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    Estate & Probate » Blog » Unexpected Benefits of Bankruptcy

    Unexpected Benefits of Bankruptcy

    Bankruptcy offers a person relief from the pursuit of creditors, but many people fail to realize that there actually a large number of unexpected benefits that arise from bankruptcy. This article will review some of the important but little known benefits that individuals are often able to realize through bankruptcy.

    Avoid Paying Former Spouses Some Debts

    Bankruptcy allows a person to discharge some or even all non-support obligations associated with a divorce, which can result in individuals saving a significant amount of money in some cases.

    Bankruptcy can Reduce the Impact of a Tax Lien

    In some situations, bankruptcy can result in tax liens being made either entirely or partially ineffective, which can save a person a significant amount of money.

    Change the Payment Terms for a Loan

    In many cases, people discover that declaring bankruptcy lets them reduce the monthly payments for a loan. In some cases, bankruptcy can even help a person escape a repayment plan altogether.

    Erase Judgment Liens on a House

    Bankruptcy, in many cases, allows a person to avoid judgment liens that have been placed on his or her house, which can prove to be particularly beneficial.

    Escape Unaffordable Payment Plans

    Bankruptcy often lets individuals escape significant monthly payment plans that they would otherwise be unable to pay.

    Prevent Debt Collectors from Resuming Payments

    Declaring bankruptcy often results in collectors from being only temporarily stopped from collecting certain amounts. In some cases, however, bankruptcy offers the option to permanently prevent collectors from resuming some collection efforts.

    Prevent Income Tax Lien Recording

    In some cases, income tax liens can result in potentially dischargeable debts being turned into amounts that a person must pay. Bankruptcy, however, sometimes lets individuals prevent the creation of income tax liens.

    Receive Money Recently Paid to a Creditor

    In some cases, people who declare bankruptcy are able to receive money that they recently paid to a creditor. Individuals are also able to receive recently repossessed vehicles.

    You Will be Protected from Employer Discrimination

    Some credit collection agencies go so far as obtaining court orders to contact employers and garnish a person’s wages. Many workers fear that wage garnishment will reflect poorly on them. The Bankruptcy Code, however, states that employers are prohibited from terminating workers or discriminating against them because they have filed for bankruptcy. An employer might still attempt to terminate a worker’s position for other reasons including failure to adequately perform the tasks of the job.

    Your Credit Score Will Increase More Quickly

    A person’s credit score is often impacted immediately after declaring bankruptcy. As a result, a person will likely have credit problems immediately after bankruptcy. Because credit scores are calculated based on a person’s outstanding debt and payment history, however, a person will not have any debts or late payments to affect their credit score moving forward, which means that his or her credit rating will often improve quickly.

    Speak with a Seasoned Bankruptcy Attorney

    The bankruptcy process can be particularly complicated and involves numerous considerations. If you or a loved one needs help navigating the bankruptcy process, speak with a skilled attorney. Consider contacting attorney Jim A Lyon today for an evaluation of your case.

    Ethan Moran
    Ethan Moran
    09:36 28 Dec 22
    To my wife and I, our probate case was complicated. Not to Jim! He made it look so easy, and his attention to detail is incredible. Highly recommend to anyone seeking an estate planning lawyer.
    Philippe Joshua
    Philippe Joshua
    17:56 30 Nov 22
    Jim's firm was referred to me by a friend who knew I was looking for an estate planning lawyer. I can't say enough good stuff about him. He's genuine, thorough and highly skilled. Strongly recommend.
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    Estate & Probate » Blog » Unexpected Benefits of Bankruptcy