Since most people feel distraught at the prospect of ever having to declare bankruptcy, they tend to have numerous misconceptions about the process. Although it can be upsetting to even consider talking with a bankruptcy lawyer in Keller, TX, having a free consultation with one of these attorneys is advisable. The person can learn more about the two most common types of filing for individuals, explain their own situation, and ask questions.
Chapter 13
Many people know they could pay off all their outstanding obligations if only they were given more time. But now, they have multiple creditors demanding minimum payments that they cannot afford. These individuals tend to struggle for a long time, hoping to get their heads above water financially so they don’t have to declare bankruptcy and default on all those debts.
Chapter 13 is a program that allows these people to combine those obligations and make one affordable payment per month that a trustee distributes to the creditors. For these individuals, filing with the assistance of a bankruptcy lawyer in Keller, TX essentially empowers them to have a debt consolidation plan.
Filing Before Defaulting
There also tends to be lack of knowledge about whether one can file for bankruptcy if still current on all payments. This can actually be advisable if someone sees that this soon will no longer be feasible because of the amount of debt they have taken on. Perhaps there was a temporary layoff from work for a long time and unemployment was not enough to pay all the bills, so credit cards were used. Illness or injury can cause similar problems. Once the person is back to full-time work, it may still be impossible to catch up.
Credit Scores After Filing
People also worry about their credit scores because they’ve heard that the filing stays on their credit record for seven to 10 years. Although this length of time is correct, it’s still entirely possible to rebuild a credit score by staying current with all payments. Various companies offer secured credit cards to help people with this goal. A free consultation with an organization like the Law Firm of David S. Kohm can provide more information.
