If you struggle with staggering debt and cannot meet your financial obligations, filing a bankruptcy can be the only option. You will be able to eliminate your financial or business debts through bankruptcy and handle creditors. Bankruptcy will eventually help an individual to reconstruct their credit and solve financial problems.
Therefore, it is essential to know some things before filing for bankruptcy and discuss with a bankruptcy lawyer in Katy. After discussing, your attorney will recommend the type of bankruptcy most suitable for you.
Things to keep in mind before filing for bankruptcy
When you are experiencing financial struggle, you are ready to do anything to remove the pressure from your shoulders. Here are a few tips to remember when filing for bankruptcy.
Take time and do not hurry into filing for bankruptcy.
Bankruptcy is a good idea to wipe out debts, but do not rush for it. Explore if the present is an excellent time to file or maybe in the future. While you wait, you might also face several financial problems; for example, if you suffer from a disease or illness that accumulates medical debt, you will probably hold it until you become fit again. Also, keep in mind other problems like unemployment, car repossession, eviction, etc.
The bankruptcy process takes longer than you think.
Bankruptcy cannot be the only necessary option to end your financial issues. The chapter 7 bankruptcy can take up to five to six months to complete fully.
Even chapter 13 bankruptcy can take much longer. The bankruptcy plan has to be approved by the bankruptcy court in the process. For some time, you can keep some of your property, like a car or home, to make payments under chapter 13 bankruptcy. A chapter 13 bankruptcy can take up to five years.
Avoid draining your retirement account.
In bankruptcy, you can protect all of your retirement funds. But unfortunately, some people make the financial mistake of withdrawing the retirement funds to pay the debt that bankruptcy can wipe out. Speak to your attorney before taking such a big step.
Do not move or hide assets.
When bankruptcy schedules ask to provide information about your assets, some people try to transfer, sell or hide them before filing bankruptcy. Do not ever do this. Hiding or selling assets are considered criminal penalties, and the risk is worth any perceived reward.
Always remember that the timeline to file for bankruptcy is limited. You can file chapter 7 bankruptcy once every eight years. At the same time, you can file chapter 13 bankruptcy once every six years.