Filing for bankruptcy is not an easy decision to make. It will take time and effort to gather all the documentation you need and present an application. There is also the risk that you lose some of your possessions – although probably not nearly as much as you think.
Despite this, it is a decision that many find immensely worthwhile. Here are some of the benefits it can bring:
1. Immediate peace of mind
A Chapter 7 filing can bring you peace of mind in two ways. Firstly – in the short term because the moment you file, your creditors must stop contacting you. That will come as a massive relief if they have been bombarding your phone or mailbox with attempts to get you to pay them. If creditors have been garnishing your wages, that too will halt.
2. Future peace of mind
Secondly, is the long-term peace of mind that comes from knowing you no longer have those debts the court frees you from. In years to come you may look back on your bankruptcy filing as the point when your life changed for the better. Chapter 7 can give you a clean slate – it’s up to you what you do with it going forward.
3. The prospect of an improved credit score
It might sound counterintuitive to suggest that Chapter 7 can bring you an improved credit score, as it is common knowledge that filing for bankruptcy will see your score plummet. Yet, by filing, you give yourself the chance to improve it again sooner.
If you stay as you are, your already bad credit score will only get worse, and it is not going to improve until you better your financial situation. So, unless you have another plan to get you out of debt, bankruptcy may be the best way to improve your credit score, even if that will take some time.
Learning more about bankruptcy can help you make an informed decision on whether to file or not.