If you are even considering declaring bankruptcy, then you are probably not in a very good place, financially speaking. Despite this, you may be dreading declaring bankruptcy because of the negative connotations that bankruptcy has. However, you should not be afraid of bankruptcy, because it can have many positive benefits for your financial future.
Here are five ways bankruptcy could benefit you financially:
- Get rid of your overwhelming debt
- The most basic reason that bankruptcy can improve your financial future is simple: it can eliminate most or all of your current debt. No matter what type of bankruptcy you go through, at the end of the process most, if not all of your outstanding debts will be discharged, meaning you no longer will be legally liable for paying them back. This will allow you to move forward with your future without worrying about how you are going to pay back all of that money you owe.
- Keep yourself from being evicted or foreclosed on
- Not everyone knows that while a bankruptcy is ongoing, you cannot be evicted or foreclosed on. If you are declaring bankruptcy as an individual, that means you do not need to worry about becoming homeless while the bankruptcy process is going forward. If your business is declaring bankruptcy, it means you will be able to remain in your current place of business until the bankruptcy proceedings have come to a conclusion. However, you must file bankruptcy before a final judgment of eviction is entered against you or before a foreclosure sale.
- Focus on your other problems
- It is very rare for someone declaring bankruptcy to only be dealing with financial problems. Very often, people declare bankruptcy in the first place due to sudden, unexpected expenses, such as from medical bills or a need for sudden repairs due to an accident or natural disaster. Other times, they go bankrupt due to a sudden drop in income, such as from losing their job. Whatever your reason for declaring bankruptcy, you can focus on the other issues in your life, rather than being consumed by financial woes.
- Give yourself a chance to restructure your business
- A major reason that business owners in particular can benefit from bankruptcy is that they can use the bankruptcy process to restructure their business. This allows them to potentially cut costs by moving to a more profitable business model, or by removing redundancies within their business’ bureaucracy. Often, a business can come out of the bankruptcy process significantly more profitable than they were before.
- Improve your credit
- Paradoxically, many people who declare bankruptcy wind up improving their credit, despite the fact that a bankruptcy is typically seen as bad for a person’s credit history. This is because most people only seek bankruptcy when their credit is already poor, due to large amounts of unpaid debt. Bankruptcy discharges this debt, removing both the financial burden and the impact all that debt has on their credit. While this may be generally a good thing, people coming out of bankruptcy need to be wary that they do not use their newly improved credit to immediately go back into debt, which does happen on occasion.
If you are a Floridian wondering if bankruptcy is truly in your best interests, you should consult a Florida bankruptcy attorney to help you figure out what works best for you. Please contact the law offices of David Langley at (954) 356-0450 for a consultation about whether bankruptcy may be the right way to address your financial circumstances. The sooner you consult with a bankruptcy attorney, the more quickly you can get on a path towards repairing your finances.