An Overview of Your Options and Opportunities
You’re struggling every day to make ends meet. You get nervous when the mailman comes down the street or the telephone rings, afraid there will be another demand letter or belligerent creditor asking for payments you can’t make. You’ve contemplated seeking protection in bankruptcy, but you don’t know what your options are or what type of protection you’ll get. Here are some of the basic principles of personal bankruptcy filings.
The Different Kinds of Personal Bankruptcy Petitions
As a general rule, nearly all personal bankruptcy filings take one of two forms: a Chapter 7 petition or a Chapter 13 petition. Chapter 7, known as “liquidation,” allows you to permanently discharge certain debts in exchange for transferring some of your property to the bankruptcy court. Some debts, such as tax obligations, family law payments and student loans, are difficult to impossible to discharge. You can claim some value in your personal property as exempt from transfer. But as a general rule, you cannot discharge debt on secured property and keep the property. If you simply want to be out of debt and have no desire to keep certain property, Chapter 7 can be ideal.
In a Chapter 13, known as reorganization, you work with creditors to negotiate new payment arrangements, typically over a three-to-five year period. Your creditor may be willing to waive certain fees or penalties, but you typically will pay all agreed-upon debt in full over the period of the bankruptcy. If you still owe money on a debt (your mortgage, for instance) after the bankruptcy period ends, it will still be binding. Chapter 13 is a better option if you want to keep all your property.
With the filing of a Chapter 7 or a Chapter 13 petition, you are immediately entitled to the protection of the “automatic stay.” This legal provision prevents your creditors from calling, writing or attempting to collect a debt from you by any method other than through the bankruptcy proceeding. While the automatic stay is in effect, you won’t have to make any payments. However, the automatic stay does not itself discharge or extinguish any debt.
Contact Heath, TX Bankruptcy Attorney Carrie Weir
At the Law Office of Carrie L. Weir, I provide a free initial consultation to anyone with questions or concerns regarding a personal bankruptcy filing. Contact my office by e-mail or call me at 972-772-3083 to schedule a private consultation. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.
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