Learning the Basics From a Bankruptcy Attorney in Texas
It is easy to see why many people are nervous and apprehensive about filing for bankruptcy relief. The laws and rules surrounding the bankruptcy federal code are numerous and it can be a little confusing. This is one reason why so many attorneys suggest that people sit down with a qualified bankruptcy attorney in San Antonio, Texas to discuss the particulars of their situation. Here is a summary of some of the most important aspects of both the Chapter 13 and Chapter 7 bankruptcy filings.
It is possible to recover in a short amount of time after filing bankruptcy. Although the note indicating a bankruptcy filing can remain on a credit report for several years, people who learn from their mistakes and begin to take control of their finances can greatly help their situation. According to most bankruptcy lawyers in San Antonio, Texas, low rates on mortgages and auto loans are quite possible just a few years after filing for bankruptcy protection.
By following the guidance of a bankruptcy attorney in Fort Worth, Texas the entire process can be handled in quick order. It is feasible for a Chapter 7 case to begin and end within a total of 4 months.
The law does not require both the husband and wife to file bankruptcy. There are numerous cases in which one person has a sizable amount of debt in their name alone and it is wise for just one spouse to file either Chapter 13 or Chapter 7. Bankruptcy lawyers in San Antonio, Texas can review your situation and decide on the best plan of action. Chapter 13 People whose income exceeds the Means Test limit for their size of household, behind on their home or vehicle that they want to keep, or have non-dischargeable tax liability are usually best served by filing Chapter 13. A bankruptcy attorney can usually put together a plan that makes it possible to keep their home and cars, pay the IRS, as well as retain most if not all of their other property.
It is important to understand that once a plan has been proposed and accepted by the Chapter 13 bankruptcy court, the debtor must abide by the plan. All payments must be made in the correct amount and on time. If the debtor fails to uphold their obligations then the court may have the right to dismiss the bankruptcy. An experienced Fort Worth, Texas attorney may be able to temporarily reduce your plan payments or possibly convert your bankruptcy to a Chapter 7. Although, this may lead to surrendering homes, cars, and other types of property back to the creditors or to the Chapter 7 Trustee.
A Chapter 7 plan will basically write off a person’s debt. On the contrary, a Chapter 13 plan looks for a way to repay the debt encumbered by your home and vehicles, and if necessary some or all of your debt to unsecured creditors. With your secured debts, it is possible for a reduction in the principal, a reduction in the interest or a combination of the two. Bankruptcy lawyers in Fort Worth, Texas can advocate for the best interest of the debtor. Chapter 7 For people who pass the Means Test and if most or all of their assets are exempt, this is a great way to get out from under a large amount of debt. If a person has assets that exceed the limits for a “Fresh Start”, the court has the right to sell these non-exempt assets owned by the debtor in order to pay off the debt. If the assets are not enough to cover the debt then the remaining balance is written off. Through proper pre-bankruptcy planning with an experienced Texas attorney, it is possible to protect most or all of your assets prior to filing.
In order to qualify for the Chapter 7 filing the bankruptcy attorney in Texas will compare the debtor’s current monthly income against their current monthly expenses. A standard called a “mean’s test” is used to see if the person is eligible for Chapter 7. There are many “means test” calculators offered on websites, but do not assume that if you pass or fail it on your own. Only an experienced Fort Worth, TX attorney can determine which expenses are allowed by the bankruptcy court and these rules change often.
Most of the time a Chapter 7 case is best suited for people with a high amount of unsecured loans. This can include credit card balances, bills from hospitals and doctors, and any loan not secured by collateral, especially payday loans. Find more in-depth information on this website