You may view the process of filing bankruptcy in a negative light. Filing for bankruptcy is a serious undertaking.
Bankruptcy also provides many benefits to families not available outside of the bankruptcy process.
1. Keep your home
If you are behind on your mortgage payments, you know how hard it is to catch up with the arrears. Lenders add late fees and penalties to increase the amount you owe. An aggressive mortgage holder can start foreclosure proceedings against you to take possession of your property. If the lender forecloses on your home, you will lose the property.
By filing for bankruptcy, you can stop any foreclosure proceedings. As part of your bankruptcy, you can negotiate a way to pay back any arrearage and stop the running on penalties and interest.
2. Stop creditor harassment
If you receive regular calls from creditors trying to collect bills you cannot pay, a bankruptcy filing will stop creditors from calling. Bankruptcy also stops any litigation proceedings creditors may have against you. The only recourse creditors will have is through the bankruptcy court.
3. Eliminate debts
If you qualify to file a Chapter 7 bankruptcy, you can probably eliminate most of your unsecured debt, including credit cards and medical expenses. If you file Chapter 13, you will likely pay a small percentage of the amounts owed to unsecured creditors through one monthly plan payment.
Bankruptcy can provide significant relief for your family if you have overwhelming debts that you cannot pay. After filing, you can start over and change your financial future.