The decision to file for bankruptcy is never an easy one to make. It takes some time and consideration to determine whether or not it is truly in your best interest to do so, and the kinds of debts with which you’re struggling will also play a role in determining whether or not you should file for bankruptcy.
If it’s credit card debt in Montgomery County, TX you’re struggling with, whether you file for bankruptcy depends primarily on three factors: whether you’re able to afford to pay back the debt, how much harassment you’re being subjected to by your creditors and how much nonexempt property you own.
Here’s an overview of these factors and whether or not you should hire a bankruptcy lawyer and stop paying your credit card bills.
Affording your debt
The very first thing you’ll consider when determining whether bankruptcy is the best option for you is whether you are able to pay off your credit cards. If you make enough money that paying off your credit cards is feasible, then you will not qualify for Chapter 7 bankruptcy. This means if you have disposable income, you may need to file a Chapter 13 repayment plan instead.
There are some circumstances in which the creditor may allow you to negotiate down to a lower balance, or at least lower your interest rate. Debt consolidation practices can also help you make those bills more affordable. But if you’ve gotten to the point where your bills are a hardship and you are unable to afford your credit card payments, bankruptcy should be a serious consideration for you.
Are your creditors threatening to sue you or bothering you with harassing letters or calls? The more you fall behind on your payments, the more frequent this harassment will become. For some people, this constant attention from their creditors is actually what prompts them to seriously start looking into bankruptcy as an option.
Once you file for bankruptcy, your creditors are no longer allowed to contact you—doing so is in violation of federal consumer protection laws. Bankruptcy also puts a stop to all pending legal action, meaning you can be protected from wage garnishment and other actions after a creditor obtains a judgment against you.
The bankruptcy trustee assigned to your case in a Chapter 7 bankruptcy proceeding can sell off some nonexempt assets you have to pay back your creditors. Therefore, if you own a lot of nonexempt property, it’s probably not in your best interest to file for Chapter 7 bankruptcy. Chapter 13 bankruptcy allows you to keep more of your property, but will require you to pay back unsecured creditors in an amount that is equal to the value of those nonexempt assets.
For more information about whether or not it may be the right move for you to file for bankruptcy as a result of your credit card debt in Montgomery County, TX, contact James R. Jones, Attorney at Law to speak with an experienced bankruptcy attorney.