If you are in financial turmoil, where you are unable to pay your creditors and have no other way out, bankruptcy could be an option. Bankruptcy is a form of debt relief and depending on your circumstances, you can either file for Chapter 7 bankruptcy, also called liquidation, or Chapter 13, which allows you to create a reorganization plan. If you want to file for bankruptcy in Katy, it is wise and important to know everything in depth, and it makes sense to talk to an experienced bankruptcy attorney in this regard. In this post, we are sharing more about filing for bankruptcy and facts worth knowing.
Circumstances for declaring bankruptcy
Just because you are unable to pay a few debts doesn’t mean bankruptcy is the last choice for you. You may consider declaring bankruptcy if your wages are being garnished, or you are unable to meet your financial obligations. If you are facing a lawsuit for unpaid debts and loans or have been receiving countless calls, talking to a bankruptcy lawyer would help. Many people often end up having more debt than what they can repay, and in such circumstances, hiring a lawyer may be a wise idea.
Things to know
Bankruptcy can help in wiping out most of your debts, depending on your financial situation, but there are also exceptions to this. For instance, you cannot get away with student loans, fines, and court costs. There are some advantages of bankruptcy that cannot be overlooked. First and foremost, you can have a clean slate, which allows you to work on your financial position better. However, filing for bankruptcy also means that it would feature in your credit report for at least seven years, so getting a mortgage or loan wouldn’t be easy. Also, you may lose out on your credit cards, and even if a company offers you an unsecured credit card, the interest rate and annual fees are likely to be huge.
Figuring out the options
A bankruptcy attorney is your best bet at knowing your options. Ideally, bankruptcy should be your last resort, but having said that, some options such as debt consolidation may not work at times. Talk to your attorney in-depth to know what is ideal for your current financial situation. Personal bankruptcy can be done within a period of months, and once bankruptcy has been initiated, there is an automatic stop to proceedings initiated by creditors, which could be an advantage.