The Most Important Things to Know Before You File
You’ve been struggling to meet your financial obligations for some time and it doesn’t look like things will be getting much better anytime soon. A personal bankruptcy filing may be what you need to get a fresh start. But you’ve never done this before. You want to know a few things first.
What Are Your Options When Filing a Personal Bankruptcy Petition?
There are two different paths that most individuals can take—a Chapter 7 or a Chapter 13 filing.
With a Chapter 7 bankruptcy, you can permanently discharge certain debts (there are some that cannot be discharged) in exchange for relinquishing unprotected assets to the bankruptcy trustee, to be sold to satisfy your creditors. You must qualify to file for protection under Chapter 7.
If you are not eligible for Chapter 7 or if you want to keep all your property, you can file a debtors’ reorganization under Chapter 13. That allows you to work out new payment arrangements with your creditors, typically paying off most debts over a three-to-five-year period.
What Types of Debt Cannot Be Discharged?
You cannot discharge most family obligations, including child support or alimony. Student loans are extremely difficult to discharge, as are most tax arrearages.
What Property Can Be Protected in Chapter 7?
That varies, based on whether you choose the exemptions under state law or under federal law. There are exemptions for real property, for motor vehicles and for other personal property. The Texas state exemptions are very generous, so it’s typical for Texas filers to claim those exemptions.
Will Bankruptcy Stop a Foreclosure or Repossession?
The automatic stay, which goes into effect immediately upon your filing, prevents creditors from pursuing legal action against you to collect a debt. That can suspend a foreclosure or repossession attempt. However, bankruptcy does not affect the validity of any lien that attaches to property. If you cannot make payments on a house or car, the bank can exercise its rights under the lien and take back the collateral.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
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.
