There are certain reasons you may not want to file for bankruptcy help. If you owe a lot of money, it can be tempting, and sometimes smart. However, this guide looks at both sides of the issue – the times when you should not file and the times you should.
When Not to File
There are many sides to this issue, including those who say bankruptcy can be a good option, those who say it’s your best option, and those who say it’s your worst. The real truth is you may not want to file. Bankruptcy is not something you want to do all the time. It should only be used once, but can be used multiple times throughout your life. If you have to file multiple times, something is wrong – either with your spending or your actions. If you file because you charge up your credit cards every seven years, it can ruin your credit. If you file when you have debts that are seemingly minor, that you may be able to pay off, that’s unnecessary. If you file only to protect your home, in the state of Texas you have other options.
When filing often because you have bad spending habits, you are ruining your credit. You need to rethink how you spend money. You may want to cut down on certain buying habits, if not get some personal help. It’s nothing to be ashamed of, but can damage your life. If you file for minor reasons, remember that bankruptcy is a long term plan, and will affect your credit greatly. If you file Chapter 7, yes it can eliminate these debts, but it also hurts your credit, makes it so you cannot file again for seven years, and will take some time. In Texas, you need not always file to protect your home. Yes, a Chapter 13 bankruptcy can stop a foreclosure, but if someone other than the mortgage lender is trying to take your home, quite often you are protected by the Texas Homestead Exemption. This law makes it so residents of Texas need not worry about creditors taking their homes when owing money, and it’s a law unique to our state.
When To File
There are times when it’s smart to file. You might owe a large sum of money. You might owe an impossible medical debt or had to charge up your credit cards after losing your job; after a Chapter 7 bankruptcy, these can be eliminated. If you fall behind on your mortgage payment, you may fear a foreclosure. If you owe the lender money, they can foreclose on your home. If you file Chapter 13 bankruptcy, you can buy yourself time to catch up on payments, and use the automatic stay to halt all other collections against you.