When does it make sense to file for bankruptcy? It’s going to be a different story for every person who’s in debt. There are some general guidelines – see below – but before you take any legal action regarding bankruptcy in the Dallas-Fort Worth area, you should discuss your own unique financial circumstances with an experienced Dallas bankruptcy lawyer. Filing for bankruptcy is quite frankly a last resort, and there may be alternatives that you haven’t considered. A good bankruptcy lawyer can explain those alternatives to you.
The truth is that filing for bankruptcy under either Chapter 13 or Chapter 7 will lower your credit score by a hundred points or more. For at least several years after a bankruptcy, it will be difficult to qualify for credit cards, a mortgage loan, auto loan, or personal loan. You’ll have to work to reestablish your credit, and you’ll have to adhere to your attorney’s advice and to the terms of the bankruptcy. When, then, does filing for bankruptcy – and taking the credit hit – make sense? Generally speaking, bankruptcy makes sense in these situations:
- Your liabilities exceed your assets: Bankruptcy may be the best option when your liabilities are higher than the value of your assets. If your income isn’t enough to pay your regular monthly obligations, speak to a bankruptcy attorney promptly.
- Unemployment, illness, or injury make paying your debts impossible. If a job loss, an illness or injury, or another unforeseen circumstance has reduced or eliminated your income, filing for bankruptcy might provide the relief you need.
- Negotiations fail: Always try to negotiate with creditors before declaring bankruptcy. Many may be willing to reduce the amount you owe or the amount you pay each month. If creditors won’t negotiate with you, you might have no other option but bankruptcy.
If you are wrestling with debt in the Dallas-Fort Worth area, and the debt is winning, don’t spend another day struggling. Contact an experienced Dallas bankruptcy lawyer as quickly as possible to discuss your circumstances, alternatives, and bankruptcy rights under Texas law. When you’re deep in debt, it’s the right thing to do.