Bankruptcy offers individuals and families relief from spiraling debts. These debts are not always accumulated because of irresponsible spending. In fact, more than 2/3rds are due to a lost job and many are due to excessive medical expenses that have occurred because of a personal injury accident or an illness. Unfortunately, finding relief through bankruptcy is not as easy as it has been in the past. In 2005, the bankruptcy laws in the U.S. changed to make Chapter 7 bankruptcies a bit harder to obtain, thus forcing more debtors towards Chapter 13 bankruptcies. As a result, fewer Americans are filing for bankruptcy – a full 1 million less than a decade before.
At first glance, it may seem that fewer bankruptcies are a good thing, but this is not necessarily the case. Michelle White of the University of California found that the 2005 bankruptcy reform actually caused the default rate on prime mortgages to rise to 23%. Are bankruptcy laws too tough? When it’s too difficult to declare bankruptcy, individuals and families are forced to default on other loans and they are often forced to close down bank accounts and even change jobs.
Filing for bankruptcy is not the end. For many individuals, it can be the beginning of a new start on life. Individuals who obtained bankruptcy were found to earn $6,000 more in the subsequent year, than those who have been rejected for bankruptcy. When a fresh start is given, many individuals and families are able to make responsible purchases, keep up-to-date with their mortgages, and even travel. This can have a positive impact on both the economy and the housing market.
If you are struggling with overwhelming debt, you need to speak to an experienced Dripping Springs bankruptcy attorney immediately to review all of your options. Even if you own a home, a car, and other assets, there are ways you can file for bankruptcy and restructure your debt, while keeping your most valuable assets. While the bankruptcy laws have toughened, it may still be possible to find relief during this difficult time.
If you do not have many assets or if your debt is too severe, you may be able to qualify for Chapter 7 bankruptcies. In order to determine if you are eligible for this type of debt relief, you will have to take and pass a Means Test. Your bankruptcy lawyer can discuss this option with you and help you determine if you are eligible to file for Chapter 7 bankruptcy. Through Chapter 7 bankruptcy, assets are liquidated and then all of your qualifying debt is erased.
Contact Our Dripping Springs Bankruptcy Lawyers
Before you rule out bankruptcy, it is important to discuss your financial situation with an experienced Dripping Springs bankruptcy lawyer. Contact a Dripping Springs, Texas Bankruptcy Attorney at The Daniel Law Firm today at (512) 615-3569. We can help you obtain financial relief and start your life with a clean slate.