Austin Bankruptcy Blog


Bankruptcy 101 – 6 Key Facts to Remember Before Filing

Posted by Sean T. Flynn | Jan 01, 2020 | 0 Comments

When you are under a mountain of debt, filing for bankruptcy may be the only viable option, as it can allow you a fresh new start in your financial life. However, it doesn't hurt to have a little bit more know-how about bankruptcy before you considering filing for it.

1. Two main types of Bankruptcy

For consumers, the two main types of bankruptcy they can file under are Chapters 7 and 13. The first option allows you to discharge your debt by liquidating your non-exempt assets, while the second will enable you to reschedule your debt repayment plan. For more information, be sure to check out this blog.

2. Your Location Matters

Bankruptcy laws can vary from state to state. This is why it is crucial to do research on your local state laws or consult an attorney before filing for bankruptcy.

3. It's Not Free!

On average, the cost of filing for bankruptcy can range from $1500 to $3000 on average. First, there are the necessary filing fee and court fees you have to pay. Second is the cost of hiring an attorney. Sure, you can file for bankruptcy without a lawyer, but your chances of succeeding can be very low. Nonetheless, these costs are often well worth it as bankruptcy helps you escape the even costlier dilemma of high debt burden.

4. It Doesn't Always Make Your Credit Score Worse

If you are falling behind with repayments, and are heavily indebted, filing for bankruptcy probably won't make a significant dent on your already worse credit score. In the long run, you may even see your credit score improve after bankruptcy. You may even qualify for an FHA loan a year or two after you filed for bankruptcy.

5. Bankruptcy is Public

Your filed bankruptcy is held in public records; this means that anyone can potentially seek it out if they are interested. Fortunately, unless you are really famous, few people would be aware of your case. The only people who would likely be searching it up would be individuals and organizations doing background checks on you, e.g. your employer, security personals, and creditors.

6. You have to Attend Classes

Before you file for bankruptcy, you are required to attend a 60 to 80-minute pre-bankruptcy counseling session within 180 days before the filing date. After your bankruptcy is officially concluded, you will need to attend another 120-minute credit counseling session. Fortunately, you are given the option to attend the class online or through the phone if you can't do so in person. Before filing for bankruptcy, consulting with a legal attorney is always recommended. They are in a position to best guide you on how to proceed with the bankruptcy process with minimal losses. If you require a professional, personalized legal service, consider The Law Offices Sean T. Flynn. To schedule your free consultation, call 512-640-3440, or contact directly online.

About the Author

Sean T. Flynn

Biography A graduate of the University of North Texas, Sean went on to get his JD from the University of St. Mary's School of Law. He is licensed to practice law in the State of Texas, as well as being admitted to the U.S. Federal Court in the Northern, Eastern and Western District of Texas. Sea...


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

The Law Offices of Sean T. Flynn Are Here for You

At The Law Offices of Sean T. Flynn, I focus on Bankruptcy matters and I am here to listen to you and help you navigate the legal system.

Contact Me Today

The Law Offices of Sean T. Flynn is committed to answering your questions about Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, Steps For Filing Bankruptcy, Foreclosures and Repossessions, Divorce Bankruptcy, and Creditor Lawsuits issues in Austin, Texas.

I offer a free consultation and I'll gladly discuss your case with you at your convenience. Contact me today to schedule an appointment.

Austin Law Office
4408 Spicewood Springs Rd., #413
Austin, TX 78759