Filing for Chapter 7 bankruptcy is a big step. But once you understand how it works, it may not be so scary.
I am attorney Lindsay D. Steele. I have helped hundreds of people in the Fort Worth area get a fresh financial start through Chapter 7 bankruptcy. In a free consultation, I can address your specific questions and concerns. Call me at 682-990-9372.
Under Chapter 7 of the U.S. Bankruptcy Code, honest debtors like you can get immediate relief from creditors and a complete discharge of certain debts. Filing for Chapter 7 relief triggers an automatic stay, which means creditors must stop harassing phone calls and all collection actions, including foreclosure.
Chapter 7 is for people who are so far in debt that they can’t repay what they owe. Eligibility is based on a financial means test in which either:
If you aren’t sure, I can help you determine if you qualify for a Chapter 7 discharge. If not, we can explore Chapter 13 bankruptcy.
Most people struggle with debt for a long time, hoping to catch up but falling farther and farther behind. Filing for bankruptcy may be appropriate when creditors start taking legal actions like foreclosure, liens, wage garnishment, and harassing your family members and employer. Talk to a lawyer before it’s too late.
Chapter 7 bankruptcy eliminates unsecured debts such as medical bills, credit card balances, utility bills, personal loans, past due rent and civil judgments. Certain income taxes that are more than 3 years old may qualify. Once discharged by the Bankruptcy Court, creditors can never come after you for those debts.
Chapter 7 bankruptcy does not discharge secured debts such as mortgage arrears or car loans. You also cannot discharge student loans, recent taxes, child support or alimony obligations, or court-ordered fines or restitution.
You may have to forfeit some assets, which the bankruptcy trustee will sell to partially repay your creditors. However, under the Texas bankruptcy exemptions, most of my clients do not lose any property. You can exempt all retirement savings, your vehicles (one vehicle per licensed member of the household), your equity in your home, plus up to $50,000 in personal property ($100,000 for a married couple).
Most (but not all) people are able to keep their homes in Chapter 7. Texas has an unlimited homestead exemption, so all equity in your home is exempt. You must be current on mortgage payments. Filing for bankruptcy stops the foreclosure process, but if you fall behind after a Chapter 7 discharge, the lender can resume foreclosure. I can help you decide if it is financially feasible to keep your house or surrender it.
Your credit is already bad if you are maxed out on credit cards and paying bills late. There is a short-term hit to your credit when you file bankruptcy, and it does stay on your record for 10 years. However, most people are able to qualify for loans and credit cards within a year two. By living within your means and paying debts on time, you can re-establish a good credit score.
Bankruptcy is fact-specific. You may be concerned about specific debts or exemptions, or the timing of your Chapter 7 petition. Please arrange a free initial consultation by calling Steele Law Firm, PLLC, or contact me online.
Steele Law Firm is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.