The Limitations of Bankruptcy
Bankruptcy might well be your only option to escape from sweeping debt and foreclosure. Initiating bankruptcy can thus potentially save you a lot of money, but it is in no way a miracle solution. There are various limitations when initiating bankruptcy, which a qualified Houston bankruptcy lawyer can discuss with you…
While it is technically your federal right in the United States to initiate bankruptcy to solve financial problems, you may only undertake the process every 6 years. The option should thus only be practiced if you have no other option to resolve your debt, and a certified Houston bankruptcy lawyer will help you assess your liabilities to determine whether or not you should initiate bankruptcy.
Although bankruptcy enables you to resign your debt, it does not abolish the rights of secured creditors. Nonexempt property can still be repossessed by creditors in an attempt to cover their losses. These can include high-profile items like car loans and house mortgages, which can be devastating to lose. If you can force creditors to accept available payment as stated in Chapter 13 of the United States Code, you and your lawyer might be able to buy some time.
You cannot discharge any debts without consequences, and some debts are exempt from bankruptcy. For example, you can’t get rid of debt created by student loans, criminal fines, and most of your civil tax costs. All court costs and the hefty filing cost for your bankruptcy case also need to be paid in due time. Discuss all possible costs and debt reduction with your lawyer beforehand.
Houston houses over 200 law firms and you’re sure to find a bankruptcy lawyer in your location. Firms span all the way from Dyersdale, offering many a Dyersdale bankruptcy lawyer, to The Woodlands where you’ll find the right The Woodlands bankruptcy lawyer for your case.
When you file for bankruptcy, there are limitations on the parties who are relieved of debt: If you had anyone co-sign on any debt you created, they will not be exempt of their debt. You should thus discuss your plans with any co-signers in your debt, since their obligation will not be discharged after your bankruptcy case is finalised.
Filing for bankruptcy with an expert Dyersdale bankruptcy lawyer, The Woodlands bankruptcy lawyer, or any lawyer for that matter, will not clear your credit rating. It’s a fresh financial start, but it doesn’t clear your credit standing, and might also limit you when you try to create debt in the future. Bankruptcy will appear on your credit rating for the next 10 years in standard cases.
To overcome most of the challenges bankruptcy poses (assuming it is your final option), you may want to start selling your exempt possessions to build some financial stability. You will need to start over completely in most cases and attempt to adjust your spending habits and find sustainable sources of income. Even with all its limitations, this process could well be a positive force saving you from financial ruin.
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