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How Do You Know When to File for Bankruptcy?

Photo Of Chapter 13 BankruptcyBankruptcy can be a new beginning for people who have fallen onto financial hardship through no fault of their own. Bankruptcy can consolidate debts and eliminate most or all unsecured debts in many cases, allowing you to focus on rebuilding your credit score, while avoiding calls from debt collectors.

Think You’re Ready? Explore Other Options First

There are some alternative options to consider before filing. Bankruptcy will stay on your credit score for up to 10 years after filing. You can renegotiate with creditors to get a lower interest rate and ask for lower monthly payments spread out over a longer period. If you talk to your creditor and let them know you are considering bankruptcy, they may be more willing to negotiate a better rate with you. A Lewisville bankruptcy attorney can review your financial situation and figure out the best way to settle your debts.

What Are the Benefits of Filing for Bankruptcy?

  • Automatic stay: When you file for bankruptcy, you get an automatic stay protection, which means creditors cannot contact you until a final discharge order is reached.
  • The court sets rates: The courts will notify your creditors of the repayment rates they have to accept (Chapter 13 bankruptcy), or that your debts have been federally discharged (Chapter 7 bankruptcy). This gives you more control in deciding on a repayment plan that works for you.
  • Tax free-debts: When getting debts dismissed by a creditor, you will have to pay taxes on that debt. When you discharge debt in bankruptcy court, there are no taxes.
  • Credit repair: Many people think that their credit will be completely ruined because of bankruptcy. This is not true, and most people will likely get offers from credit card companies and car dealerships before the bankruptcy process is even completed.

Lewisville bankruptcy attorneys at Shuster Law Firm PLLC law firm are dedicated to providing the best debt settlement options for your needs.