Going through life with a mound of debt hanging over your head is never a good idea. There’s a difference between good debt and bad debt. Good debt is an auto loan, a mortgage, or home equity line of credit. Bad debt is unpaid medical bills, credit card debt, and other unpaid bills. Building up your credit takes years and some people build it way too fast when issued their first credit card. Here are some benefits of filing for bankruptcy.
When you file for bankruptcy with the help of a bankruptcy lawyer you will experience a clean slate once the process is complete. Your debts will be washed away and you can start over financially. The bankruptcy filing will remain on your credit report for anywhere from 7-10 years depending on the type of bankruptcy used in the filing. Once the slate has been wiped clean you can begin to rebuild your credit score and earn new credit.
Most bankruptcy filings come with a repayment plan after negotiations to help lower the amount of money that is to be repaid by the debtor. The repayment plan must be approved and the debtor must stick to it or else risk having to pay the full amount due to creditors. The payments will be less than what you would be required to pay each month when you total all of your bills.
Get Your Life Back
Quite possibly the most important benefit of filing for bankruptcy is that you will get your life back. The stress you endured when you had all of that debt hovering over you was likely very immense. Now that the debt is gone, or almost gone, you will see your stress levels decrease and you will be able to worry about other things in life and not your finances.