However, there are some benefits to bankruptcy. You should be aware of them.
When declaring bankruptcy, certain debts may be eliminated or discharged. Is this a positive aspect? True, it is. Credit card, medical, auto, utility, and rent debts qualify for debt cancellation.
Those affected can also pay off their unsecured obligations. What constitutes unsecured debt? A secured debt is one in which the creditor (the party to whom you owe money) has the right to seize and sell certain assets of the debtor (you) if payments are not made. Also included are mortgages and auto loans. Other than these two categories, the remainder of your debts are unsecured, non-repayable debts.
On the other hand, some debts cannot be discharged. Included in this category are child support, alimony, student loans, taxes, and court-ordered damages. Therefore, if your debts fall within the appropriate category, declaring insolvency is the correct course of action.
Also consider your consumer debt to income ratio. If it exceeds a certain threshold, you should petition for bankruptcy.
Consider it a reboot button. You can start from beginning with everything. Now you can pursue long-term financial objectives that are realistic and beneficial. You might need a certain number of years to settle your non-cancellable debts.
However, commencing earlier is preferable to starting late. Some individuals procrastinate far too long before declaring bankruptcy, when they should have done so months earlier. Most people live in fear and paranoia because they are overburdened with debt. This is when declaring bankruptcy is the best option.
Filing for bankruptcy also signifies a new beginning. This can eliminate all the uncertainties and extra labor associated with fighting debt. This is particularly true regarding the quantity of paperwork to be completed. It is similar to pressing the reset icon. Psychologically, some individuals respond better to new beginnings.
After declaring bankruptcy, you have every right to refuse a collector's request to collect payments.
" - https://www.affordablecebu.com/