Debt problems can cause many a sleepless night. So why then is there so much fear surrounding bankruptcy? Unwarranted fear of bankruptcy causing worse problems is, in many situations, misplaced and unhelpful. At worst, the fear of bankruptcy can prevent hardworking, dedicated people from getting the debt help that they desperately need. Today we’ll debunk several such unnecessary reasons to fear and why they shouldn’t stand in the way of your financial progress.
Bankruptcy will Not Ruin Your Credit Forever
While it’s also true that filing bankruptcy does stay on your credit score for some time and may cause a drop in your score, it’s certainly no worse than having late payment after late payment, charge-offs, or collection items miring your score. It’s not uncommon for individuals fresh out of Chapter 7 or Chapter 11 bankruptcy to obtain a line of credit. Additionally, the US Bankruptcy Code is designed to allow you to reaffirm debt attached to your home or vehicle that will allow you to continue making payments, and as long as they are on time, this will help boost your score. At the end of the day, filing a Texas bankruptcy will allow you to show potential lenders that you have taken steps to fix your past debt problems, as well as, getting you into a stronger financial position to eliminate your debt.
You Won’t Lose All Your Property
Want to keep your car? Your house? You tools? You can keep most or all of your belongings (depending on what you own) in a bankruptcy by utilizing the Texas bankruptcy exemptions outlined by the US and Texas Bankruptcy Codes. Bankruptcy exemptions allow you to keep your home, automobile, tools of the trade, and other types of personal property up to a certain value out of the “bankruptcy estate”. Only property placed into the bankruptcy estate is at risk of being liquidated in Chapter 7 bankruptcy. In Chapter 13 bankruptcy, you can keep nearly all your belongings and real property, although it may increase the total monthly repayment amount you make. Talk to your bankruptcy attorney if you are worried about keeping any particular possession in bankruptcy.
You Won’t Get “Grilled” in Court
It’s very seldom that a debtor actually has to go in front of a judge to explain why they went broke. When filled out properly, your bankruptcy petition and supporting “schedules” explain your entire financial situation, including how much you own, how much debt you have, and what you currently earn from your business or job. You simply need to meet with your assigned bankruptcy trustee and answer any questions they may have about anything that looks abnormal. Assuming that there are no other legal questions surrounding your money, you’ll never have to go to court in the traditional sense. Additionally, by hiring a Houston bankruptcy attorney you will know exactly what to expect from the bankruptcy process, which will remove the fear surrounding any uncertainty from the process.
Fear of Filing Bankruptcy
Fear of filing bankruptcy ultimately derives from two things: a lack of understanding of the overall bankruptcy process and the aforementioned uncertainty of the outcome. By hiring a Houston bankruptcy lawyer and familiarizing yourself with the bankruptcy procedures, you’ll be well equipped to fight the fear that derives from considering filing and to tackle your debt with confidence. Contact a local bankruptcy attorney today to discuss your options and where to obtain credit counseling.