Consumers who are thinking about filing bankruptcy are faced with many questions and are frequently not sure what the advantages can be- if any. In addition the obvious advantage of not having the debt that hangs over their head daily, are there any other advantages of potentially damaging your credit report for 7 to 10 years by filing bankruptcy?

There are a lot of different aspects to take into consideration before making a final decision.  There are always other options to bankruptcy, but choosing the right option is not always an easy thing to do.  Below are some of the advantages of bankruptcy that can help the consumer make thought-consuming decisions that are right for them.  The advantages aren't always the deciding factor but they could sure help you make a wise decision. 

The Automatic Stay  

One advantage is when the consumer files for Chapter 7 or Chapter 13 bankruptcy, a petition is filed and there is what is called an automatic stay, which requires the creditors by law to cease all activities of collecting the debt.  This means that they have to stop calling, leaving messages, or mailing you notices when they're informed of your intentions.  Creditors can be penalized by the court system if their efforts continue.  This sort of situation is best handled by an attorney.  Bankruptcy Attorneys are available for a free consultation to answer any and all questions that you may have.  They will help you learn the advantages that can be offered by Chapter 7 and Chapter 13 bankruptcy.  Each kind of bankruptcy has its own set of advantages and disadvantages. 

 A Fresh Start 

The advantage of getting of a fresh financial start is another big benefit that a consumer should consider when deciding whether filing a Chapter 7 is the best choice for them.  Filing chapter 7 bankruptcy is a better option for debtors who have little or no property and mostly unsecured debts.  You could choose what debts you wish to file Chapter 7 bankruptcy.  This consists of both secured and unsecured debts.  Unsecured debts are considered things such as medical bills and credit cards.  A secured debt is when you have chosen to use collateral that can include your home, car, or other major virtues you have ownership of.  Chapter 7 bankruptcy is also known as liquidation.   

Possible Disadvantages  

Chapter 7 is not necessarily the perfect answer; however, as there are some unsecured debts that don't qualify for Chapter 7 bankruptcy- including the majority of school loans.  Please ask questions to your bankruptcy lawyers.  People who are eligible for Chapter 7 bankruptcy may be discharged or forgiven from most unsecured debts.  With a secured debt the creditor is entitled to collect the debt amount by seizing and selling certain assets of the debtor if payments are missed.   

Chapter 13  

Chapter 13 bankruptcy can provide a better solution for those consumers who have a regular income, secured debts and do not wish to lose their property.  Chapter 13 bankruptcy will allow the consumer to submit a plan, to the bankruptcy court to repay the debts that are secured in a three to five year period of time.  This means the consumer does not have to lose ownership of the items used to safe the debt.  Each person's situation is different, however, and gas to be evaluated before deciding the type of bankruptcy that is right for their particular situation. 

Learning Opportunities  

When a consumer is deciding to file for bankruptcy, whether it is Chapter 7 or Chapter 13, the consumer is required to take some classes.  The consumer must attend classes pertaining to credit counseling and debtor education.  This is an advantage that not only will help you figure out what had went wrong, but it will also help you discover new ways of budgeting, paying bills, and spending your funds so that you don't run into the same financial trouble in the future.  The classes also will teach you how to protect yourself against identity theft and also how to read and monitor your credit report. 

Employment After Bankruptcy  

Consumers that are worried about being dismissed from a job due to the fact that they're filing for bankruptcy should not be concerned.  Another advantage is that employers aren't allowed to dismiss an employee based upon the reality that they, the employee, are filing for bankruptcy.  Bear in mind, however, that it may have an effect on your ability to obtain new employment for a few years after filing for bankruptcy.