Are you thinking of filing bankruptcy? If so, you might be surprised at the number of things that can go wrong. In fact, it’s possible to file for bankruptcy without ever having to pay back creditors.
Bankruptcy is a legal procedure where you can get rid of debts that are too big or overwhelming. The goal is to give you time to repay them.
However, some people don’t realize that they can file for bankruptcy even if they aren’t behind on their payments. This means that you can get out from under debt without having to pay anything back.
If you want to know whether this will happen to you, read on.
1. You Can File For Chapter 7 Bankruptcy Without Paying Back Debts
Chapter 7 bankruptcy allows you to discharge your debts in full. That means that you won’t have to make any payments to anyone.
In fact, you don’t need to worry about paying back any money. Your debts will simply be written off completely.
2. You Don’t Have To Make Payments On Unsecured Debt
Unsecured debts include credit cards and medical bills. They are not secured by collateral like home mortgages.
This means that there isn’t anything tying these debts to you. As long as you continue making regular payments, they will remain unpaid.
3. You Get More Time To Repay Secured Debts
Secured debts include loans against property such as cars and homes. These types of debts are tied to something valuable.
For example, if you own a car, you may owe money on a loan against it. However, if you sell the car, you still have to pay back the amount owed.
4. You Can Avoid A Foreclosure Sale
A foreclosure sale is when someone sells an asset (like a house) to recover the money owed.
When you file for bankruptcy, you can avoid a foreclosure sale. Instead, the bank gets paid back first. Then, you can use the proceeds to buy another house.
5. You Can Use Your Home Equity To Buy New Property
You can also use your home equity to purchase new real estate. It doesn’t matter what type of property it is.
6. You Won’t Lose Possession Of Your House
The law requires banks to return your home to you after you file for bankruptcy.
7. You Can Keep Your Insurance Coverage
Insurance companies often refuse to cover your home while you are behind on payments.
However, once you file for bankruptcy, they must continue covering your home.
8. You Can Sell Your Car Or Other Personal Property
Your personal belongings are exempt from being sold during a bankruptcy proceeding.
9. You Can Continue Making Regular Payments
Even though you won’t have any more money coming into your account, you can still keep making regular payments.
10. You Can Stay With Your Family
Most families rely on one income. When both parents lose their jobs, it can cause problems.
With bankruptcy, you can stay with your family.
11. You Can Stop Collecting Rent From Tenants
Tenant-in-possession laws require landlords to continue collecting rent until they receive notice that you filed for bankruptcy.