What You Need to Understand When Filing for Bankruptcy – Part 1
This is the first part of a two-part article on bankruptcy. Be sure to check out the second part after reading below.
Filing for bankruptcy is a difficult decision that can be hard to make. It is a legal process that allows individuals, couples, and businesses to reorganize or eliminate their debts. The purpose of bankruptcy is to provide a fresh financial start for those struggling to pay their debts.
Bankruptcy is governed by federal law and is administered by the courts. The process begins when a petition is filed with a bankruptcy court. Depending on the type of bankruptcy filed, the debtor may be able to discharge some or all of their debts.
Why You Shouldn’t Rush into Bankruptcy
Bankruptcy is a serious legal process that should not be taken lightly. It can have a lasting impact on your financial future, and the decision to file should not be taken lightly. Before you take the plunge, consider the following reasons why you shouldn’t rush into bankruptcy.
Filing for bankruptcy will have a long-term impact on your credit score as it will stay on your credit report for up to 10 years. A bankruptcy will significantly lower your credit score, and it will be difficult to get credit in the future. You won’t be able to get a loan or a mortgage for at least a few years after filing.
Another reason why you shouldn’t rush into bankruptcy is the cost. Bankruptcy is expensive and can cost thousands of dollars in lawyer’s fees and other costs. Chapter 7 bankruptcy can be as high as $2,000, and a chapter 13 bankruptcy can cost up to $3,000. Additionally, you may have to pay additional fees for credit counseling and other required courses.
Bankruptcy is also a time-consuming process that can take several months to complete. The entire process can take up to a year or more, and you will have to attend court hearings and other meetings. Additionally, you will have to provide documentation to the court, including a list of all your assets and debts.
Why You Shouldn’t Prolong Before Declaring Bankruptcy
Unfortunately, many people try to put off the process for as long as possible, but there is a better approach. Here is why you shouldn’t prolong declaring bankruptcy.
Delaying the process can lead to more financial trouble. As you put off filing, your debt can start to accumulate, leading to even more financial difficulties. Making it harder to recover from bankruptcy and can even lead to foreclosure. It can also be harder to find a way out of the financial hole you’ve dug for yourself.
Another reason why delaying bankruptcy is a bad idea is because it can affect your credit score. The longer you wait to declare bankruptcy, the more damage it can do to your credit score, making it more difficult to obtain loans and other forms of financing in the future. Additionally, it can also make it more difficult to be approved for credit cards or mortgages.
Finally, delaying the process of declaring bankruptcy can also lead to legal issues. In some cases, creditors and collection agencies may take legal action against you if you don’t file for bankruptcy as soon as possible, leading to wage garnishment, lawsuit, and even jail time.
Filing for Bankruptcy
There are many things debtors should know before filing for bankruptcy. By taking these precautions, you can ensure that the bankruptcy process goes as smoothly as possible. While bankruptcy can relieve overwhelming debt, it is not a decision to be made lightly.
If you are looking for a bankruptcy attorney in Dallas, you can hire Angela R. Owens. Specializing in debt settlement and bankruptcy, Angela R. Owens is the one to call to help you during your financial difficulties. Get in touch to learn more about what Angela R. Owens can do for you!