The Automatic Stay

One of the primary benefits to filing bankruptcy is the protection from creditors afforded by the automatic stay.  The automatic stay is a court imposed injunction that acts to stop lawsuits, foreclosures, garnishments, and all collection activity.  As the name implies, the stay arises automatically the instant the bankruptcy petition is filed.  The automatic stay is designed to protect you and your assets from creditors while your bankruptcy case is being administered.  The automatic stay preserves your assets, and gives you peace of mind knowing that you are protected until your case is completed.

Discharge of Debts

The second primary benefit of filing bankruptcy is the bankruptcy discharge.  A bankruptcy discharge releases you from personal liability for certain specified types of debts.  In other words, you are no longer legally required to pay any debts that are discharged.  The discharge is a permanent order prohibiting creditors from taking any form of collection action on discharged debts, including legal action and communications with you, such as telephone calls, letters, and personal contacts.

The timing of the discharge varies, depending on the chapter filed. In a chapter 7 case, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse (approximately 90 to 120 days after the case is filed).  In cases under chapter 13, the court generally grants the discharge after you complete all payments under your plan.  Since a chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs at the end of the plan period.

A Fresh Financial Start

A final benefit to filing bankruptcy is that after you receive a discharge, you get a fresh start free of any personal obligation to repay discharged debts.  You regain your dignity.  Being overburdened with debt too often affects your entire outlook on life.  You go through life worrying about the mortgage or the car payment, or how on earth you are going to repay out of control credit card debt or medical bills which may have accumulated due to a job loss or medical calamity, and which may be heavily laden with usurious interest charges and exorbitant fees.  That is hard on your sense of self-worth and can easily lead to depression.  Once you file bankruptcy, those feelings of worry immediately stop.

Your good credit score will return after you file bankruptcy.  The biggest drag on your credit score is late or missed payments.  A bankruptcy won’t improve your score immediately, but since the debts that weren’t getting paid will be gone, you will quickly be able to focus on rebuilding your credit through strong performance on post-bankruptcy credit.

You will regain control over your life.  Money problems are often damaging to your home life and your personal relationships.  When you and your family are constantly worrying about how to pay the rent, or constantly receiving annoying or possibly abusive telephone calls from collectors, it can’t help but lead to fighting or bickering.  Bankruptcy can help you to take control, rid yourself of excessive debt, and get the most out of your life.

Consult an Experienced Bay Area Bankruptcy Attorney

To begin to realize these benefits, please call our office today for a free no-obligation consultation.  You need to be fully informed before you can decide, and consulting with a knowledgable San Francisco bankruptcy attorney is the next step.  Don’t delay.  Call 415-865-0212 today.

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