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There may be some obstacles to overcome before filing bankruptcy

Many Texas residents find themselves dealing with overwhelming debt, but are unsure how to resolve the issue. One of the best things to come out of the Great Recession was the increase in acceptance of bankruptcy as a viable debt relief option. Even so, people still have trouble with the concept of filing for bankruptcy or have certain barriers to using it.

If you recently incurred new debt or paid off some old debt, you may have to wait a minimum of six to 12 months before filing. You may have a moral objection to filing for bankruptcy since you believe it is your responsibility to pay your debts despite the hardship. You may believe that because you only have one or two debts that you do not need to file bankruptcy. This may actually depend on the type of debts.

You may not be comfortable revealing your entire financial life to the court. You will need to disclose all debts, assets and other liabilities to the court when filing. Like other Texas residents before you, it may to your benefit to overcome these issues in order to reap the benefits that come from filing for bankruptcy.

More than likely, if you are considering bankruptcy as a viable debt relief solution, then you are already avoiding and fielding calls from creditors wanting payment. A garnishment may be in place, a lawsuit may be filed or a foreclosure threat may be imminent. Perhaps the fear that your auto loan lender will show up and repossess a vehicle is very real.

Once a bankruptcy is filed, a stay of execution goes into effect. This halts all debt collection activities from creditors. Garnishments must stop, foreclosures and lawsuits are halted and creditors must stop making contact. If all goes well, you may end up with a discharge that releases you from your obligations to pay certain debts. Even so, you may be left with some debts that you will continue to be obligated to pay after the case is closed depending on the situation.

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