Bankruptcy can be a good option for many Americans struggling with financial debt. After all, bankruptcy allows you to get your finances in order, get out from crushing debt, and reset your credit rating. But, don’t declare bankruptcy without asking these questions:
1. 1. Do you know what type of bankruptcy to file? There are two types of personal bankruptcy – Chapter 7 & Chapter 13. If you have steady income and assets that you would like to keep, then a Chapter 13 is the right bankruptcy for you. A Chapter 13 bankruptcy will allow you to restructure and reorganize your debt so that you can pay off specific debts, while others are discharged. If you have very few assets, then Chapter 7 bankruptcy may be the better option. In Chapter 7 bankruptcy, you are allowed to sell all assets, except exempt ones and then your debts are discharged.
2. 2. Will it help you get back on track? It is important to know that not all debts are dischargeable in bankruptcy. Student loan debts, child-support payments, and alimony cannot be discharged in either Chapter 7 or Chapter 13 bankruptcies. If declaring bankruptcy isn’t going to erase the majority of your debts, then bankruptcy may not be for you.
3. 3. Do you qualify for bankruptcy? Not everyone can qualify to file bankruptcy. If you wish to file a Chapter 7 bankruptcy, you must pass the means test. This test is based on your disposable income. The higher your income, the less likely you are to be eligible for Chapter 7 bankruptcy. An experienced bankruptcy attorney can help you determine if you are eligible to file for bankruptcy.
4. 4. Do you understand the effects of filing bankruptcy? Filing for bankruptcy may be the best option for getting out of debt. Yet, there are some lingering effects. Declaring bankruptcy will stay on your credit report for 10 years and can affect your ability to obtain a loan, an apartment, and even insurance. However, not addressing your debt or falling behind on your bills can have an even worse effect on your credit rating and your ability to obtain a mortgage or loan.
5. 5. Do you know whom to call when you are ready to file bankruptcy? Before you filed for bankruptcy, it is important to speak to an experienced bankruptcy attorney. Your bankruptcy attorney can help you review your debts and your assets to determine if you qualify for bankruptcy. Even if you do not qualify, your bankruptcy attorney can still help you review all of your options so that you can get back on the road to financial freedom.
Contact Our Dripping Springs Bankruptcy Attorneys
If you are struggling with overwhelming debt, it is important to speak to an experienced Dripping Springs bankruptcy attorney immediately. Contact a Dripping Springs, Texas Bankruptcy Attorney at The Daniel Law Firm today at (512) 615-3569.