{"id":3219,"date":"2021-05-14T09:09:36","date_gmt":"2021-05-14T09:09:36","guid":{"rendered":"https:\/\/hsapclaw.com\/?p=3219"},"modified":"2023-04-28T07:21:02","modified_gmt":"2023-04-28T07:21:02","slug":"the-benefits-and-drawbacks-of-filing-bankruptcy","status":"publish","type":"post","link":"https:\/\/hsapclaw.com\/the-benefits-and-drawbacks-of-filing-bankruptcy\/","title":{"rendered":"The Benefits and Drawbacks of Filing Bankruptcy"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Filing for bankruptcy has a lot of potential benefits for individuals who are no longer capable of paying debts. Understanding basic bankruptcy law and knowing the potential advantages of filing bankruptcy is important. Choosing whether to file a bankruptcy petition, <a href=\"\/bankruptcy-attorneys\/when-to-file-bankruptcy\/\">deciding on the right timing<\/a>, and learning how to file is a difficult task to do on your own. To decide if bankruptcy is the right choice for you, you should seek legal help from a trusted Royal Oak <a class=\"linkilo_keyword_link  hyperlinks\" href=\"\/federal-bankruptcy-exemption\/\"  rel=\"dofollow\" title=\"bankruptcy lawyer\" data-linkilo-keyword-link=\"linked\">bankruptcy lawyer<\/a>.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While it is true that filing a bankruptcy petition may hurt your finances, experienced Royal Oak bankruptcy attorneys can assist you to get the most out of a successful bankruptcy filing.<\/span><\/p>\n<p><b>What are the benefits of a bankruptcy filing?<\/b><\/p>\n<ol>\n<li><span style=\"font-weight: 400;\"> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Being protected by the automatic stay<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Eliminating debts through discharge<\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 <a href=\"\/chapter-7-bankruptcy-exemptions\/\">Bankruptcy exemptions<\/a><\/span><\/li>\n<li><span style=\"font-weight: 400;\"> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Eventual improvement in credit score<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/hsapclaw.com\/contact\/\">Contact a reliable Royal Oak bankruptcy attorney<\/a> to know the different benefits of a bankruptcy filing.<\/span><\/p>\n<ol>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"_Being_protected_by_the_automatic_stay\"><\/span><span style=\"font-weight: 400;\">\u00a0Being protected by the automatic stay<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-6630b539a8a4b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6630b539a8a4b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/hsapclaw.com\/the-benefits-and-drawbacks-of-filing-bankruptcy\/#_Being_protected_by_the_automatic_stay\" title=\"\u00a0Being protected by the automatic stay\">\u00a0Being protected by the automatic stay<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/hsapclaw.com\/the-benefits-and-drawbacks-of-filing-bankruptcy\/#Eliminating_debts_through_discharge\" title=\"Eliminating debts through discharge\">Eliminating debts through discharge<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/hsapclaw.com\/the-benefits-and-drawbacks-of-filing-bankruptcy\/#Bankruptcy_exemptions\" title=\"Bankruptcy exemptions\">Bankruptcy exemptions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/hsapclaw.com\/the-benefits-and-drawbacks-of-filing-bankruptcy\/#Eventual_improvement_in_credit_score\" title=\"Eventual improvement in credit score\">Eventual improvement in credit score<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/hsapclaw.com\/the-benefits-and-drawbacks-of-filing-bankruptcy\/#What_are_the_potential_consequences_of_filing_bankruptcy\" title=\"What are the potential consequences of filing bankruptcy?\">What are the potential consequences of filing bankruptcy?<\/a><\/li><\/ul><\/nav><\/div>\n\n<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">There are a lot of potential benefits when you <a href=\"https:\/\/hsapclaw.com\/bankruptcy-attorneys\/\">file for bankruptcy<\/a>. If you are considering bankruptcy, once you file your petition, the bankruptcy court will immediately grant an automatic stay. An automatic stay prohibits any collection activity from the creditors. It does not wipe out the debt but it will put a stop to all collection activities before the bankruptcy case is over. It prohibits calls from debt collectors, lawsuits, <a class=\"linkilo_keyword_link  hyperlinks\" href=\"\/wage-garnishment\/\"  rel=\"dofollow\" title=\"wage garnishment\" data-linkilo-keyword-link=\"linked\">wage garnishment<\/a>, foreclosure, and repossession.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If a creditor attempts to demand payment from you even after the bankruptcy court issued an automatic stay, your <a class=\"linkilo_keyword_link  hyperlinks\" href=\"\/federal-bankruptcy-exemption\/\"  rel=\"dofollow\" title=\"bankruptcy lawyer\" data-linkilo-keyword-link=\"linked\">bankruptcy lawyer<\/a> may file a contempt of court suit against the creditor.\u00a0 However, an automatic stay does not stop the collection of criminal proceedings, child support, or alimony.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you have only applied for bankruptcy once in the previous year, you may ask the bankruptcy court for an extension of the first <a class=\"linkilo_keyword_link  hyperlinks\" href=\"\/automatic-stay-bankruptcy\/\"  rel=\"dofollow\" title=\"bankruptcy stay\" data-linkilo-keyword-link=\"linked\">bankruptcy stay<\/a>. On the other hand, if you applied two or more times in the previous year, your <a href=\"\/automatic-stay-bankruptcy\/\">automatic stay<\/a> will not go into effect until the bankruptcy court issues an order.\u00a0<\/span><\/p>\n<ol start=\"2\">\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Eliminating_debts_through_discharge\"><\/span><span style=\"font-weight: 400;\">Eliminating debts through discharge<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-3221 size-medium alignright\" src=\"https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/05\/Filing-Bankruptcy-300x300.jpg\" alt=\"Filing Bankruptcy\" width=\"300\" height=\"300\" srcset=\"https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/05\/Filing-Bankruptcy-66x66.jpg 66w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/05\/Filing-Bankruptcy-150x150.jpg 150w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/05\/Filing-Bankruptcy-200x200.jpg 200w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/05\/Filing-Bankruptcy-300x300.jpg 300w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/05\/Filing-Bankruptcy-400x400.jpg 400w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/05\/Filing-Bankruptcy-600x600.jpg 600w, https:\/\/hsapclaw.com\/wp-content\/uploads\/2021\/05\/Filing-Bankruptcy.jpg 626w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/> You will be entitled to discharge your obligation to repay certain debts. There are different types of debt and a dischargeable debt may be discharged in the event of bankruptcy. These often include credit card bills, medical bills, and personal loans.<\/span><\/p>\n<ol start=\"3\">\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Bankruptcy_exemptions\"><\/span><span style=\"font-weight: 400;\">Bankruptcy exemptions<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">Exemptions can allow you to keep your home after filing for bankruptcy. If you can exempt an asset from being confiscated in a bankruptcy proceeding, you will not have to think about it. These exemptions are crucial in both bankruptcy Chapter 7 and Chapter 13.\u00a0<\/span><\/p>\n<ol start=\"4\">\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Eventual_improvement_in_credit_score\"><\/span><span style=\"font-weight: 400;\">Eventual improvement in credit score<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\">While fears of a ruined credit rating deter many people from filing a bankruptcy petition (and indeed undergoing the bankruptcy procedure can influence your credit rating for seven to ten years) many individuals can see improvements in their scores months after filing bankruptcy. If a debtor\u2019s debts have been discharged, they will have a fresh start and have a chance to restore their credit.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Timing is crucial when you file for bankruptcy. Filing when you should not or doing so at the wrong time may complicate your financial condition. Filing for bankruptcy too soon may result in an individual losing his asset that he would have been able to retain initially, or forcing them to file to a certain bankruptcy form that is not in their best interest may likewise lead to consequences.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Even if bankruptcy is the best choice for an individual, there may have long-term financial consequences that should be considered before declaring bankruptcy. Consult with <\/span><a href=\"https:\/\/hsapclaw.com\/\"><span style=\"font-weight: 400;\">experienced Royal Oak bankruptcy attorneys<\/span><\/a><span style=\"font-weight: 400;\"> to assist you throughout the bankruptcy process.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_the_potential_consequences_of_filing_bankruptcy\"><\/span><span style=\"font-weight: 400;\">What are the potential consequences of filing bankruptcy?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When you apply for bankruptcy, several credit card companies immediately terminate any cards you have. Following your filing, you will certainly receive several offers to apply for unsecured credit cards. These will help you restore your credit score but they usually come with a high interest rate.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bankruptcy filings may affect your credit score. <\/span><a href=\"https:\/\/hsapclaw.com\/chapter-7-bankruptcy\/\"><span style=\"font-weight: 400;\">Bankruptcy Chapter 7<\/span><\/a><span style=\"font-weight: 400;\"> or liquidation bankruptcy remains on a credit report for ten years while<\/span><a href=\"https:\/\/hsapclaw.com\/chapter-13-bankruptcy\/\"><span style=\"font-weight: 400;\"> Chapter 13<\/span><\/a><span style=\"font-weight: 400;\"> or reorganization bankruptcy stays for seven years. Another potential disadvantage is that getting a mortgage may be difficult. A bankruptcy filing can make it hard to obtain another loan.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You may experience real estate losses when you file for bankruptcy. Exemptions do not always apply to both real estate and personal property. It means that the court will take and sell some of your assets to pay back some creditors. Bankruptcy may also result in the denial of state and federal tax refunds.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When you file for bankruptcy, it cannot eliminate all types of debt. Certain types of debts are not dischargeable. These include child support, alimony, <a class=\"linkilo_keyword_link  hyperlinks\" href=\"\/student-loan-debt\/\"  rel=\"dofollow\" title=\"student loan\" data-linkilo-keyword-link=\"linked\">student loan<\/a> debt, criminal fines, and other debts accrued by fraud. In addition, the stigma associated with jobs and housing may also happen. Any prospective employers will inquire about any bankruptcies, which could jeopardize your prospects.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Filing for bankruptcy has a lot of potential benefits for individuals who are no longer capable of paying debts. Understanding basic bankruptcy law and knowing [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":3222,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/posts\/3219"}],"collection":[{"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/comments?post=3219"}],"version-history":[{"count":11,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/posts\/3219\/revisions"}],"predecessor-version":[{"id":4216,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/posts\/3219\/revisions\/4216"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/media\/3222"}],"wp:attachment":[{"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/media?parent=3219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/categories?post=3219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hsapclaw.com\/wp-json\/wp\/v2\/tags?post=3219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}