Benefits of Declaring Bankruptcy 

 Posted on March 05, 2025 in Bankruptcy

Bankruptcy can sometimes get a bad reputation. Some people have a perception that it is a negative process that will destroy your credit and that only irresponsible people file for bankruptcy. These misconceptions are not accurate; hard financial times can happen to anyone, triggering a buildup of debt that is impossible to get out from under.

The truth is that these negative ideas about bankruptcy can hurt individuals and families who would otherwise turn to bankruptcy as a way to get a fresh financial start and clear their debts. To counter that viewpoint, it can be helpful to understand some of the benefits of filing for bankruptcy that can make your life better in bankruptcy and beyond. Discussing these concerns with an experienced Dallas, TX bankruptcy attorney can help. 

You Get to Keep Your Assets

Certain important assets are exempt from bankruptcy, meaning that they do not become part of the bankruptcy estate and you get to keep them. In fact, Texas has one of the most generous bankruptcy exemptions, including a homestead exemption that allows you to keep unlimited equity in your home in certain circumstances. If you file for bankruptcy in Texas, you will likely also get to keep your car and other personal property. 

Debt Relief

This is among the main reasons people file for bankruptcy in the first place – to get relief from overwhelming debt. The specifics of the debt that can be discharged or legally erased in bankruptcy varies depending on the bankruptcy chapter which you file (usually either Chapter 7 or Chapter 13), but in general, bankruptcy provides debtors with relief from debt, whether that is through discharge or via a realistic repayment plan. 

Protection from Creditor Harassment

When you file bankruptcy, creditors are legally required to stop collection calls and most other debt enforcement including repossession and foreclosure. This is thanks to what is called the bankruptcy automatic stay, which goes into effect when you file for bankruptcy and stays or pauses most creditor collection efforts. The stress reduction impact this can have cannot be overstated as a benefit of bankruptcy. 

Improved Credit Score 

While it is true that a bankruptcy filing can remain on your credit report for seven to ten years, filing for bankruptcy can sometimes actually help you improve your credit score. This is especially true if you have a low credit score, which is usually when you file for bankruptcy. Additionally, bankruptcy filers are required to complete credit counseling and debtor education. These can enhance financial planning skills, leading to more on-time payments and higher credit scores. 

Call a Dallas, TX Bankruptcy Attorney

If you face mounting debt, let the experienced Fort Worth, TX bankruptcy attorneys at Acker Warren P.C. represent you in your bankruptcy proceedings. We pride ourselves on giving personalized service to our clients and are here to answer any questions about life post-bankruptcy. Call our offices for a complimentary consultation at 817-752-9033.