Law Office of Robert L. Firth
A Dozen Surprising Benefits of Bankruptcy
Bankruptcy can go beyond giving you immediate and long-term relief from your debts. It comes with many other surprising benefits.
The next 12 blog posts will be about some of the most powerful and surprising benefits of bankruptcy.
You’re likely considering bankruptcy because you’re financially overwhelmed and need relief. You need immediate relief from debt collection pressures. You need long-term relief from having to pay debts you can’t handle. Bankruptcy provides that immediate and long-term relief.
But bankruptcy can often also give you some other rather amazing benefits, beyond the basic relief you expect. The next dozen weekly blog posts will give you details about the following benefits:
1. Get Back Money Recently Paid to a Creditor
Through “preference” law you could get back money you’ve recently paid to a creditor—paid either voluntarily or not.
2. Undo Judgment Liens on Your Home
Through judgment lien “avoidance” you can often permanently remove a judgment lien, a tremendous practical benefit.
3. Get Back Your Driver’s License after an Unpaid Judgment
Reinstate your license if you lost it by not paying a debt from an uninsured or underinsured motor vehicle accident.
4. Reinstate Your Driver’s License from Failing to Pay Tickets
Reinstate your license if it had been suspended for unpaid traffic infractions.
5. Get Back Your Just-Repossessed Vehicle
Filing bankruptcy not only prevents vehicle repossession; it may be able to get your vehicle back to you after it’s already been repossessed.
6. Get Out of an Unaffordable Payment Plan with the IRS/State
Bankruptcy comes with a surprising array of tools to use against your tax debts, allowing you to prevent or get you out of an onerous monthly payment plan.
7. Prevent Debt Collections from Re-Starting after Being “Stayed”
Bankruptcy doesn’t stop or only temporarily stops certain select debts from being collected—such as child/spousal support arrearage, recent income taxes, student loans, and debts incurred through fraud. But there are tools bankruptcy provides for resolving special debts like these permanently.
8. Prevent an Income Tax Lien Recording and Its Potentially Huge Damage
An income tax lien can turn a debt that could be discharged—permanently written off—into a debt that you must pay in full. A timely bankruptcy filing can prevent this financial hit.
9. Bankruptcy Can Often Reduce Some or All of a Tax Lien’s Financial Impact
In some situations a tax lien can be made either wholly or partially ineffective. Besides saving you lots of money you get the peace of mind that your home is not at risk.
10. Avoid Paying Your Ex-Spouse Most of Your Property Settlement Debts
Chapter 13 allows you to discharge—write-off—some or all non-support obligations of your divorce.
11. “Cram down” and Change the Payment Terms of Your Vehicle Loan
If your vehicle loan is more than two and a half years old, you can usually reduce your monthly payments and the total amount you pay on the loan.
12. Get Out of Your Vehicle Lease through Bankruptcy
Leasing is often the cheapest way to have a vehicle short term, but is actually usually the most expensive long-term. Bankruptcy can be the best way to get out of this expensive obligation.