Bankruptcy is not always your best option; you have alternatives. Texas bankruptcy does give you many protections, such as the homestead exemption protecting your home during a bankruptcy. However, sometimes the debt is too small to discharge, or you are not eligible. You do have other options, so let’s go over them.
Downfalls of Debt Counseling, Benefits of Negotiation
You can negotiate with creditors to lower payments, interest, and sometimes even the sum of the debt. You can do this yourself, or you can use what’s called debt counseling. When using debt counseling, you will get help negotiating with creditors and making more affordable payments. However, if you filed Chapter 13 bankruptcy instead, you’d have more legal protection. And debt counseling agencies are not all equally skilled and knowledgeable: you may be able to do everything yourself. Some ignore the fact they can negotiate themselves, that debt counseling agencies have no secrets. You can make some phone calls and create a debt repayment plan. If you have no way of paying these debts, it’s pointless, so you may consider Chapter 7 bankruptcy.
Creditor Harassment
If you feel you can pay off these debts, you may not need to file bankruptcy nor negotiate on payments. However, you may get sick of constant phone calls on past due payments. There are rules to help you, such as the fact a creditor cannot call you earlier than 8AM and later than 9PM. But you can stop the problem at its source by writing a letter to the creditors and explain you want no more contact; by law they have to stop contacting you, no matter if the bill is due or not.
While bankruptcy can do all this, it’s designed for discharging high debts and protecting property. If you have minor debts and can pay them off yourself over a few months to a few years, consider stopping the harassment and setting up your own plan.
The Do Nothing Approach
This may sound odd, but you can actually find success by doing little to nothing on your debts. A warning: if you have any income or anything of value, it’s dangerous. The “do nothing” approach works if you stand to lose nothing, which is rare, because most of us have something to lose. If you are unemployed, have little income, and own no property or car, you may lose nothing.
When is bankruptcy better?
Chapter 7 bankruptcy discharges your main debts in a matter of months, though you stand to lose some assets. Chapter 7 is smart if you have impossible debts, especially unsecured debts like credit and medical bills.
Chapter 13, on the other hand, works well if you want to protect property. Sometimes you are not eligible for Chapter 7, but often Chapter 13 is still an option. If you own a home, for example, and fear foreclosure, a Chapter 13 repayment plan can protect it. The laws are designed to protect you. Contact an experienced bankruptcy attorney to find out more.
