Some people tend to hold an ill impression of the bankruptcy process, mostly brought about by a lack of knowledge and misconceptions. Although the process may not be the first line of debt relief for everyone, there are many benefits to the process that cannot be found elsewhere.
Important Points
One of the most immediate benefits to the bankruptcy process is the protection from creditor harassment. When your Tampa bankruptcy attorney files your petition, the court issues an order called the automatic stay. This order prevents creditors from making collection attempts and prohibits them from contacting you. If a creditor violates this order they could face serious consequences. No other forms of debt relief help can offer this type of legal protection against debt collections.
Not only does the bankruptcy process stop credit collections, but it also prevents your assets from being repossessed or liquidated. Bankruptcy can halt or prevent a foreclosure while you work to resolve your mortgage debts through a court approved plan. For many people, this immediate safeguard of their home can mean the difference in eviction and resolution. Other types of debt reduction strategies cannot provide immediate protection of your assets.
Filing for bankruptcy can also offer a wider range of debt resolution assistance. In other forms of debt relief efforts, you may not be able to have certain types of debt resolved. For example, secured debts like your mortgage, or priority debts like tax debts, may not qualify for debt relief outside of bankruptcy. These types of debts are often more likely to be efficiently resolved in a Chapter 13 filing than in some agency guided effort to negotiate with the creditor directly.