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Aspects to Understand When Filing for Chapter 7 Bankruptcy in Fort Worth

Chapter 7 bankruptcy in Fort Worth covers most types of unsecured debt but excludes child support and student loans. Unsecured debt does not have any collateral or property connected with the credit. For instance, credit cards are types of unsecured debt, while vehicle financing is secured. A vehicle financing company can repossess the automobile, but a credit card company has nothing to repossess. The company eventually sends its overdue accounts to a collection agency.

Filing for bankruptcy in Fort Worth also will not cover debts that the creditor or the court considers likely to be fraudulent. Typically, this means debts the person took on within a few months before filing. Running credit cards up to the maximum during this time frame is an example. That additional debt will likely be excluded. The same is true if the man or woman borrowed money with a personal loan from a bank or other lending company a few months beforehand.

Time Frame

The person must not have filed for chapter 7 bankruptcy within the previous eight years, as that is a disqualifying factor. Although the bankruptcy system was created to provide protection for consumers, the option is not to be abused.

Relief from Collection Activity

Once an organization such as David S. Kohm & Associates files the paperwork with the court, the client immediately receives legal relief from all qualifying debt collection activities. Credit card companies, collection agencies, and lending institutions must stop trying to contact this person or risk being charged with contempt of court.

Compliance with Laws

Compliance with federal bankruptcy laws is crucial for the filing to be successful. This is one reason why U.S. residents are urged to hire a lawyer such as the one from Davidskohmattorney.com to assist in the process. It’s technically possible to file pro se, but inadvisable for most people.

A New Start

Although filing for bankruptcy can feel devastating emotionally and may seem very embarrassing, it allows the person to make a new financial start. The individual can start repairing and rebuilding their credit score quickly with strategies like prepaid credit cards and a personal loan secured by a savings account.

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