Bankruptcy is a life changing event, and it should be for the better. You can save money on debts. You can protect your home, or buy time to get a new residence. You can stop creditor harassment. You can protect your income from wage garnishment.
Bankruptcy is not easy. It requires time, patience, honesty, and most importantly, study. With the tips in this guide you can be free of most debt – and protect your assets – in a matter of months.
Get an Experienced Lawyer
If you are going to file bankruptcy, hire a lawyer. Hire a lawyer because he or she can explain how the process works. Are you eligible? What debts can you discharge? How you can protect assets like your home and car? What if you’re not eligible for Chapter 7? Is Chapter 13 bankruptcy better for you? A lawyer answers your questions, protects your legal rights, protects your income, and protects your assets.
Find Out All Your Debts
You can find out about your debts via a credit report. You may not know what is all on your record. You want to discharge the most debt with your Chapter 7 bankruptcy. Therefore, find your credit report – it can be scary to look at it, but hang in there – and see if all the debts are there and correct. You may be surprised that some paid debts are on your credit report; this does happen, and you can have them removed.
Where can you get your credit report? According to the FTC, you can get your credit report for free at annualcreditreport.com. This is a listing of all three national creditors.
What do you want to keep?
If you want to keep an asset, you must list it in your bankruptcy. If you try to hide an asset – some filers try to save a home or car – you are in danger of losing the ability to file at all. Simply filing Texas Chapter 7 bankruptcy does not mean you will lose everything. Most of us lose little to nothing when filing Chapter 7. You may have a home or property, a car, some valuable jewelry, an expensive TV, etc, and think this will be taken. Since Chapter 7 is called a “liquidation,” where you pay off debts but stand to lose assets, this thought is understandable.
However, if you can keep up on payments outside your bankruptcy, you have many protections. For example, the homestead exemption can protect your home from creditors (but not the government or your lender). Also, you can negotiate outside the bankruptcy, perhaps continuing to pay your car payments, and be fine. If you have bought in excess prior to the bankruptcy, these debts can be considered outside of it, so don’t run up your card. You do not want to start some bad buying habits, thinking it will be discharged; there are laws against this.
File for Effect
When you file, file at the right time. This means you file when you have the most debts. You may also want to include your mortgage and car in the bankruptcy – which would mean losing them – because you cannot afford the debts. You have many more options than you might think. Wait for the high hospital bill to come in, for the high credit card bill to arrive, and then, when your bankruptcy can best discharge your debts, file.
Discharge Debt
It typically only takes 3-4 months to file a Chapter 7 bankruptcy. You can discharge the medical debt, the credit card debt, stop creditor harassment,and finally get a fresh start.
