When debt overwhelms you, it can be hard to find a solution that works for you. Many people might not even know that there are ways to get rid of pesky collector calls and the general stress of seeing bills pile up. Overwhelming debt negatively affects your credit, which can impact your life in many ways like being unable to secure a car loan or mortgage. Bankruptcy is a valid option in these and other cases. Learn more about bankruptcy benefits in this article.
What Does Bankruptcy Do?
Bankruptcy is the process of clearing your legal obligations to pay back outstanding debt. There are different types of bankruptcy, so an experienced attorney can help you navigate which one is right for you. Individuals and businesses can file, although legal implications differ. You may decide to look into some bankruptcy alternatives before filing.
Impacts of Overwhelming Debt
If you find you cannot pay back your debt due to any circumstance, the results can be devastating. These impacts can be physical, mental, and emotional. Here are some examples:
- Stress: Unmanaged stress can lead to sleep and other health concerns
- Emotional Pain: The inability to pay back your debt may result in low mood, self-esteem, and even depression
- Loss of Property: If your secured loans go unpaid, you risk facing repossession or foreclosure
- Lower Quality of Life: Without a higher credit score, you may have to drive a less reliable vehicle or settle for undesirable living conditions
5 Bankruptcy Benefits
If you have looked into all of your options, it may be that bankruptcy is the best solution. There are many advantages to filing.
Financial Fresh Start
One of the biggest bankruptcy benefits is a fresh start financially. Once you clear your debts, you have the ability to start over without a mountain of outstanding debt weighing you down. For many people, bankruptcy gives them the opportunity to regain control of their finances.
Another reason to consider filing is the improvement on your emotional well-being. Since facing the prospect of unmanageable debt and annoying creditors can be emotionally draining, removing that can make a significant positive impact.
Prevent Repossession and Foreclosure
A big advantage of bankruptcy is that it may prevent your home, car, or other possessions from being taken away. Since having a car repossessed or a home foreclosed can be a source of shame, avoiding this is a big benefit.
Late and missed payments can negatively affect credit that has impacts for the rest of your life. After filing for bankruptcy, you can fix your credit over time. While it still takes time and effort, it is possible to restore and rebuild your credit after bankruptcy.
Prepare for a Better Future
Finally, an important bankruptcy benefit is that it gives you the ability to plan for a better financial and emotional future. This means you can use the funds that went towards debt and apply them to saving for retirement, a vacation, or for emergencies.
The Law Offices of David Brunelle provides legal help for people filing for bankruptcy in Western MA and Northern CT. Contact us to learn more about how we can help you.