When you’re in debt, you may be worried about what your options are. If you’re thinking about your options, bankruptcy might be one of the most beneficial. While a lot of people are nervous about the idea of bankruptcy, there are several benefits. Here is how bankruptcy might benefit you.
Forget Collection Calls
Do you have to turn off your phone to avoid calls from collection agencies? When you owe money, it may feel like you’re experiencing constant harassment. Once you file for bankruptcy, the creditors and collection agencies have to stop the calls. Filing for bankruptcy can help you to alleviate the debts that you owe them. If you file for Chapter 7 bankruptcy, you discharge your debts. For Chapter 13 bankruptcy, on the other hand, you reorganize your debt and create a payment plan. Either way, you can avoid harassing phone calls from creditors.
Lose the Stress
When you’re struggling with debt, it’s difficult not to be stressed. Your finances might be on your mind constantly. It can affect how much you can spend on the necessities. You may not be able to afford food, your utilities or even your rent or mortgage. Once you file for bankruptcy, you can eliminate your debt. It may start to feel like you’re starting fresh again.
Improve Your Credit Score
This is a benefit that you probably don’t usually think about when considering bankruptcy. After all, when you first file for bankruptcy, your credit score will take a hit. If you have a credit score of over 700, then your credit score may drop 200 points. If you have a credit score around 680, however, you may only lose 150 points.
If you don’t file for bankruptcy, your credit score could drop even further. When you can’t pay your debts, you might miss credit card payments. When you miss credit card payments, the interest will grow and your credit score will suffer more. When you file for bankruptcy, you can have your credit score back to normal within a couple of years.
When you think about bankruptcy, you may worry about what it will do to your credit score or how it will affect you negatively. The reality is that there may be more benefits than disadvantages. This is especially true when you have a mountain of debt. Find out more by consulting with a bankruptcy lawyer, like from Chorches Bankruptcy Law, as soon as possible.