Is Bankruptcy the Last Resort or Important Tool?

Some people advise that bankruptcy should be the last resort when trying to get your finances under control. While there is certainly nothing wrong with trying other measures first before filing bankruptcy, sometimes by waiting too long, you could lose significant legal rights available to you.

Automatic Stay

It is essential that you speak to a bankruptcy lawyer if you are in danger of losing your home or vehicle. If you wait too long to file bankruptcy, you could lose these assets. A valuable tool you get as soon as you submit your bankruptcy paperwork with the court is a process called the “automatic stay.” This will benefit you by stopping all collection attempts against you. That includes repossessions, evictions, and foreclosures. Filing bankruptcy will also stop wage garnishments already in place or pending. You can also stop utility shut-offs, collectors’ phone calls, and letters by filing bankruptcy.

Cashing in Retirement Accounts

One option people consider when trying to pay down their debt on their own is to cash in their retirement accounts to pay their creditors. Depending on where you are in your work life, this could be disastrous, leaving you with little to no money to live on when you are unable to work. When you file bankruptcy, your retirement accounts are protected from creditors, keeping your future safe.

People with debt problems have the right to file bankruptcy to get financial relief. Bankruptcy prevents creditors’ collection attempts and eliminates all of your qualifying debt. So yes, you may want to attempt other actions to pay down your debt, remember waiting too long could cost you extra money and assets you could have otherwise saved.

Contact a Houston bankruptcy attorney today to find out how you can get a financial fresh start.