the honest debtor with a fresh economic start. Many people feel free emotionally in addition to financially. As bankruptcy starts, the collection calls cease and people can create a new financial standing. Of course, changes likely are required to keep that start fresh.
If you have any questions on bankruptcy, call the Henshaw Law Office today at (408) 599-1305.
