Many people focus on the negative aspects of filing for bankruptcy, such as hurting your credit rating. However, there are actually a lot of good things one can gain from declaring bankruptcy. Here are several advantages of filing for bankruptcy that you should know about.
Get a Financial Fresh Start
Bankruptcy can discharge most of your unsecured debts, allowing you to have a financial fresh start. Instead of spending most of your money on your debt and worrying about your bills, you will finally have a chance to build up your savings and have more disposable income. This can give you tremendous relief and help you rest easier at night.
Stop Foreclosure and Repossession
When you are struggling to pay your bills, you may worry that your home will get foreclosed on or your vehicle will get repossessed. This can definitely cause you to lose sleep at night. By declaring bankruptcy, you may be able to stop all that. Once you file for bankruptcy, an automatic stay will be issued, which stops all collection efforts. You may be able to gain extra time to get current on your payments.
Improve Your Credit
It is true that your credit rating will take a hit initially after declaring bankruptcy. However, if you were struggling to pay your debt, your credit score might have already been low. Once you file for bankruptcy, you will actually have the opportunity to improve your credit over time. If you can’t qualify for traditional credit cards in the beginning, consider getting a secured credit card. This type of credit card requires you to make a cash deposit. After you make timely payments on this credit card, you may be able to qualify for traditional credit cards soon enough.
Learn How to Manage Your Finances
In order to qualify for bankruptcy, you will be required to complete a credit counseling course. During this course, you will learn how to budget your money better, build your credit and establish savings. After you complete this course, you will have a much better understanding about your finances. This can help you avoid getting into financial trouble again in the future.