Filing for Bankruptcy Can Be an Effective Way to Eliminate Debt and Start Rebuilding Your Credit

In a Nutshell: Filing for bankruptcy isn’t something people include on their bucket lists. But it can be a way to get your credit back on track when you don’t have many other options. Austin Bankruptcy Lawyers guides its clients through the process of filing for Chapter 7 bankruptcy so they can eliminate debt and begin to rebuild their credit.

When we reach a crossroad in life and aren’t sure which direction to go, sometimes the more difficult path is the one that’ll get us where we want to be. A wrestler struggling to make weight for an upcoming tournament can choose to go to an all-you-can-eat buffet for a feast the night before their bout. But staying home for a more mundane meal of steamed vegetables and lean fish will probably be more helpful to a wrestler on a quest to shed pounds quickly.

Personal finance is another area where exercising discipline can reap rewards. Saving for retirement isn’t the most thrilling thing you can do with your money, and it can be difficult to imagine how adding relatively small amounts to a retirement account will ever amount to much. But savers can earn interest that grows substantially over many decades.

When you were putting together your vision board, you probably didn’t include any images or inspirational sayings associated with bankruptcy. But individuals who file for bankruptcy can recalibrate their financial lives and put themselves in a position to reach their goals.

Austin Bankruptcy Lawyers, a division of Lincoln-Goldfinch Law, guides clients through bankruptcy processes. We spoke with Joshua Meyer, the Division Manager of Austin Bankruptcy Lawyers, to find out how the firm helps clients gain financial stability.

Meyer isn’t an attorney at the firm — he handles its operations and works closely with new clients. He told us he’s spent many hours consulting with clients to get to know them and the circumstances that have led them to Austin Bankruptcy Lawyers. 

The financial positions of many people have changed as the world continues to recover from the effects of the COVID-19 pandemic. Meyer told us many people are struggling to pay their credit card debt, and seeking legal help is one way they can overcome issues with card debt.

Financial troubles can affect nearly anyone. The diverse group of clients Austin Bankruptcy Lawyers serves is a testament to that. 

“During the hundreds of consults I’ve done, I’ve seen waves of truck drivers come through who are having issues keeping up with rising fuel costs,” Meyer told us. “I’ve also worked with people that are either recovering from serious illness or right in the thick of things who need a way to get through it financially. And a lot of retired people are on a limited income, so they’ve used their credit cards to prop themselves up and get by when Social Security income isn’t enough.”

Most people are aware that eating vegetables is good for them, even if their taste buds don’t agree. So they shovel another forkful of broccoli into their mouths, even if they do so begrudgingly.

The public perception around filing for bankruptcy can prevent people from pursuing that course of action, even if it’s in their best interest. Meyer told us the stigma around bankruptcies is one of the biggest challenges Austin Bankruptcy Lawyers faces.

“People almost need to be scared enough to have the courage to break through the stigma that’s out there,” Meyer told us. “And it really shakes people up when they’re in overwhelming debt and facing the prospect of having to go to court. But filing for bankruptcy is a tool that can really benefit people when they feel like they can’t breathe because they’re drowning in debt.”

Austin Bankruptcy Lawyers focuses its marketing efforts on delivering messages that combat the notion that filing for bankruptcy will make a bad financial situation worse, similar to pouring gasoline on a fire. Meyer told us one reason he loves his job is because the firm can help people who feel like there aren’t any solutions to their problems.

You can schedule a call with Austin Bankruptcy Lawyers if you’re on the fence about whether filing for bankruptcy can help you out of a financial jam. The firm offers free case evaluations that you can register for on its website. 

Meyer handles many of the initial calls prospective clients make to Austin Bankruptcy Lawyers. He told us that callers are often thankful to learn they have an ally in their corner who’s willing to help them fight for a better future. 

Attorney-client privilege means that communications between a client and their legal counsel are confidential. Meyer told us the discussions that take place during evaluation calls are also kept private.

“Callers are so grateful that we take the time to listen to them and understand their situations because not every bankruptcy lawyer is willing to help out,” Meyer told us. “I can tell there’s a dramatic change that happens in many people, and they’re going to be able to sleep better at night just because they took the time to learn what filing for bankruptcy can actually do. Making that impression on people is so crucial, and we do that with 100% of the people we meet with.”

Austin Bankruptcy Lawyers specializes in aiding those considering filing for a Chapter 7 bankruptcy, which can eliminate your unsecured debt. Meyer told us that people need to submit to a means test to qualify for filing for Chapter 7. 

Austin Bankruptcy Lawyers practices in Texas, where Meyer told us the means test compares your income to the median level of income in the state. The firm asks people to submit an initial payment and sign a fee agreement once they qualify to file for Chapter 7 and agree to have Austin Bankruptcy Lawyers represent them. 

The firm schedules strategy sessions with new clients to give them a forum where they can sit with an attorney and ask them about any concerns they have. Meyer told us that Austin Bankruptcy Lawyers prepares and files a petition once one of the firm’s attorneys and a client have settled on a strategy.

“Before we file that petition, we’ll hop on a call with the client for a final appointment to make sure everything is clear to them and that they’re comfortable moving ahead,” Meyer told us. “About 30 days after we file the petition, there’s a hearing that’ll take place virtually so all the parties involved can review everything and make sure it aligns with bankruptcy code. And then about 60 days later, if all goes as planned, the unsecured debt is discharged.”

Austin Bankruptcy Lawyers serves clients in the U.S. District Court for the Western District of Texas. Meyer told us the district spans from Bastrop, Texas, which lies roughly 30 miles east of Austin, westward to the state’s border with New Mexico. That’s a lot of ground for one team to cover, but the firm is more than up to the task.

“I’d encourage anyone who’s wondering whether filing for bankruptcy can help them to schedule a free consultation with us,” Meyer told us. “By reaching out and speaking with us, you can educate yourself before deciding what move to make. There are so many variables with these cases, and that’s why it’s so necessary to get the attorneys in the mix as soon as you can.”

You shouldn’t feel shame if you ever elect to file for Chapter 7 bankruptcy to improve your financial situation. Meyer told us many people wind up in financial straits due to a single incident that had a negative impact on their finances, not because they’ve made a lifetime of poor decisions with their money.

People may fear the effect that filing for bankruptcy can have on their credit scores. They worry that lenders who review their credit history in the future and notice they’ve filed for bankruptcy may think twice about extending credit to them. But Meyer told us filing for Chapter 7 may be a person’s best option.

“If a creditor is reviewing your profile and sees a bankruptcy in your past, they’re not going to necessarily think that means you’re a bad borrower,” Meyer explained to us. “Filing for bankruptcy could be interpreted as showing that somebody took the initiative and used the resources they had to take the bull by the horns and pull themselves together. As I understand it, credit can start to improve after debts are discharged.”

Not everyone who has credit card debt is a good candidate for Chapter 7 bankruptcy. Meyer told us individuals who have $5,000 or more of unsecured debt should consider filing for Chapter 7. 

A lack of education can be the culprit when people have financial difficulties. Austin Bankruptcy Lawyers hosts a blog on its website where it posts informative articles on bankruptcy-oriented topics, including bankruptcy’s effects on your car, house, and any student loans you’ve taken out.

“We’re not taught many of the basics of personal finance in school,” Meyer told us. “We’d love for people to take the time to learn about the tools that can help them manage their money.”