While some people seem naturally proficient at handling their finances, managing financial obligations can be a difficult task that requires practice for many others. Even those naturally skilled with money can find themselves running into financial difficulties after experiencing life’s many unexpected challenges. Responsibilities like a mortgage, auto loan, credit cards, medical debt, and more are easy to take on but difficult to manage. For many people, putting off bankruptcy is a way of saying, “I can fix this myself,” but the harsh reality is that some financial issues cannot be fixed on your own. In some instances, the path to financial freedom begins with a bankruptcy filing.
When this happens, it is crucial to seek the advice of a Cleburne bankruptcy lawyer. The experienced attorneys at Steele Law Firm can help you understand your options and make informed decisions about your next steps to relieve financial hardship. If you are considering filing for bankruptcy protection in Texas, contact Steele Law Firm for bankruptcy attorney services. We can help you ensure you are making a sound, legal decision about your financial future.
Before you file bankruptcy, it’s important to understand what bankruptcy will and will not do for you. One of the most frequent questions our clients ask is if bankruptcy will have a lifelong negative impact on their credit. This common myth is harmful, as it can lead people to make additional risky financial decisions to “save” their credit. Some may pursue car title or payday loans to get access to instant cash. When they cannot repay these predatory lenders, their credit score worsens, and it becomes more difficult to access traditional forms of credit.
It is important to know that filing for bankruptcy will not destroy your credit. After filing, it typically takes about two years to see some improvement in your credit score. Once our clients can see past the misconceptions about bankruptcy, they are relieved to access a long-term solution for debt relief. Utilizing the power of bankruptcy can accelerate the path to financial freedom.
When filing for bankruptcy in Texas, it is important to understand that there are multiple different types of bankruptcies. Chapter 7 and Chapter 13 bankruptcies are most commonly used by individuals.
Chapter 7 is known as a liquidation bankruptcy. This type of bankruptcy requires the debtor to hand over all nonexempt or secured assets so they can be sold (liquidated). The proceeds are then distributed to creditors to fulfill the debtor’s obligations. However, since some types of unsecured debts can be eliminated with a Chapter 7 bankruptcy, the state of Texas must determine your eligibility. If your household income is above the Texas median for your household size, you must submit to a means test to see if you qualify for Chapter 7 bankruptcy.
Chapter 13 is a reorganization bankruptcy. Chapter 13 bankruptcy requires you to make payments to a trustee each month for three to five years. At the end of that period, remaining unsecured debts may be discharged, and secured debts may be significantly reduced. Chapter 13 can be a great option if you are able to commit to monthly payments for three to five years. After successfully completing your Chapter 13 repayment period, you are given a fresh start with a clean slate.
In some cases, a debtor may qualify for Chapter 11 bankruptcy. This type of bankruptcy is generally reserved for businesses and individuals who have substantial amounts of debt. The debtor usually remains in control of their business and attempts to negotiate more favorable terms with creditors. Sometimes Chapter 11 bankruptcy can be a way to keep your business running and restructure debt.
Another question we are frequently asked is, “What papers do I need to file for bankruptcy?” Fortunately, with an attorney’s help, the paperwork necessary to file a bankruptcy can be streamlined. Depending on the type of bankruptcy, most people only need to file a bankruptcy petition, income and expense forms, and in some cases, a statement of current monthly income. If you are filing for Chapter 7 bankruptcy, you will also need to file a list of your creditors and the amounts owed.
After you contact our office, an experienced Cleburne bankruptcy lawyer will meet with you to discuss your case. At that time, we can offer you further guidance about the documents that need to be filed and other details of your case.
When you are dealing with a loss of income or financial hardship, it is understandable to want to resolve your debt problems on your own. However, whether you attempt this through bankruptcy or alternatives to bankruptcy, this is often not a wise decision. Many people don’t understand the process necessary to achieve bankruptcy—it’s not always as simple as filing and walking away.
For example, if you file for bankruptcy without the help of an experienced bankruptcy lawyer, your case could be dismissed due to inconsistencies in your paperwork. Another common mistake people make is filing for the wrong type of bankruptcy. For example, if you file for Chapter 13 when you should have filed for Chapter 7, you could end up with a court-appointed trustee managing your case. The trustee may have other plans for your nonexempt property and could force you to repay some of your debt you otherwise would not have paid.
The bankruptcy process can be complicated and intimidating, but our experienced attorneys can help you make sense of it. We will walk you through each step, thoroughly discuss the necessary paperwork, and help you determine which type of bankruptcy is best for your financial situation.
The consequences of filing for bankruptcy without the help of an experienced attorney can be severe. If you don’t understand the bankruptcy filing process or your rights are as a debtor, you could be throwing away assets or risking deeper financial trouble.
To learn more about your bankruptcy options, don’t hesitate to contact Steele Law Firm today and consult with a skilled Cleburne bankruptcy lawyer. The sooner we get started working on your case, the better we can protect your rights and financial interests. Don’t let unfiled and incorrect bankruptcy petitions ruin your financial security. Contact us today to accelerate the journey towards your fresh start.