While bankruptcy should be considered a last resort, for those who are in financial straits, there are benefits to filing bankruptcy.

We out line those benefits in this presentation. Remember, bankruptcy may not be the best solution for everyone. Be sure to

consult with a professional before filing.

PROS AND CONS OF FILING FOR

BANKRUPTCY

Part 1: Pros of Filing for Bankruptcy

Part 1 The Pros of Filing for Bankruptcy

For many, financial protection is an important reason for filing for bankruptcy. When a person files for bankruptcy, an automatic stay on collection is put in place. The automatic stay restricts creditors from taking any legal action to collect debt outside the bankruptcy process. The automatic stay essentially provides a shield against creditors until the bankruptcy ends.

Automatic Stay on Collection

Bankruptcy damages your credit. However, once creditors see that you have taken strong steps to resolve your debt problems, they are often more willing to work and help you re-establish your credit. It can help you in getting a quick start on rebuilding your credit.

Jump Start to Rebuilding Your Credit

A Chapter 7 bankruptcy allows for the permanent discharge of most unsecured debts. This means that debts like credit card bills, utility bills, medical bills, etc. will be forgiven. Student loan debts or back tax debts must meet specific qualifications before they can be discharged.

Discharges Debts

Another advantage of bankruptcy is though many of your assets will be liquidated to pay your debts, certain property is exempt, including your home, principal vehicle and other necessary items. Generally, property that is reasonably essential to the necessities of life is exempted from sale in a Chapter 7 petition.

Can Save Property

Bankruptcy stops other collection actions like wage garnishment, foreclosure and repossession proceedings.

Stops Garnishment

"Pros and Cons of filing For Bankruptcy." The Law Office of Areya Holder. Holder Law, 10 September 2010. Web. 1 July 2015. <http://www.holderlawpc.com/blog/pros-and-cons-of-filing-for-bankruptcy/index.html>

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