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Three reasons why bankruptcy may be a good option

On Behalf of | Oct 8, 2019 | Chapter 7 Bankruptcy

Texas residents who are considering bankruptcy do not take their decision lightly. They usually go back and forth determining if it is right for them. Here are some tips to help individuals determine if this is a good step to take for their circumstances.

When a person has used up all of the money in their checking and savings account and they have to use their credit card to cover essential expenses, their options include increasing their income, cutting their expenses or filing for bankruptcy. If it is impossible for them to do the first two things, bankruptcy may be the only way for a person to stop digging themselves into a hole that keeps getting deeper and deeper.

Individuals who are a month or two behind on payments are likely going to have late fees and will take a hit on their credit score. After this has happened several times, there is almost no realistic way that a person can catch up on their payments and fix their credit score in a short amount of time. This may be a good time for a person to consider one of the forms of bankruptcy.

Individuals who are facing eviction from their apartment or a foreclosure on their home may turn to bankruptcy as a solution. In addition to putting an automatic stop to these things, bankruptcy can also prevent the repossession of their car. Of course, this is a temporary solution, but it will buy a person some time.

If an individual feels like bankruptcy may be the only option to help them, they will need to file specific paperwork. A person may want to speak with an attorney for legal advice and assist in filing the necessary paperwork and answering questions regarding how this decision will impact their future.