If you have lost a primary source of income or become overwhelmed by debts and basic living expenses, consulting bankruptcy attorneys can help. Filing bankruptcy can be challenging and confusing since most people do not understand the process. An attorney can help you decide if filing for bankruptcy is the right course of action and, if so, which type of bankruptcy to file.
Consider Alternatives
First and foremost, you should understand that bankruptcy can affect your credit for up to 7 years. Because of this severity, your attorney will help you consider other options to ensure you make the right decision. Assistance and advice from the professionals will prevent you from making a bad financial decision.
For some people, making a few small changes can help gain back control of your finances. Your attorney will use your current income statements and credit reports to determine if there are viable options.
Consider Different Bankruptcy Filings
Bankruptcy attorneys will also educate you on the different types of bankruptcies and which would be the best option for your needs.
Chapter 7 is the most common form of bankruptcy since it wipes out all of your unsecured debts in a period of a few months. Since this is a liquidation type of bankruptcy, you will lose access to credit card accounts and may need to give up some of your personal property, as well.
Filing chapter 7 requires passing a means test. To wipe out these debts, your attorney must see you do not have the means to pay all or a portion of these debts.
If you are unable to pass the means test, your attorney may suggest filing chapter 13. Chapter 13 involves a repayment plan to help you pay off your total debts over a period of a few years.
Consider Exemptions
Your attorney will also discuss the process of filing exemptions if you choose to use the bankruptcy route. Each state has its own set of laws about exemptions.
In Texas, for example, you can file bankruptcy exemptions for your home, your vehicle, your retirement accounts, and pension. These exemptions allow you to save your assets or continue paying for them without using them towards your debt repayments or wiping the debts clean after filing.
Understanding bankruptcy is key to making your decision to file. With the help of experienced bankruptcy attorneys from Collins & Arnove in the Allen, TX area, you will learn if filing bankruptcy is right for you, so contact them today at 972-516-4255.
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