There are certain words in the English language that are typically associated with negative stigmas. Bankruptcy is one of those words. How much do you know about it? The first question to ask yourself is whether you really know anything about it, as in actual facts, or you simply have heard some things from others, most of which were negative. Have you heard, for instance, that filing for bankruptcy in Texas means you are entering financial ruin?
Maybe people told you that you’ll never be able to restore financial stability or get a loan if you seek this form of debt relief. You might have also heard that filing for Chapter 7 or Chapter 13 becomes part of your credit history and will always be on your financial record. If this is the type of information you have received regarding bankruptcy, then you have been misguided.
Causes of debt
There are many possible reasons you might currently be facing financial problems. Perhaps, like many other people in Texas, you have medical bills and have used your credit card to pay them. Maybe you incurred an unexpected reduction of income. Did you recently learn that one of your children needs braces? These and many other issues can throw your financial train off its tracks.
It is important to analyze the cause of your debt because doing so can help you determine if you have the immediate resources to resolve the problem on your own or if reaching out for additional support might be better.
To file or not to file
If you are only a few thousand dollars in debt, have a good job and can foresee that you’ll be able to be debt free in a few months by setting a certain amount aside from each pay check, then you might not be the typical type of candidate who would be best served by filing for bankruptcy.
However, if creditors are calling you every day and your credit card balance keeps going up but you have no way to pay it down, or if the money you owe is more than the income you’re earning, you might want to consider debt relief options such as bankruptcy.
It is true that bankruptcy will appear on your credit report for some time; however, it will not remain there permanently. In fact, this type of debt relief can have many advantages, such as helping you avoid foreclosure on your home or retaining ownership of a business.
If you petition a Texas court for Chapter 7 bankruptcy, it would likely lead to a liquidation of all your assets. Many people say that converting their assets into funds to pay off debt helped them restore financial stability down the line.
You must be eligible to file for the type of bankruptcy you choose. Regarding Chapter 7 and Chapter 13, there are income specifications. If you earn at or below a certain level compared to the average income in Texas, you might qualify for Chapter 7. If, on the other hand, you earn more than the mean income in the state and you can show that you have reliable employment, you may opt instead for an alternative repayment plan that your lenders would need to approve.
Accomplishing your goals
The good news is that most financial crises are temporary. Knowing what types of options are available to help you overcome a particular problem is a key factor toward accomplishing your ultimate financial goals.