Benefits of Filing for Bankruptcy

Perhaps the most immediate benefit of filing for bankruptcy is that it stops all collection action against you. If you have been getting calls from creditors, they must stop and can only communicate with you through your attorney.

Generally, your home will be exempted from liquidation, even under Chapter 7 Bankruptcy, depending on the amount of equity you have in it.

The most obvious benefit of bankruptcy is that it’s a means of managing and eliminating debt. Medical bills, credit card bills, and more can be discharged — in the case of a Chapter 7 filing, this can be done in approximately 5 months; under a Chapter 13 repayment structure, it takes three to five years, depending on your income.

Because some of your debts are discharged in the bankruptcy process, your credit score can be improved by filing.