Even with the new bankruptcy laws, filing for bankruptcy can provide some advantages, if done correctly in the right situations. Bankruptcy has historically been viewed as a financial mechanism where one can wipe the slate clean and start over, based on mountains of financial obligations that are seemingly too high to ever be paid in full.
The new bankruptcy laws make this process much more difficult than it used to be. One big reason that the new bankruptcy laws were put into place is because, like almost anything else where there can be a consumer benefit derived from it, maybe people were abusing the bankruptcy system. They would amass a huge pile of debt, then file bankruptcy to wipe their financial slate clean, then start over at the same place and do the same thing over and over again. Such a scenario is no longer possible with the new bankruptcy laws.
Some things do not change. If you have financial obligations and do not pay them, either as a consumer or as a business, there are things that the creditor can do, which of course includes the harassing calls, just short of downright “threatening” in nature, that you may have received or may even be receiving today. If the payments are not made or some alternative and mutually agreeable situation is not worked out, then the creditor has every legal right to name you in a lawsuit. Such lawsuits are common and are designed to protect the creditor who gave money, goods, or services in good faith that he would indeed be repaid.
You do not want or need the stress that accompanies umpteen phone calls on a regular basis from the collections department of your creditors, with each call being less friendly than the last one. You already know what kind of financial situation you are in, and their constant hounding only serves as a reminder of that – a reminder that you probably do not need, which only serves to increase your stress level.
After you have filed your bankruptcy petition in federal bankruptcy court, you are given automatic protection from creditors. If a creditor calls you after you have filed your bankruptcy petition, you must tell them that you filed for bankruptcy and can even give them the case number, although you are not required to do anything more than to let them know that you filed bankruptcy. Since bankruptcy case records are open to the public, your creditor can easily enough find out your case number anyway.
If a creditor calls you after being told that you have filed bankruptcy, be very nice about it, and get their name, their phone number, the date and time of the call, and what creditor they are representing. Now you have some clout because that creditor is in violation of federal law. There have been some cases where a consumer’s debt with a creditor in this situation was wiped clean because the consumer now has every right to file a suit against that creditor for his violation of federal law.
Yes, there are some advantages to filing for bankruptcy, although bankruptcy should still be viewed as your last resort option, used only after all other viable options and alternatives have been exhausted.