Benefits of Bankruptcy

When you declare bankruptcy, you’re putting a process into motion that will bring about some major life changes. Your credit score will immediately drop, and you won’t have the financial freedom you once did – not for a while, anyway. But when considering if bankruptcy is right for you, it’s important to take the long view. While there are some immediate drawbacks to declaring bankruptcy, in the right situation, the benefits of bankruptcy greatly outweigh these drawbacks.

In this article, we want to focus on the benefits of bankruptcy and how bankruptcy can help you build a better financial future, so you can decide if it’s the right financial tool for you.

What Are the Benefits of Declaring Bankruptcy?

When you declare bankruptcy, your credit score will usually drop to around 580 – 600. This will directly impact your ability to get a new credit card or obtain loans.

There are also some major benefits, starting with the fact that your debts are immediately discharged. And, if you’re in a position where you’re considering bankruptcy, we don’t need to tell you that’s a huge benefit.

Here are the main benefits of bankruptcy:

• Wipes your debt clean: Chapter 7 bankruptcy can completely eliminate unsecured debt like credit card debt, medical debt, and personal loan debt. Note that some types of debt, like student loans, don’t automatically fall into this category. Chapter 13 bankruptcy does not wipe away your debt; it creates a manageable repayment plan for you to pay back your debt.
• Protects your assets (in most cases): When you declare Chapter 7 bankruptcy, your most important assets typically remain your property. These include your home, car, retirement accounts, and household items.
• Stops harassing creditors: One of the worst parts of dealing with debt is the nonstop calls from creditors. When you declare bankruptcy, these calls from creditors are required to stop.
• Halts foreclosures and repossessions: If you’re facing immediate foreclosure or repossession, declaring bankruptcy will force an automatic pause on these processes, giving you time to figure out a plan.

How Bankruptcy Can Help You Build a Better Financial Future

The bad news about bankruptcy is that, immediately after you file, you’ll see a precipitous drop in your credit score. The good news is that you can – and should – start building it back right away.

For many people in serious debt, building a better financial future is nearly impossible. The scale of the debt, with interest building constantly, makes it impossible to get out from under. It’s smothering. Filing for bankruptcy lets you get out from under all of that. It’s a long road, and not necessarily an easy one, but building a better financial future after bankruptcy is very possible. It’s a goal that thousands of people are working toward every day.

Because it can be difficult to see the road ahead, we want to share the story of a client named Chris and how he used bankruptcy to build a better financial future for his family.

A Case Study: Chris’s Bankruptcy Story

They were in dire straits when Chris and his wife first came into our office. They were behind on their mortgage payments and lived off credit cards. They believed that filing for bankruptcy would mean the end of their financial life, but we quickly dispelled that myth.

We helped them file for Chapter 13 bankruptcy, which allowed them to eliminate their second mortgage, gave them time to catch up on their first mortgage, and wiped away their general debt. This process allowed them to restructure their finances and start fresh.

Once the process was completed, they were able to start rebuilding their finances. A few years after their bankruptcy was finalized, Chris contacted us with some exciting news: he wanted to buy a commercial building.

This was a surprisingly short time frame for someone who had filed for bankruptcy, but it was a testament to how the process had given Chris a fresh start.

How Bankruptcy Gave Chris a Fresh Start

Chris needed copies of all the documents from our firm to purchase the property, and that’s when he reached out to us. Now, every week when we drive past that building, we feel great satisfaction knowing that we helped Chris get his financial house in order and buy an investment property. It proves bankruptcy doesn’t have to be a one-way ticket to financial doom.

Bankruptcy can be daunting, and it’s not a decision that should be made lightly. However, if you’re struggling with debt, it’s important to remember that it can be a tool to help you rebuild your finances.

Filing for bankruptcy can be the first step towards a better financial future. It allows you to eliminate your debts, restructure your finances, and start anew. Chris’s story proves bankruptcy doesn’t mean the end of your financial life – it can be the beginning of a brighter future.

Contact Our Oregon and Washington Bankruptcy Attorneys for Help

If you’re thinking about filing for bankruptcy and have questions about your case, contact the experienced bankruptcy attorneys at OlsenDaines. We also have some helpful bankruptcy FAQs that clients often ask us, which may shed light on your situation.

We have offices located throughout Oregon and Washington with experienced bankruptcy attorneys ready and willing to help you relieve your debt. To schedule your free, no-obligation consultation with one of our attorneys, simply call us or fill out our online form!