Some Advantages of Personal Bankruptcy

By Paul Caston

Introduction

Attorney Paul Caston is based in Hattiesburg, Mississippi, where he counsels clients considering bankruptcy. He remains abreast of new developments by taking seminars and other continuing legal education courses.

Personal bankruptcy offers several advantages to those struggling with their finances. The primary advantage is the chance to begin anew, as many of those who file manage to have the majority of their debt discharged. Furthermore, once a bankruptcy is filed, an automatic stay goes into effect.

Collection Efforts

This stay prevents most creditors from pursuing collection efforts; evictions and foreclosures may be delayed or stopped, as well as wage garnishments and utility interruptions. Those creditors who still pursue debts after the stay begins are subject to rigid legal consequence and may face contempt of court or liability for damages. A Chapter 7 bankruptcy eliminates most unsecured debts, i.e. those which are not secured by collateral. Secured debts, such as automobile loans or mortgages, cannot generally be discharged unless the debtor surrenders the collateral.

Conclusion

Alternatively, the debtor can keep the collateral and continue making payments by entering into a reaffirmation agreement with the creditor.

Attorney Paul Caston is a debt relief agency as defined by the United States bankruptcy code. The office helps people file for relief under the bankruptcy code.