Texas bankruptcy can be a life saver, but decisions made before during, and after your bankruptcy can mean the difference between failure and success. Why file bankruptcy? Why not sell your home instead of filing? What can you do to cut down costs? Is listing expenses and cutting down going to be enough? Let’s find out.
Before Texas Bankruptcy
You can save money before bankruptcy and potentially avoid it altogether. Bankruptcy is not for everyone. If, for example, your only problem is a $2,000 credit card bill which you can’t pay on time, that is too small really to file, no matter your income. As bankruptcy will stay on your record and make it difficult to open new credit lines, it’s a tool to be used with care.
On the other hand, if you have debts you simply cannot pay in 3-5 years, bankruptcy is a solution. The size of your debt is important, but so is your current income. A general rule of thumb is to ask yourself if it’s worth it to pay back all these debts, if it’s possible. If you can save $50,000 by filing for Chapter 7 bankruptcy, it can literally change your life.
Should you file Chapter 7 or Chapter 13? That is a decision to make with a professional. If you owe a lot of secured debt, Chapter 13 can protect your assets. If you owe a lot in credit and medical, unsecured debts, Chapter 7 can discharge them.
During Texas Bankruptcy
You can save money during the bankruptcy as well. This is a time to see where you can spend money and what you can protect. For example, if you own a home, but your main problem is tens of thousands of credit card debt, you can file Chapter 7 in order to discharge that debt. You can then negotiate with either the lender or the bankruptcy trustee to keep paying on your home. In fact, if you can afford it, you can negotiate to keep just about everything, from a wedding ring to a car.
You can also save money on lawyer fees by looking over the market. This all depends on what you owe and how important the bankruptcy is to you. If you owe a lot and it’s legally complex, hiring a more experienced lawyer and paying his or her higher fee may be worth it. But if you have a simple bankruptcy filing, there is no reason to pay huge amounts. The goal is to query as many lawyers as possible, consult with those who offer free consultations and case reviews, and make a decision on one.
After Texas Bankruptcy
After you file bankruptcy, it’s time to look over your monthly bills and income. Some of this can seem fairly obvious: “don’t spend more than you make” and “never pay bills late.” But more often than not the same mistakes made prior to bankruptcy are made again.
The solution? Create a plan on paper and look at it every day. Perhaps take the credit card from a spouse or child who spends too much. These are psychological solutions; find something that stops you from paying things you simply can’t afford. If you get a bill in the mail, make it fulfilling to pay early. Instead of eating out while at work, start calculating savings by bringing sandwiches. And write down how much you save to reinforce these goals. Every month, with money you saved, you might spend some of the money on something not necessarily needed, but you want. As long as it keeps you out of the red.
