Most individuals or businesses that qualify for bankruptcy fail to avail themselves of its potential benefits. Filing for bankruptcy can affect your personal finances for several years, but it is the best option to manage your secured debts. Nonetheless, each individual’s financial circumstances are unique to their financial situation – when you file bankruptcy, you are required to fill out formal bankruptcy paperwork to look at your financial situation comprehensively.
Opting whether, when, and how to file for bankruptcy can be an intimidating process. However, you should not be discouraged. There are several benefits of filing for bankruptcy, and this article strives to discuss it more.
Pros and Cons of filing for bankruptcy in Arlington, TX
When faced with many unsecured debts, the pressure from debt collectors and creditors can overwhelm you. Luckily, bankruptcy laws exist to help you develop a debt payment plan and get a fresh financial start. An automatic stay will be initiated when you file for bankruptcy, immediately stopping creditors and any debt collection activity. While getting a fresh financial start may seem appealing, there are pros and cons of filing for bankruptcy in Arlington, TX.
Pros of filing bankruptcy
- An automatic stay against creditors. After filing for bankruptcy, the federal bankruptcy court issues an automatic stay against creditors and all debt collection activity. It does not essentially cancel your debt but instead suspends any debt collection proceedings until the completion of the bankruptcy case. Bankruptcy laws hinder you from experiencing lawsuits on unsecured debts, home mortgage foreclosure, calls from creditors and debt collectors, property or real estate repossession, and wage garnishment.
- Eliminated or discharged debts. When you file for bankruptcy, you may be able to discharge or cancel your responsibility to repay personal loans, credit card debt, utility, and medical bills.
- Impact on credit score. Tanked credit rankings delay most individuals and businesses in filing for bankruptcy. A bankruptcy filing remains on your credit report for 7-10 years. Most debtors who file for bankruptcy start improving their credit scores. Once your discharged assets are canceled, you can move forward with a fresh start and begin rebuilding your credit.
- Bankruptcy exemptions may allow you to maintain ownership of your property or real estate. Federal exemptions imply that you need not worry about your assets being seized in the bankruptcy process. Exempt property can be used to pay medical debt, student loans, child support, mortgage payments, or any other unsecured or secured debts you have. Thus, a debtor is allowed to keep all exempt property. Asset exemptions are significant in chapter 7 bankruptcy and chapter 13 bankruptcy. Some asset exemptions apply to particular assets, such as a wedding ring or car, whereas others apply to your property or real estate.
Nevertheless, filing for bankruptcy when you should not aggravate a bad financial situation. Filing a bankruptcy petition too early can also mean losing property or real estate that you may have been able to keep. Regardless, even when filing for bankruptcy is your best option, it also has real lasting effects on your personal finances that should be considered before filing.
Cons of filing bankruptcy
- Non-dischargeable debts. Specific debts cannot be discharged by bankruptcy: criminal restitution and fines, alimony and child support, student loans, and other fraudulent debts.
- Denial of tax refunds. Federal, state, and local tax refunds can be denied after filing for bankruptcy.
- Loss of property or real estate. Sometimes, your property or real estate may not fit under an asset exemption. Thus, the bankruptcy court could seize them and sell them to pay your creditors.
- Immediate impact on your credit score. When you file for bankruptcy, obtaining a loan or making mortgage payments can be challenging for several years. Moreover, it may be difficult to recover from a job loss, purchase a home, get a car loan, or obtain life insurance as the bankruptcy petition stays on your credit report for a decade.
- Loss of credit cards. Most credit companies automatically cancel any credit cards you hold when you file for bankruptcy. Multiple offers to apply for unsecured credit cards may come your way after the bankruptcy petition filing process. You can rebuild your credit through this. However, they need high-interest rates and annual fees.
Choosing whether to file for bankruptcy or not depends on your unique financial situation. Consult our skilled and experienced bankruptcy attorneys at Machi Law Firm for legal advice. With the established attorney-client relationship we have, we can handle your bankruptcy case on time.
Consult a bankruptcy lawyer in Arlington, TX
Filing bankruptcy helps relieve you of any unsecured debt, student loans, mortgages, and other debts. Consulting a bankruptcy lawyer in Arlington, TX, can help give you the peace of mind that comes with making an informed decision regarding your future. The professional and experienced legal team at The Machi Law Firm takes great pride in assisting clients to know why bankruptcy is or is not the ideal probable debt relief option uniquely available to them.
Contact our experienced bankruptcy attorneys at Machi Law Firm for legal advice. Schedule a free consultation with our skilled Texas bankruptcy attorney or lawyer to discuss your financial situation and how bankruptcy could impact it.
What does the bankruptcy process involve?
To file bankruptcy in Arlington, TX, you need careful preparation. Hire a bankruptcy lawyer, develop a payment plan, and follow the bankruptcy filing guidelines in a bankruptcy court. An experienced Texas bankruptcy lawyer can be invaluable. The federal courts require you to take a credit counseling course then prove eligibility.
A bankruptcy lawyer from Machi Law Firm can help show whether you are eligible for a chapter 7 bankruptcy or chapter 13 bankruptcy. If you have substantial unsecured and secured debts, you may not qualify for chapter 13 bankruptcy. Thus, a bankruptcy lawyer in Arlington, TX, can come in handy.
Our skilled bankruptcy attorneys can walk you through the entire bankruptcy process for a very nominal fee. Furthermore, you will enjoy the benefits of filing for bankruptcy when you hire our legal team. So, do you want to file bankruptcy? If so, consider the guidelines below:
- Collect your documents. Before getting started, collect all your financial documents, so you comprehend your current finances. Obtain a copy of your credit report to learn how much secured or unsecured debt you owe. Some debts may not be mentioned, like personal loans, medical bills, and tax debt.
- Take a credit counseling course. All individuals who file bankruptcy are required to take a credit counseling course. A credit counseling class enlightens you on whether filing bankruptcy or going to collections is the best debt relief option. The credit counseling agency takes a look at your household income, expenses, and recent bank statements. After, they review the best debt relief option like debt settlement or debt consolidation.
- Complete the bankruptcy forms. After the credit counseling class, you need to complete the bankruptcy forms: they require you to state everything about your household income, expenses, debt, and possessions.
- Get your filing bankruptcy fee. The fee for chapter 7 differs from that of chapter 13. Consult a Texas bankruptcy lawyer to know what your bankruptcy filing fee is.
- Print your bankruptcy forms, take them to court and file them.
- Mail your documents to your bank trustee. A bankruptcy trustee is an official appointed by the federal law court to oversee your bankruptcy case. After sending you a mail, the bankruptcy trustee will ask you to send them particular financial documents like pay stubs, tax returns, and recent bank statements.
- Take a debtor education course. The debtor education course is similar to the credit counseling class. However, the debtor education course is designed to educate you on making wise financial decisions, thereby preventing you from seeking bankruptcy debt relief in the future. If you do not complete the debt education course, you will not get financial freedom and a fresh start.
What should you not do during the bankruptcy process?
Filing for bankruptcy can discharge most of your unsecured debt and help you gain financial freedom and a fresh start. However, you should note that when you file for a bankruptcy petition, there are specific requirements you should fulfill. Otherwise, your bankruptcy case could be denied.
- Not disclosing all your assets. When filing for bankruptcy, you should list all your assets: home, car, and bank accounts. Failure to do so is perceived as a fraud in a bankruptcy court. To avoid foreclosure or any other problem(s), work with your Machi bankruptcy lawyer in Arlington, TX, to disclose all your assets.
- Amassing more credit card debt. Before filing for bankruptcy, most individuals make large credit purchases. This will require you to pay back your creditors. Refrain from shopping trees before filing bankruptcy.
- Failure to complete a financial management course. To get your bankruptcy petition approved, you need to complete a financial management course. This course helps you learn how to properly use credit and wisely manage your money and other assets. Failure to complete this course affects your eligibility for discharge.
- Transferring assets to friends or family. Some individuals in debt presume that transferring their home, car, or other assets to friends or family will stop creditors from pursuing them. Contrariwise, this is considered fraudulent activity and will be undone in a bankruptcy court.
- Not hiring a bankruptcy attorney or lawyer. Bankruptcy is a highly complex procedure. Therefore, you want a knowledgeable bankruptcy lawyer in Arlington, TX, on your bankruptcy case. Our skilled bankruptcy lawyers will complete the bankruptcy paperwork in a timely manner and improve your likelihood of getting it approved.
- Waiting too long to act. Filing for a bankruptcy petition is a big decision that should not be taken lightly. However, you should not postpone filing bankruptcy for several months if you are facing lawsuits or foreclosures. You could lose more money and other assets in the whole bankruptcy process.
Thus, you should schedule a consultation with a bankruptcy lawyer in Arlington, TX, to discuss your financial situation promptly. Whether you choose to file a bankruptcy petition or not, it all depends on your situation and financial objectives. Nevertheless, hiring an experienced Texas bankruptcy lawyer at Machi Law Firm can give you legal advice on the best option is for you.
Hire Our Experienced Attorneys at Machi Law Firm
Finding the ideal debt relief option for you or your business can be exasperating. Consulting a seasoned bankruptcy lawyer in Arlington, TX, can help you choose whether to file bankruptcy, the pros and cons involved, and which options will best fit your situation and financial objectives.
At Machi Law Firm, our Texas bankruptcy attorneys have more than a decade of experience serving clients through North Texas. Comprehending the pros and cons of filing for bankruptcy in Arlington, TX, can help you make well-informed decisions that address your particular needs.
Contact our experienced bankruptcy attorneys and get a free case evaluation from our independent law firm if you need any legal advice with bankruptcy filings. We have established an attorney-client relationship with all our customers in Tarrant County and other counties in the Northern District of Texas. There is no commitment and no charges for your first visit. Use our contact form to fill in your details or call us today at (817) 934-1998!