What Factors Should Go into Your Decision?
You’ve hit a bad patch. Maybe you’ve lost your job or you’ve incurred substantial medical bills not covered by insurance. You’ve never filed for bankruptcy protection, so you’re uncertain how to determine whether that will be in your best interests. Here are some of the key initial factors to consider.
What Are Your Prospects for Paying Off Your Creditors Over Time?
As a consumer, you’ll generally have two potential options in bankruptcy: the permanent discharge of debts under Chapter 7 or the restructuring of your obligations through Chapter 13. You must, however, qualify to file under Chapter 7 by demonstrating to the bankruptcy court that you lack the potential income and resources to repay your creditors over time.
What Types of Debt Do You Have?
Under the bankruptcy laws, some types of debt can be discharged and some cannot. As a general rule, family law support obligations (child or spousal support) may not be eliminated in a bankruptcy proceeding. Student loan arrearages and tax debts can be discharged, but doing so is extremely difficult. Furthermore, it’s difficult to discharge the debt on collateralized property, such as a house or vehicle, without giving up the property.
On the other hand, credit card debt and medical bills are typically pretty easy to discharge in bankruptcy. Personal loans, leases and utility arrearages are also less problematic.
What Type of Property Do You Own?
This is much less of a concern in Texas, which has perhaps the most liberal bankruptcy exemptions in the country. In most instances, if you qualify to file for permanent discharge of debt under Chapter 7, you’ll be able to rid yourself of eligible debts in Texas without the loss of any assets.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
Learn more about the reasons for reaffirming a debt in bankruptcy. At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.
