Why File for Bankruptcy?

When financial troubles become a serious problem, most people hesitate to consider bankruptcy as a possible solution for a variety of reasons. For some, it is the social stigma attached to filing for bankruptcy that causes them to hesitate. For others, concerns about how bankruptcy will impact their future ability to finance purchases and/or how a bankruptcy filing will affect their credit rating cause them to avoid considering bankruptcy as an option. In the end, many of these people do end up filing bankruptcy but not before wasting valuable time and money first. If you are facing financial problems, you owe it to yourself and your family to consider bankruptcy now so you can avoid making these mistakes. Why file for bankruptcy? There are a number of good reasons once you understand more about the process and the benefits.

Bankruptcy is a legal, and legitimate, option for debtors who are facing insurmountable debts. Unlike the days of old when people went to prison for non-payment of debts, current bankruptcy laws allow you to wipe your financial slate clean and start over again if you are struggling financially. Hardworking people all across the country turn to bankruptcy every day to help them get out of a financial hole that seems to keep getting deeper and deeper. The vast majority of clients with financial challenges file a Chapter 7 bankruptcy which discharges virtually all of their debt and lets them obtain a fresh financial start. In Chapter 7, we work on modifying their home loans to make them more affordable. Most clients qualify for replacement vehicles either during or immediately after their Chapter 7 discharge. A Chapter 7 case lasts approximately three months, from filing to discharge, and there are no wage garnishments in Chapter 7. Clients are elated with their financial fresh start that is obtained so quickly.

Chapter 13 is another type of bankruptcy, but one that we rarely recommend. It involves a three to five years wage garnishment repayment plan. Chapter 13 is useful in some instances, but we are usually able to help my clients with the much more favorable Chapter 7 option. If you live in Central Texas and have been told that you need to file a Chapter 13 case in order to address your financial problems, please see me for a second opinion before your case is filed!

If concerns about your future creditworthiness are holding you back from considering bankruptcy, talk to an experienced Texas bankruptcy attorney. Since the vast majority of clients file the three-month Chapter 7 option, clients’ credit scores begin to rise after the Chapter 7 discharge is received. This is another reason why Chapter 7 is preferable over a Chapter 13 filing. Since a Chapter 13 case lasts from three to five years, you can not begin to rebuild your credit until your three to five-year garnishment repayment plan is concluded.

Finally, if you are concerned about the social stigma, consider this – over one million bankruptcy¬†cases were filed last year in the United States. Chances are that more friends, colleagues, and neighbors have been in your position than you realize. Talk to an attorney about the benefits of filing bankruptcy and about any concerns you may have so that you can make an informed decision before wasting time and money on alternatives that don’t truly solve your problems in the long run.

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