People who file bankruptcy enjoy many benefits.

These benefits may include:

  • No longer be considered a debtor, as bankruptcy is your way out of debt.

  • Stop garnishments, sheriff sales, and all other collection activities.

  • Stop creditors who have been harassing you.

  • Eliminate most, if not all, of a person’s unsecured debt including medical bills.

  • Eliminate most, if not all of the debt listed on your credit report.

  • Stop IRS and other tax authorities from taking action against you and your assets.

  • End harassing telephone calls.

  • Stop real estate foreclosures.

  • Stop vehicle repossessions.

  • Rebuild credit after filing.

  • Obtain new credit cards after filing, and use those cards to enhance your credit score. 

  • Continue to support your family. 

  • Stop pending lawsuits against you. 

  • Have a fresh start to a healthier financial future. 

  • Enjoy a smooth process from the filing of your bankruptcy petition through the issuance of your discharge. 

  • Start saving money for retirement.

  • Budget your current expenses effectively 

  • Keep any alimony payments owed to you. 

  • Take advantage of bankruptcy regulations meant for protecting your assets and income.

  • Receive excellent legal service before and after filing.

  • Avoid having to attend a trial in court.

Additional benefits of chapter 13 bankruptcy may allow a person to:

  • Pay mortgage arrearage over time while protecting the person’s home.

  • Avoid foreclosures.

  • Lower the interest rates on a person’s vehicle loan.

  • In the case of an over-financed auto loan, a chapter 13 bankruptcy can force a lender to accept the value of the vehicle instead of the amount due under the purchase agreement (also known as a “cram down”).

  • Eliminate 2nd mortgages in certain instances.

  • Repay tax debt over the course of the chapter 13 plan.

  • Pay student loans through the chapter 13 plan. 

  • Keep the money you have in your bank accounts. 

  • Keep your business going.  

  • Pay the chapter 13 plan directly from your income. 

  • Keep the assets you own, including tools and real property.

  • Have the financial protection necessary to maintain your current household.

  • Keep the money in your retirement accounts. 

  • Not be forced to liquidate your financial assets.

Frequently Asked Questions Regarding The Benefits of Bankruptcy:

  • Q: Will I still be able to make contributions to a nonprofit after filing?
    A: Yes.
  • Q: If I file a chapter 7, will I get to keep all the assets that I own?
    A: Probably.  Most chapter 7s are considered “no-asset” cases.  That means that you will get to keep all your possessions.
  • Q: After I receive my discharge, is it possible that there could later be some sort of court decision or article to dismiss it?
    A: No.
  • Q: I am a director of a large company and earn much more than median income.  Is it possible I could still benefit from filing a chapter 13?
    A: Yes.
  • Q: Are there pros and cons to filing bankruptcy?
    A: Yes. Our team will offer an expert legal opinion and evaluation of your particular pros and cons.  We will clearly discuss strategy with you before you ever sign your bankruptcy petition.
  • Q: I am in poor and failing health.  May I file bankruptcy on my medical bills?
    A: Yes.
  • Q: Will I still be able to purchase insurance after I file?
    A: Yes.
  • Q: Is the legal process of filing bankruptcy difficult?
    A: No.  As long the debtor answers all questions honestly and provides the necessary documents, it tends to go smoothly.
  • Q: Who is my hearing with?
    A: A bankruptcy trustee who will ask some questions about your recent financial past.
  • Q: Will the fact that I filed bankruptcy appear on all my future financial statements?
    A: No.
  • Q: Will I be able to discuss matters will my legal counselor to determine whether bankruptcy is an affordable option for me?
    A: Yes.
  • Q: If I earn a wage working different shifts every day instead of a salary, am I still able to file?
    A: Yes.
  • Q: If I file a chapter 13, will I get to keep all the private property I own?
    A: Yes, as long as you keep up with your monthly plan payments.
  • Q: With the current circumstance of COVID, is it anymore difficult than to file than it used to be?
    A: No.  Many actually find it a bit easier as they currently do not have to attend meetings in person.
  • Q: If there is a financial crisis throughout the entire community, does the rule of law require a temporary halt on bankruptcies?
    A: No.
  • Q: Are my personal loans dischargeable?
    A: Yes.
  • Q: Do many debtors achieve financial success in life after filing bankruptcy?
    A: Yes.
  • Q: I have heard that bankruptcy protects people from losing their homes.  Is that true?
    A: Yes.  Chapter 13 frequently protects people facing foreclosures.
  • Q: I owe a large balance to a big corporation.  Could bankruptcy eliminate that debt for me as well?
    A: Yes.
  • Q: If I file a chapter 13, will I still get to keep my coin and baseball card collections?
    A: Yes.  There is a good probability that you could keep your collections when filing a chapter 7 as well.
  • Q: Is it the policy of the trustee at my hearing to do everything he or she can to prevent me from getting a discharge?
    A: No.  The job of a trustee is to be fair and serve the interests of justice.
  • Q: Will all my creditors be making allegations against me at my hearing?
    A: No.  It is very rare for even one single creditor to attend a hearing.
  • Q: I have a reverse mortgage.  May I still file a chapter 13?
    A: Yes.
  • Q: Do I need to seek the approval of a judge before I file?
    A: No.
  • Q: Creditors are putting a great deal of pressure on me to pay debts.  What can I do about it?
    A: Filing bankruptcy will automatically bar them from contacting you.  You will no longer be harassed.
  • Q: If I file a chapter 13, will it be my obligation to distribute my monthly payment to each one of my creditors accordingly?
    A: No.  Your payments will go to your trustee.  It is the job of the trustee to then make sure each creditor receives what they are entitled to.  This will cause the process to be as easy as possible.
  • Q: Is the credit counseling class I have to take helpful?
    A: Yes.  It will help you learn to better balance your personal budget.
  • Q: Is it true that filing a chapter 13 might really lower the interest rate on my car?
    A: Yes.  It could potentially lower it a serious amount.
  • Q: Do I get to choose my own filing date?
    A: Yes.  Your legal counselor will advise what filing date is in your best interest.
  • Q: Is an exemption a good thing for me?
    A: Yes.  An exemption will help you retain assets and makes a chapter 13 payment lower than it would be if the exemption did not exist.
  • Q: Are there any penalties that I have to pay to the state for declaring bankruptcy?
    A: No. There are no such bankruptcy penalties.
  • Q: Will I still be able to receive child support payments owed to me if I file?
    A: Yes.
  • Q: A bill collector has filed a lawsuit in an effort to collect a debt that I owe.  Is it true that the lawsuit will come to an immediate halt once I file bankruptcy?
    A: Yes.  An automatic stay puts a halt to any such case.


Unsure of whether or not bankruptcy is right for you? Want to see if you are eligible for bankruptcy? I am ready to discuss all your options with you in a free case evaluation. Find trusted, dedicated advice today at John Steinkamp & Associates.

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