No one wants to feel their friends or family look down upon them. However, someone dealing with financial troubles and incredible amounts of debt might worry about people’s opinions. Some may think about filing for bankruptcy, but they do not want people to see them as weak or irresponsible. Such attitudes may be misguided since filing for bankruptcy may be the right way to address financial challenges.
Bankruptcy as a valuable asset
Bankruptcy brings potential rewards not everyone thinks about when struggling over what to do with excessive obligations. Likely, the most valuable benefit would be the discharge of unsecured debt. Whether filing for Chapter 7 liquidation bankruptcy or a restructuring plan under Chapter 13, the court might dismiss unsecured debt the debtor cannot pay. Once these obligations disappear, the debtor might find his or her life becomes less financially strained.
Collections calls and threatening letters may increase a debtor’s frustrations and anxieties. When filing for consumer bankruptcy, collections actions must stop, per the court’s directives. Without help from the bankruptcy court, collections actions and all its hassles may continue. Lawsuits could result, as well.
Rebuilding for the future
When helplessly dealing with debt and collections, the debtor might never handle the current situation. Paying the minimum each month on the balance on maxed-out credit cards doesn’t change the present, much less build for the future. Filing for bankruptcy could “clean the debtor’s late” and set a strategy in motion for the future.
The future might involve coming up with a more manageable budget or even moving to a place with a lower cost of living. At the very least, rebuilding a credit score becomes an option. Without bankruptcy proceedings, changing the future might be difficult.
An attorney may assist with the challenges of filing for bankruptcy protection. The attorney could also compile evidence necessary for the filing.