You may have suffered an injury that resulted in mounting medical bills you can’t afford. An unexpected job loss could have wiped out your income and savings (something happening to lots of hard-working Texans during these unprecedented times). A contentious divorce might have left you with few assets and many debts. A new baby could put undue strain on already precarious finances.
If you’ve fallen behind on bill payments, you’re probably facing a slew of harassing collection calls from creditors, and some of them may have threatened legal action against you. You don’t know where to turn to make the threatening calls and letters stop, and you don’t know what will happen next.
Can I make it stop?
Regardless of how you got to this point, there is light at the end of the tunnel. A Chapter 7 bankruptcy filing can help discharge your debt, meaning that you won’t be responsible for paying it back.
A key part of any bankruptcy filing is something called an automatic stay. This means that as soon as you file, creditors must halt any collection actions against you. It’ll be safe to pick up the phone and go to the mailbox again without trepidation.
How does Chapter 7 bankruptcy work?
Chapter 7 is also known as “liquidation bankruptcy.” In a Chapter 7 proceeding, the court assigns a bankruptcy trustee who is responsible for selling non-exempt property and using any funds collected from the sale to pay creditors.
Does this mean you’ll lose all your property? Absolutely not. Texas has generous bankruptcy exemptions that allow most filers to keep their retirement savings, home, vehicle, work tools and personal property up to $50,000 (or $100,000 for a married couple).
How long does it take?
Chapter 7 proceedings usually wind up in no more than six months. By the end of that time, any remaining unsecured debt will be discharged, including:
- Unsecured personal loans
- Credit cards
- Medical bills
If you feel overwhelmed by debt and need a fresh financial start, a Chapter 7 bankruptcy filing may be right for you. There are some debts that can’t be discharged in bankruptcy, but your attorney can explain those in greater detail.