Why Filing for Bankruptcy is Often a Last ResortDallas Legal News
When facing the reality of bankruptcy, many people don’t know about the variety of options they should consider before moving forward. Bankruptcy might make you feel as if your world is falling apart, especially when you have worked so diligently to maintain your business and stay optimistic about its future. Though bankruptcy might not be the end of your business, it is another hurdle that you must overcome. In most cases, bankruptcy is a last resort for businesses if all other options have failed, but you can overcome this with the right Texas bankruptcy attorney at your side.
Why Bankruptcy is Typically a Last Resort
No one likes to file for bankruptcy in Dallas, and the decision to do so often comes after weeks or months of deliberation. There are several reasons why individuals should be very cautious about choosing bankruptcy as a solution and beginning the process:
Years of Financial Recovery: The after-effects of filing for bankruptcy can stick with you for some time. In fact, your bankruptcy filing will remain on your credit report for up to 10 years depending on the type of bankruptcy that you file for. As a result, it could take time for you to make a full financial recovery.
Loan Rejections: Some lenders may not lend funds to someone who has recently gone through bankruptcy. This rejection could have a huge impact on your life and prevent you from buying a home or vehicle or starting a new business. Additionally, people who file for bankruptcy are often charged some of the highest interest rates.
Credit Score Turmoil: Your credit score could begin to rapidly decrease after you file for bankruptcy in Dallas. This full impact of the bankruptcy on your credit score will depend upon the number of accounts you have and how much of your life has been affected by the bankruptcy.
Other Options That Might First be Exhausted
There are alternative ways that some people are able to avoid bankruptcy, but these methods are not always simple and cannot be used by everyone in every case.
- Take advantage of state debt collection laws and negotiating with your creditors. If you have assets to sell or you still make some income, you might be able to negotiate with creditors to reduce your debt or adjust your payment schedule.
- Pay close attention to your debt ratios, such as ensuring that your monthly debt is 20% or less of your monthly income. By eliminating excessive monthly spending, you may find that you do have the ability to pay your debts on time.
Speak with a Texas Bankruptcy Attorney
Even with the best system, bankruptcy is not always avoidable. With an experienced attorney on your side, you can move forward in your life without the fear that bankruptcy cases can bring. When you need someone on your side, the local Texas bankruptcy attorneys at M.J. Watson & Associates are here to help you handle your financial matters. Whether you are going through Chapter 7 or Chapter 11 filings in Dallas, our team will fight for your rights and stop the constant calls from banks and creditors. Contact us for more information at (214) 965-8240.