A Fresh Start
Chapter 7 Bankruptcy is a way to reorganize finances to help eliminate debt. It allows an individual to do away with unsecured debt by settling their debts in court. Some examples of unsecured debt include credit cards, medical bills, signature loans, utility bills, payday loans, repossession deficiencies, and judgments. The court may offer a discharge of your debt in which you are excused from paying those debts to creditors. Before the court offers a discharge, a court appointed trustee is given the power to sell some of your assets in order to pay creditors, if necessary. However, filing for bankruptcy does not necessarily mean your assets will be liquidated. Texas is one of the more generous states that provides many exemptions, which protect a lot of one’s personal property from seizure during bankruptcy.
All too often people end up with large balances and outstanding bills that they cannot afford to pay. They may try to shift balances between cards that offer low interest rates or work with creditors to settle on an agreed balance by making minimum payments across several years. These strategies often leave the person in worse financial trouble and do little to reduce your overall debt. When a person cannot afford to pay their debts to creditors, only a few options are available to protect them from losing all assets, making multiple payments with high interest rates or legal troubles. Chapter 7 Bankruptcy is a responsible way to achieve a fresh start by reorganizing finances and eliminating debt.
The Chapter Bankruptcy 7 Process
Chapter 7 Bankruptcy can eliminate most, if not all, of your unsecured debt. The process is relatively quick and may provide relief from the stress of unsecured debt within 6 months between filing and receiving a discharge. Best of all, there will be no payments to creditors. By working with an experienced attorney, all forms and bankruptcy schedules will be filed on your behalf. In most cases, people may be able to keep their secured property such as house, cash, cars and retirement accounts. Additionally, Chapter 7 Bankruptcy protects against wage garnishment, collection calls, repossessions, foreclosure and lawsuits. Chapter 7 also provides an opportunity to repair your credit faster than other debt management strategies. Your credit will be repaired by having your debt-to- income ratio improved by eliminating your unsecured debt and negative payment history.
Filing for Chapter 7 Bankruptcy
The first step in filing for Bankruptcy is to contact one of our qualified attorneys to determine if filing for Chapter 7 bankruptcy is right for you. The attorney will determine your eligibility by conducting a means test. This test examines your incomes, assets, debts and exemptions against the IRS standards. The law requires that anyone considering filing for Chapter 7 Bankruptcy receive credit counseling and take a Debtor Education Course. The attorney will assist you in obtaining the mandatory credit counseling and Debtor Education Course. When it is time to file for Chapter 7 Bankruptcy, your attorney will assist you in filling out a petition and several other forms. These forms will contain details regarding your income, debts, money spent, any property sold or exempt and other items. After the petition and forms have been filed, an Order of Relief will be issued to stop creditors from trying to collect what you owe.
Most people assume that you will lose all your property in the Chapter 7 Bankruptcy process. It is important to note that Texas is one of the more gracious states that allow you to keep your property. If you are a resident of Texas, you are allowed under Federal Statute to keep your property by using all the available exemptions. The equity in your property is exempt; however, you will have to keep paying for the property in order to keep it. Chapter 7 Bankruptcy allows you to reaffirm the debt and continue making payments on the property. Once all payments have been made, the title is released and you will own the property.