The new year is upon us and you may have spent more than you should have. Maybe you spent little because you had nothing. Maybe you were just scared of spending too much because your job is in jeopardy. Bankruptcy is always an option, but not always your best option. Sometimes you may want to consider other options. This blog guide will help you decide.
When Not to File Bankruptcy
Bankruptcy is not always your best option. Sometimes you may consider tapping into your savings and paying off the debt. Sometimes you may consider using 401K money. You might even consider selling certain items you own, like a car, second home, or other valuable item. If you owe a few weeks worth of pay, you do not want to file bankruptcy. But if you owe monies you cannot pay off for a year or more, bankruptcy is a good option. You cannot file bankruptcy every year. You can file Chapter 7 bankruptcy, for example, every seven years. So you want to use it correctly.
When to File Bankruptcy
As noted, there are some reasons not to file bankruptcy, but sometimes it’s the best option. Instead of losing your home, instead of tapping into all your savings, instead of using debt management, you can file for Chapter 7 or Chapter 13 bankruptcy. If you owe more than you make in one year, you should consider bankruptcy help. If you owe a few months worth of pay, you might consult with a lawyer. No situation is exactly the same.
What Form of Bankruptcy
If you file Chapter 7 bankruptcy, you can erase a lot of your unsecured debts. If you cannot keep up with your mortgage, you can consider filing Chapter 13 bankruptcy. Chapter 7 bankruptcy can erase credit card, medical, and even mortgage debts. So if you owe $50,000 in credit card debts, you may consider Chapter 7 bankruptcy, which can help you get a fresh start. If you owe on secured debts, such as your home and car, you can still discharge them with Chapter 7 bankruptcy. If you want to keep your home and car, it may be better with Chapter 13. However, creditors cannot take your home in Texas if you owe money money. The Texas Homestead Exemption is unique in that no creditor can take your home for owing money. You may owe creditors $60,000, but with this exemption they cannot take your home. The only entity who can take your home is the bank, the ones with the mortgage.
Where to Start
If you are ready to get started with Texas bankruptcy, you need to consult with an experienced bankruptcy lawyer. You should have a lawyer you can afford, usually at about $1,000 to $2,000.