Deciding if Bankruptcy is the Right Choice

 Posted on January 12, 2024 in Bankruptcy

Filing for bankruptcy can provide much-needed relief if you are drowning in debt, but it also comes with long-term consequences. Determining if you qualify and weighing the pros and cons takes careful consideration.

You may feel desperate for an immediate solution, and filing for bankruptcy is the apparent quick fix. However, visualizing how this decision will impact your financial future over the next several years is vital. A Texas bankruptcy lawyer can help you determine if this is your best option.

Am I Eligible to File for Bankruptcy?

Eligibility hinges on several factors, starting with what chapter of bankruptcy makes the most sense. Chapter 7 liquidation eliminates most unsecured debt, while Chapter 13 restructures obligations into more manageable payments. The specific qualifications differ slightly, and knowing how this can affect you and your situation is essential.

For Chapter 7:

• Your income must fall below Texas median levels based on location and family size. This is usually between $40,000 as a single earner and then goes up to $65,000+ depending on your family size.

• You have not filed for bankruptcy within the previous eight years.

For Chapter 13:

• You demonstrate consistent income to maintain ongoing payments.

• Your assets and debts do not exceed maximum limits. Your secured debts should not exceed $1,010,650, and the sum of your unsecured debts should not surpass $336,960.

As you can see, it gets complicated quickly determining if you qualify, especially Chapter 7. With legal representation, you can carefully assess the nuances of your finances to establish eligibility.

What are the Pros and Cons of Filing?

While bankruptcy immediately halts most collection efforts, the trade-off is long-term damage to your credit standing. After weighing eligibility, a lawyer can help you explore the pros and cons regarding your specific situation.

For example, entering a Chapter 13 payment plan allows you to keep assets like your home and vehicle while settling debts at reduced balances over three to five years. However, not keeping up with the payment schedule can still result in losing those cherished assets.

Contact a San Antonio, TX, Bankruptcy Attorney

Every case carries unique factors our firm considers before recommending filing bankruptcy. Contact a Kerrville, TX, bankruptcy lawyer for an initial consultation if you have questions. You deserve to know what options you may have. Call Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation today.