Many people think that filing for bankruptcy is a form of failure, but this is incorrect. Bankruptcy is often used as a strategic tool to overcome debt, and it can be highly beneficial in certain situations.
If you have found yourself in a situation where you have overwhelming debt, considering a bankruptcy filing is wise. Not everyone is eligible for a Chapter 7 bankruptcy filing; you must have a low income in relation to your debts. However, the following are some common reasons why a person might voluntarily file for Chapter 7 bankruptcy.
They want the process to be over quickly
Some bankruptcy filings take many years to complete. However, Chapter 7 bankruptcy is completed in 6 months, on average. This time frame is very attractive for many people dealing with debt.
They want to take advantage of exemptions
It’s true that many assets in a Chapter 7 bankruptcy are subject to liquidation. Despite this, it can be possible to structure the bankruptcy in order to benefit from certain exemptions. This could include being able to keep assets that are necessary for work.
They want to halt creditor actions
Creditors can continue to take action against debtors until they file for bankruptcy. By filing for Chapter 7 bankruptcy, you will benefit from an automatic stay, which comes into place as soon as you file. This will mean that your creditors will not be able to take action against you for the duration of the bankruptcy filing.
If you are overwhelmed by debt, it is important to consider the opportunities that bankruptcy could provide you.