How Does Filing Bankruptcy Help
How Does Filing for Bankruptcy Help?
The biggest benefit of filing bankruptcy is usually stopping harassment by creditors. However, there may be additional benefits to this legal action. The benefits will depend on your unique circumstances and which chapter you file.
Filing for Bankruptcy in Washington
As stated above, harassing phone calls from creditors will stop when the bankruptcy is filed. Filing bankruptcy will also stop most wage garnishments and many clients recover funds garnished within 90 days of the bankruptcy being filed. Once the bankruptcy is filed repossessions and foreclosures must stop and can only resume after the Automatic Stay is lifted. These are usually the most immediate benefits of filing bankruptcy.
When clients have poor credit scores, their credit scores typically improve quicker having filed bankruptcy than when they negotiate with creditors outside of bankruptcy. Frequently their credit scores are above 700 within 2 years of filing Chapter 7. 2 years after filing Chapter 7 debtors can qualify for home loans at prevailing rates.
It is not uncommon for clients to have more disposable income after they file bankruptcy, allowing them to live on a more reasonable budget, contribute to retirement, and save for the future.
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