5 Benefits of Filing Bankruptcy Chapter 7 in Arizona

benefits of filing bankruptcy chapter 7You’ve worked hard to keep finances under control. Paychecks are good, bills are respectable, and life couldn’t be better. One day, you’re injured while off work, rendering you unable to return for several months. Credit card bills pile up, mortgage goes into arrears, personal loans are serious late, and now you’re getting calls fifteen times a day.

It’s a nightmare, but luckily, the U.S. government allows persons with no means to pay debt to file bankruptcy. The process is long, yet the benefits are broken down into five sections below.

Helps escape credit card nightmares

Credit cards are useful for many reasons, mainly because it’s a payment method when paydays are days away. However, since most banks are overly generous with credit limits, people can easily get carried away, paying months’ worth of bills on their credit cards. This will rack up debt quickly.

Just know that the current amount of your credit card debts will likely more than double once you default and they start adding on late fees and interest every month.  It will take 6 months before they will charge-off your account and stop adding all the extra fees and interest. By that time, you will at least owe double the amounts.  Bankruptcy ends this nightmare.

You can affirm debt you can afford

Although debtors who file bankruptcy often want all debts erased, there are certain situations when signing a reaffirmation agreement may be prudent. With bankruptcy, you’re allowed to reaffirm debts you still intend to pay, like your vehicle (essential for work) and home (essential for living).

Attorneys will guide you through the Means Test which will ultimately determine whether reaffirming debt is prudential.

May prevent lawsuits for progressing

Have you racked up credit card debt, and are getting ready to go into collections? If the amounts are high, most likely, they will begin suing you in the next few months.

Don’t underestimate the stress a lawsuit or lawsuits can put on your life, even if you are judgment proof. If you have no assets to protect, and you aren’t up for a fight for the next few years, bankruptcy might be the best option.

By virtue of potential loss of credit opportunity, a judgement would be far more costly to persons in the long run than Chapter 7 bankruptcy.

Click here for additional information on Chapter 7 bankruptcy in Arizona.

Stops creditor harassment

When enough debts have racked up, and the original credit can’t collect on them, that debt gets sold for pennies on the dollar. You’ll receive calls at home, work, at your parent’s house, get threatened with jail and even have attorneys try to collect your debt. It’s a huge headache.

Once the petition for bankruptcy is filed, an automatic stay goes into effect. This means all calls, collection activity, even letters to your home will cease. This is incentive enough for most to file.

You are given a second chance

Indeed, bankruptcy wipes the slate clean for persons in your situation. Judgments are no longer collectable, creditors must leave you alone, finances start growing again, and the feeling you once had prior to this nightmare is restored.

Although it takes several years, creditors will eventually give you another chance. Since you cannot file again for eight (8) years, creditors are relatively confident you’ll repay loans and credit cards they offer you.

Things to Remember

Expenditures in contemplation of bankruptcy can be a problem if they occur within two years of filing, as would the transfer of any asset without appropriate compensation.

In the end, only you can make the decision to file Chapter 7, although the long-term benefits outweigh the short-term embarrassment you may feel.