Many people have the wrong idea about bankruptcy, thinking that filing for Chapter 7 is something to avoid at all costs. In their eyes, it’s an admission of failure – but in reality, declaring bankruptcy can set the stage for a better financial future and an improved quality of life.
If you’re facing a mountain of debt and running out of options, bankruptcy may be the best solution. Here’s what you can gain by filing a Chapter 7 claim.
Filing for Bankruptcy Can Relieve Your Stress
Juggling bills and dealing with constant phone calls from creditors is incredibly nerve-racking. Ongoing stress can take a real toll on you, affecting your thoughts, behaviors and bodily health.
Bankruptcy can ease your stress and enable you to enjoy life again. After you file, the collection activities will automatically stop and you can look forward to getting a fresh financial start.
Bankruptcy Wipes Out Many Kinds of Debt
Continue chipping away at your debts little by little, and it may take a great number of years to pay them all off – or, you may never achieve that goal.
If you file for Chapter 7 bankruptcy, many of your debts will disappear. Once you receive a discharge, you will no longer be obligated to pay the following:
- Medical bills
- Credit card bills
- Past-due rent
- Past-due utility bills
- Personal loans
Bankruptcy may not erase all of your debts, as filing for Chapter 7 doesn’t eliminate certain financial obligations like recent tax debt and child support. But by getting rid of most debts, you’ll have more room in the budget to pay the bills that remain.
Bankruptcy Can Improve Your Credit Score
Filing for bankruptcy will drive down your credit score, ruining it for years to come – or at least that’s what the credit bureaus would have you believe.
Chances are, your credit score is already not all that great if you have a pile of unpaid bills. So, by declaring bankruptcy and discharging most of your debts, your score should rise. Within a year or so, you’ll likely see a much higher score than you had before filing.
Bankruptcy Teaches You New Financial Habits
Financial missteps may have nothing to do with why you’re in need of debt relief – many people end up in dire straits as a result of job loss, medical issues or divorce. That said, filing for Chapter 7 will provide you with the tools you need to manage your finances in the future.
Bankruptcy law requires everyone who files to complete a debtor education course. The class can help ensure you have the know-how to make smart financial choices. Take full advantage of the opportunity to learn, and you’ll walk away wiser.
As you can see, Chapter 7 bankruptcy comes with several positives. But filing isn’t the right choice for everyone.
For expert advice, turn to the Law Office of Davis & Jones, P.C., in Salt Lake City, Utah. Our legal team has decades of combined experience in bankruptcy law, and we can help you decide if filing for Chapter 7 bankruptcy is your best approach to debt relief. To schedule a free consultation, contact us today.