What Is Bankruptcy?
Bankruptcy is a system of federal laws that allows an individual or business to get relief from debts, allowing them to make a new financial start. These laws were created to help the honest but unfortunate debtor begin a new future without the pressure from creditors trying to collect pre-existing debts. If you have been toiling with finances, it is important to meet with an experienced Arlington, TX bankruptcy lawyer that can help guide you on the options.
When trying to decide if you should file for bankruptcy, you should contact a professional lawyer that is able to help. A skilled bankruptcy lawyer from Arlington, TX may suggest that before filing for bankruptcy you should:
- Get your finances in order;
- Speak to your lawyer to find out which debts won’t be forgiven; and
- Assess what would be affected if you do file for bankruptcy.
Types of Bankruptcy
An experienced Arlington bankruptcy lawyer from Brandy Austin Law Firm, PLLC. may explain that the most common types of bankruptcy are called chapter 7 and chapter 13:
This type of bankruptcy liquidates all of your nonexempt assets to help pay off as much debt as possible. Some common reasons for choosing this route is because of unemployment, large medical expenses, overextended credit, and marital problems. Once your assets are sold, the money is then distributed to creditors such as banks and credit card companies. It is important to speak with a trusted Arlington, TX bankruptcy lawyer before choosing this option because it is not right for everyone. Nearly all of the individual’s assets are taken and sold to help pay off the debt, if you own a company, a house, or any other assets you want to keep, chapter 7 may not be the most appropriate choice. However, chapter 7 does offer a quick fresh start for many people.
This form of bankruptcy is able to reorganize your debt using a repayment plan. Typically, this plan is useful for those wanting to keep property or other assets. When the repayment plan is organized individuals have a three to five-year period to pay off their debts. If the debtor has consistent annual income, chapter 13 offers a grace period. Any debt remaining at the end of the grace period is discharged.
In either case, contacting an Arlington, TX bankruptcy lawyer may be able to help you decide which bankruptcy chapter is suitable for your situation.
What Are the Benefits to Filing for Bankruptcy?
Many people who file for bankruptcy are embarrassed and uncomfortable to go through the process. The truth is that bankruptcy is more common than you may realize. According to data collected by the Judiciary Data and Analysis Office (JDAO), there are approximately 800,000 personal bankruptcy filings each year in this country. Approximately 500,000 people file Chapter 7 and 300,000 people file Chapter 13.
Rather than being embarrassed, bankruptcy filers should think of filling as a new beginning. The constant barrage of phone calls and letters from creditors looking for money will end, and you can begin anew.
At Brandy Austin Law Firm, PLLC, we are dedicated to assisting clients with those new beginnings. When you meet with one of the Arlington, TX bankruptcy lawyers from our firm, he or she will carefully go over your situation and decide which option is more beneficial for your situation. Your attorney will explain the pros and cons of each type and what the result will be for you. Contact our office today to set up a free consultation to find out how we can help.
Rebuild Your Credit
People who file for bankruptcy usually have a low credit score due to the amount of debt they may have and the number of late payments to creditors. Although a bankruptcy will sit on your credit report for between seven to 10 years (determined by the type of bankruptcy you file), many filers find that they are able to obtain credit shortly after their bankruptcy is completed. Credit card companies will send filers offers to apply for their card and even mortgage companies are willing to work with a bankruptcy filer within a year or so.
Having your debt discharged lets you start with a clean slate and allows you to reestablish credit. Staying in the same situation, always struggling, will just keep adding late payments to your credit report and never let you rebuild.
One important thing to keep in mind, however, is that even though credit card companies may be ready to give you credit, you want to make sure that you do not get caught up in the credit trap, charging for luxury items and quickly finding yourself back in debt again. Financial advisors often advise people who have filed for bankruptcy to not purchase an item unless they pay for it in cash, as long as it does not interfere with you paying for any other financial obligations.
When to File
Unfortunately, many people who find themselves struggling with financial difficulties wait and wait before taking any action. Maybe it is because they hope that something will happen that will turn things around. Or they may just not want to face the overwhelming issues that need to be dealt with. Whatever the reason, it is important to know that you do have options that can solve these difficulties. The sooner you meet with a bankruptcy attorney, the sooner you can begin rebuilding your credit and start feeling positive about finances again.
Get a Fresh Start, Call Brandy Austin Law Firm, PLLC
Bankruptcy cases are often rife with challenges and unique circumstances. You should have the best Arlington, TX bankruptcy lawyer on your side. Call Brandy Austin Law Firm, PLLC, now.