Filing For Bankruptcy
The process of filing for bankruptcy can be tedious and overwhelming at times. The first step is to contact a qualified attorney to begin a consultation. In the initial consultation, the attorney will gather details about your financial situation. Itemized information about your current income, monthly living expenses, secured and unsecured debts, owned property and other major financial transactions will be needed. It is also a good idea to have your tax returns from the past two years available. These documents will help the attorney evaluate all the options available to resolve your financial troubles
Once the decision to file for bankruptcy has been made, there are two mandatory processes you must complete. The first process is to complete a means test. This test evaluates whether your income is below a determined threshold. If your income is below the threshold of median income, you will be eligible to file for Chapter 7 bankruptcy. Alternatively, if your median income is above the threshold you will file for Chapter 13 bankruptcy. Individuals who have high median incomes will use Chapter 13 bankruptcy to repay their debts, rather than file for Chapter 7 to eliminate their debts completely. The general rule is if you have excess income to pay 25% of your unsecured debts, after your basic expenses have been met, you must file Chapter 13. Those who are eligible for Chapter 7 are not required and have the choice to file Chapter 13. The Texas bankruptcy law outlines the exact formula for calculating the threshold and dictates specific forms to be completed. One of our experienced attorneys can assist you in determining your bankruptcy eligibility and completing the necessary forms.
The Texas bankruptcy law now requires anyone filing for bankruptcy to receive credit counseling. Individuals filing for bankruptcy must meet with a credit counselor for a 90-minute session. This session must be completed within six months of filing for bankruptcy. If you are filing for Chapter 7 bankruptcy, you must complete a money management course before your debts will be discharged. If you are filing for Chapter 13 bankruptcy, part of the credit counseling process includes the development of a debt repayment plan. This plan includes the amount of debt to be repaid as well as the duration of repayment terms. The Chapter 13 plan must be approved by the courts and presented to the creditors.
The attorney will review with you the list of approved exemptions allowed under the Texas bankruptcy laws. Together you can determine which property may be exempt from seizure during the bankruptcy process. Your attorney will assist you in completing the bankruptcy petition, also known as schedules. These documents will contain a description of your current financial standing and any financial transactions up to the last two years. The bankruptcy petition will be filed with the courts by your attorney. The fee for filing a Chapter 7 bankruptcy is $274 and a fee of $189 for a Chapter 13 bankruptcy. The fee for a Chapter 7 bankruptcy may be waived or you can pay in installments. There is no waiver available for the Chapter 13 fee.