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By SSLowrey
1. Eliminate the legal obligation to pay many of your debts..
This process of wiping the slate clean is called a discharge of debts. The
goal of a discharge is to reduce debt to give you a fresh start. Whether it
is through straight bankruptcy (Chapter 7 Bankruptcy) or through
reorganization (Chapter 13 Bankruptcy), most or all of your debts can be
cleared.
2. Stop foreclosure on you house and allow you to effectively make payments to
catch up on missed payments of your mortgage.
If your home is in foreclosure, Chapter 13 Bankruptcy will stop the
foreclosure any time prior to the sale. Bankruptcy does not eliminate
mortgages on your property without payment. Rather, bankruptcy will structure
a plan in order to repay your mortgage arrears (the amount that you are
behind).
3. Prevent your car or other property from being repossessed.
Even if the creditor has repossessed your car, filing bankruptcy can
effectively force them to return your car or other personal property (if the
bankruptcy is filed quickly enough). The past payments you have missed will
be consolidated into your Chapter 13 Bankruptcy plan. After this you will no
longer pay the finance company, rather you will make monthly payments to the
trustee of your Chapter 13 Bankruptcy who will then pay the finance company.
4. Reduce or even eliminate high medical bills.
Sometimes an unfortunate accident or major recently discovered illness can
completely ruin a family. Many families have to make choices on allocation of
bills. Often, bills that were once important become insignificant to the
large medical bills acquired by a loved one. Filing Chapter 7 Bankruptcy can
greatly reduce the amount of medical bills.
5. Recent loss of employment.
Studies show that loss of work is one of the most common reasons people file
for bankruptcy. This is very easy to see. A family can get comfortable on two
maybe even one salary. They can take on regular amount of debts, join clubs,
and pay normal bills with relative ease. All of a sudden one or both spouses
lose a job and a family must go from two salaries to one. Losing a job is
closely tied to high medical bills. Losing a job means this family may be
left without the protection of insurance that was once provided by their
employer. Often times these two factors combined create an almost impossible
mountain to climb without the help of bankruptcy.
6. Stop harassing behavior from creditors.
Some creditors do not always take the right course of action when attempting
to collect a debt. Often, creditors will persistently call the home of a
particular debtor with demeaning and abusive behavior. Not only is this
unethical it can rise to the level of unlawful. In essence, bankruptcy will
put on hold the demands of many creditors and stop the harassing phone calls
and other inappropriate behavior all together.
7. Restore or prevent your utilities from being shut off.
As you have probably seen many of these reasons overlap. Some lead to another.
If your home is in risk of foreclosure then your utility bill may also be in
risk of being terminated. Filing bankruptcy can prevent the utility company
from leaving you in the dark.
8. Provide help for large amounts of student loan debt.
While it is true that your student loans will not be eliminated like several
other types of unsecured debt, bankruptcy can consolidate your student loan
debt. This consolidation will allow a debtor to make monthly payments through
Chapter 13 Bankruptcy that are within the financial ability of the debtor.
9. End wage garnishments.
Chapter 7 Bankruptcy will stop wage garnishment. Wage garnishment basically
takes away your weekly earnings often times leaving you without necessities.
Chapter 7 Bankruptcy allows you to purchase necessities for you and your
family. Chapter 13 Bankruptcy will also help in this regard.
10. Challenge certain claims of fraudulent creditors.
Bankruptcy will allow you to challenge these claims from creditors who are
trying to collect more money from you than you really owe. An attorney can
provide the support and the backing you will need to step up to these
creditors. Attorneys often even the playing field between a big creditor and
a single debtor. Filing bankruptcy with an attorney can stop fraudulent
reporting by a creditor.
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