You may have more questions than answers when it comes to bankruptcy, but perhaps the foremost is the “when”. When should you actually make the big decision and file for bankruptcy? If you do file, what should you do? Let’s answer those questions.
Why Bankruptcy is Not Giving Up
First, it should be said that filing bankruptcy is far from giving up. Actually, it’s stepping up and saying you want a change. It may sound like a political statement, but filing bankruptcy is not giving up. It’s asking for a second chance. And in some cases, you may still be paying all your debts.
What is your situation?
You need to first assess your situation and start asking questions. If you have high credit card debt and you’re only making minimum payments, if creditors are harassing you every day, if you fear home foreclosure or wage garnishments, and if you’re actively considering debt consolidation methods, bankruptcy is a very smart decision to make.
Paying only the minimum on credit cards is very dangerous. You are just paying the balance, and you may never catch up. Chapter 7 bankruptcy can discharge the majority of these debts, along with other debts.
If creditors are harassing you night and day, bankruptcy isn’t your only solution, but it is a good one. If you feel you can pay back all these debts yourself then you can negotiate with creditors, as well as contacting the credit companies via letter asking them to stop the harassment (they have to by law). Chapter 13 bankruptcy may still help in this situation. Creditors will have no more reason to contacting you, you can keep your assets, and by law it can protect your home from foreclosure.
If you fear foreclosure, as just noted Chapter 13 may be your best option. Chapter 7 can discharge mortgage debt, but you will still lose the home unless you pay on it. If you’ve put a lot of time and money into this home, Chapter 13 is wise.
When should you file?
We’ve just gone over a lot about Chapter 13. In the case of foreclosure, you want to file before your creditor puts the documentation in. If you file too late, you might not be able to get the judge to put an automatic stay on the home. The smart solution is to file after you fall behind in mortgage payments, before the foreclosure begins; most banks will wait longer than one missed payment, but after several missed payment it’s dangerous territory.
Chapter 7 is different. If your main problem is you simply cannot afford debts, you can discharge these debts in months. The longer you wait, the less options you have.
In terms of what personal bankruptcy form is better, they’re both useful for different reasons. You may need expert help.
Getting Professional Help
A Texas bankruptcy attorney can help you make the decision, successfully file, and discharge debts or save your property. You should contact one before you’re in over your head.
