Advantages of Bankruptcy

Bankruptcies are on the rise so it seems that people understand the advantages of bankruptcy or maybe they are in the unfortunate position of having no choice over the matter. Whatever the reasons this article will list some of the advantages of bankruptcy and some of the obligations when doing so.
Relief from Debt
This is an obvious advantage. People have often gotten themselves in the unenviable position of being unable to pay off or service a debt. This may be through bad luck, poor judgment or financial mismanagement. No matter the reason, a large debt can be crippling and impact on many factors in a persons life. Not only will it affect the persons economic circumstances but it can impact on their health and cause problems in their personal relationships.
Stop Credit Agency Harassment
Filing a bankruptcy petition in a federal bankruptcy court will lead to protection from creditors. Credit agencies or collectors will persist in trying to recover money owed to their clients. This can take the form of physically visiting the debtor or phoning them up. In some cases they will phone up every day. It is federal law that this ceases once a petition has been filed. However you should advise the agency or creditor of the case number for the petition. This will stop the harassment.
A Fresh Start
If a person files for Chapter 7 bankruptcy, then they can effectively write off their debts. This can help them start again without the millstone of debt around their necks. However new revisions to this chapter have made it harder to claim chapter 7 bankruptcy. There is more onus on the debtor to prove that they cannot pay the debts and they have to attend debt/credit counseling programs after they have completed the bankruptcy process. They cannot file for this chapter for another 7 years afterwards.
The decision to file bankruptcy is never an easy one. From a practical standpoint it is becoming more difficult. There is also a degree of social stigma attached to going down this route. Inevitably your credit rating and history is damaged. This can take time to repair and may make getting credit harder or more expensive. However despite these factors, the advantages of bankruptcy are the elimination of debt, protection from collection agencies and lawsuits, and the ability to start again with a clean slate.
If you are thinking about filing for bankruptcy it is important to understand the options that are available to you, visit http://www.bankruptcyfixup.com for advice on handling bankruptcy, including more advantages of bankruptcy and understanding chapter 11 bankruptcy . Adrian Whittle writes on ways to deal with debt and bankruptcy advice.
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