What Are My Options When Filing for Bankruptcy?
Most of us feel we have a moral obligation to repay what we owe, whether it is a loan from a friend or family member, bank loans for a car or house, or credit card bills racked up with consumer spending. Debt allows many to live beyond their means and leverage their income for larger purchases that they otherwise may not be able to afford. But, taking on debt also brings a great deal of risk and some individuals soon find themselves in dire straits.
Obviously, if you can continue to afford to pay your bills, then you should continue to do so. But many individuals keep trying to chip away at growing debts that they may never be able to repay and in the process, they also prolong the damage to their credit score and continue to bleed money through interest payments. The first step prior to considering filing for bankruptcy is to consider debt relief or a debt consolidation service.
However, by the time most people realize how deeply in trouble they are, it is often too late to correct, which is what leads so many to consider filing for bankruptcy. Now comes the difficult situation where one must face the harsh reality of an almost impossible situation which compels them toward bankruptcy so that they can move on.
While filing for bankruptcy should be considered a last-ditch option, it is also important to realize that it isn’t the end of the world. First and foremost, bankruptcy will stop the collection calls, lawsuits and wage garnishment. Some people think that people file for bankruptcy at the drop of a hat, but it is most often a struggle that has been building and bubbling to the surface for years, and one that lifts an incredible weight off the chests of those who file.
The two main options when filing for bankruptcy in Texas are Chapter 7 or Chapter 13 bankruptcy.
Chapter 7 bankruptcy eligibility is determined by comparing your income with the median income for a household of your size in Texas and applies most often to those with little to no disposable income. If your income is less than the median, then you are eligible to apply. If accepted, it will usually eliminate all your unsecured debt, including credit card debt, personal loans, medical bills, certain back taxes and a handful of other unsecured debts.
Chapter 13 bankruptcy is considered a reorganization bankruptcy for those with regular income and who will be able to pay back at least a portion of their debts through a repayment plan. If you earn too much to qualify for Chapter 7, then you may have no choice but to apply for Chapter 13.
Filing for bankruptcy is never an easy decision, and what’s more, it isn’t always a simple or straightforward process. It’s easy to make a mistake in the complicated paperwork or during filing, and an unintended error could be grounds for having your case dismissed. In those instances, you end up with no debt relief, but still get your credit scores badly damaged by the bankruptcy filing.
This is why it is crucial that you work with an experienced bankruptcy attorney like those at Fears Nachawati. There are important points to consider regarding eligibility, residency requirements, property requirements or exemptions, timelines to consider, and a number of other legal hoops to jump through. If you are considering filing for bankruptcy, then now is the time to get help from an experienced Austin bankruptcy lawyer.