North Richland Hills Bankruptcy Attorney

North Richland Hills Bankruptcy Lawyer

Living within your means is a goal that many people strive for. Bills are paid on time, large purchases are planned and prepared well in advance, and debt is kept within a reasonable range. Unfortunately, that is not always possible. For many people, their debt reaches a level that they can no longer sustain. This may be caused by medical bills, the loss of a job or income stream, or any number of other factors.

When you are in a situation where your debt has become overwhelming, it is often stressful and scary. You want to be sure that you can support yourself and your loved ones, but it feels as if you will never be able to get out from under your debt. In these cases, filing for bankruptcy may be in your best interest. This filing is a way to either minimize or eliminate debt to help you regain financial stability. It is important to be as informed as possible if you choose to file for bankruptcy in Texas, and Steele Law Firm, PLLC, can help.

North Richland Hills Bankruptcy Attorney

The Basics of Bankruptcy

Financial strains and challenges are something that nearly everyone will face at some point in their life. The loss of a job, significant medical expenses, and other unexpected trials can cause you to take on more debt than you can reasonably manage. If you find yourself in these circumstances, it may be in your best interest to file for bankruptcy.

Bankruptcy laws were put in place as a way to protect individuals and businesses that have accrued more debt than they can repay. These laws are intended to allow those with overwhelming debt a way to find renewed financial stability and pay back their debt as much as they are able within a timely manner. When filing for bankruptcy, you can either choose to liquidate your assets to pay debts or create a payment plan. Filing for bankruptcy is the best option for many people and gives them the space and freedom to regain their financial stability over time.

Reasons to File Bankruptcy

There are many factors that can contribute to someone needing to file for bankruptcy. Any major change in circumstances can create significant debt. If that debt becomes overwhelming, then filing for bankruptcy may be the best option for someone to alleviate some of their debt. The need to file for bankruptcy can be caused by nearly anything. Some of the most common things that can cause such overwhelming debt are:

  • Loss of a Job. Managing money and expenses is much easier when you have a consistent income stream to depend on. If that consistent income is taken away, it can be nearly impossible to continue paying for the same expenses. When an individual who has lost their job is unable to find a new job or find a job that matches their previous pay, the debt can very easily compound and become overwhelming.
  • Unexpected Expenses. Everyone will face times in their life when an unexpected expense arises. This may be a significant medical bill, having to buy a new car, or a major repair on your home. These significant expenses are often necessary, but you may not be financially stable enough to be able to pay for them immediately. It may be necessary to take out a loan or other type of debt to pay for the expense. With that additional debt, it may not be possible to keep up with payments.

Filing for bankruptcy does not necessarily mean that someone is irresponsible with money. In many cases, an individual who finds themself filing for bankruptcy is facing an unexpected expense or change of circumstances. When you choose to file for bankruptcy, it is important to know how you should file to ensure that you get as much debt relief as possible.

Types of Bankruptcy

Bankruptcy laws are created at the federal level, and they are extensive. The bankruptcy code is broken into various sections, often referred to as chapters. Each chapter represents a type of bankruptcy that is available either to an individual or to a corporation. When you file for bankruptcy, you will refer to your bankruptcy by its chapter. There are six types of bankruptcies, each dealing with a different circumstance.

  • Chapter 7: Liquidation
  • Chapter 9: Municipalities
  • Chapter 11: Large Reorganization
  • Chapter 12: Family Farmers
  • Chapter 13: Repayment Plan
  • Chapter 15: Used for Foreign Cases

Chapters 7 and 13 are the types of bankruptcies most often used by individuals. There are specific requirements that must be met for each of these chapters. If you believe filing for bankruptcy is the best choice for you and your family, it is important to understand which chapter you will need to file under.

Chapter 7 Bankruptcy

This is one of the most common chapters of bankruptcy for individuals. Chapter 7 is sometimes called straight bankruptcy but is primarily known as liquidation. When you initially file with the proper bankruptcy court, a full list of all of your assets will be provided as part of your filing. This will play a key role in determining how your case is handled because it gives an idea of what assets may be liquidated in order to satisfy your debts.

There are many benefits when filing for a chapter 7 bankruptcy. A successful filing can stop your home from being foreclosed on, keep your utilities on while you catch up on missed payments, and ultimately discharge many of your debts. When debts are discharged, it means that you are no longer under any legal obligation to pay them back. This is a good option for many people, but it is not the only avenue available.

Chapter 13 Bankruptcy

Chapter 7 bankruptcy can eliminate nearly all of an individual’s debt, so they no longer have to pay it back. That is not the case with Chapter 13 bankruptcy. When you file for Chapter 13 bankruptcy, you are still required to pay back some or all of your debts. A repayment plan will be created for you, which will most often give you three to five years to pay back what you owe.

Chapter 13 filings are only feasible for individuals who have a regular source of income that will allow them to make payments on their repayment plan. Retirement, social security, regular wages, and disability can all be classified as income when Chapter 13 bankruptcy is concerned. This type of bankruptcy cannot protect you from criminal charges or assist with debts accrued after the filing is complete, but it can stop creditors from harassing you and provide the time needed to reorganize income and assets to ensure you can make regular payments on your debt.

There are several other chapters that may be filed, but 7 and 13 are the most commonly used for individuals filing for bankruptcy. Regardless of which chapter you file under, one of the more difficult aspects of the bankruptcy process is the act of filing. The guidance of an experienced bankruptcy attorney can make the process easier to manage.

Filing for Bankruptcy

The initial process of filing for bankruptcy is often time-consuming and tedious. You must ensure that all paperwork and documentation is completed correctly, then follow all of the necessary procedures to avoid any mistakes or delays. A North Richland Hills bankruptcy attorney can help you understand what to expect when you are filing for bankruptcy, but it is important to know that the chapter you file under will determine your filing process. When filing for any chapter of bankruptcy, there are several first steps that are universal. Any individual filing for either Chapter 7 or Chapter 13 bankruptcy face the following steps:

  • File the paperwork. This is the official court filing that gets the process started. Once this paperwork is filed, there is an automatic stay that temporarily halts all credit collection.
  • Get a court-appointed trustee. When your paperwork has been filed, the courts will assign a trustee to your case. This individual will check your paperwork and other financial documents closely to ensure the information is correct and there is no fraud.
  • Attend a creditor’s meeting. This is a meeting with a judge, and typically at least ten debtors attend at the same time. You will provide certain information and answer a few standard questions for your case to be continued.

Once these steps are done, anyone filing for Chapter 7 bankruptcy will only have to submit a financial management course certificate, and they will be done. Those filing Chapter 13 bankruptcy, however, have a few more steps. They must have their payment plan approved, complete their repayment plan, and file all necessary documents with the court. This process can be stressful and difficult, but it is worthwhile for those struggling with overwhelming debt.

Types of Debt Included in a Bankruptcy Filing

Not all debt is the same, so when you are filing for bankruptcy, the type of debt you have will have an impact on how you file and how your assets may be liquidated. When dealing with debt, there are two primary types: secured and unsecured.
  • Secured Debt. This means that you have offered something up as collateral for this debt. These debts are most often mortgages on your home or payments on a vehicle. When you make those types of significant purchases, you put the item you are purchasing up as collateral to create a secured debt. These debts can be discharged when you file for bankruptcy, but you will likely lose that asset if it is not paid off. When you create a secured debt from these purchases, you must give up the asset if you are unable to pay back the amount that you owe.
  • Unsecured Debt. Unsecured debts are most often loans of some sort that are given without any collateral required. Credit cards and bills, such as medical bills and utilities, are some of the most common types of unsecured debt. When you file for bankruptcy, this type of debt is most likely to be discharged, meaning that you will not have to pay back the full total of the loan.
The types of debt that you have gathered over time will play a role in determining what your bankruptcy filing will look like. If you have a significant amount of secured debt, then it may be in your best interest to liquidate your assets to pay back the debts. If most of your debt is unsecured, however, you may choose to discharge the debt and create a payment plan to repay it. While bankruptcy can be a great option for debt relief, it is also important to be aware of how filing for bankruptcy may impact other areas of your life.

Does Filing for Bankruptcy Impact Your Credit Score?

One question that many people have when they are considering whether or not filing for bankruptcy is the correct choice for them is whether or not filing will impact their credit score. There is a belief that filing for bankruptcy could impact your credit score in a negative way. A low credit score can make it difficult to get lines of credit in the future if you are making large purchases, such as a home or a vehicle. Individuals who are attempting to get rid of their debt want to be sure that they will be able to recover financially in the future.

In order to preserve your credit, it is important that you file for the correct chapter of bankruptcy. Filing for a Chapter 13 bankruptcy allows you to protect your credit because a payment plan is created. You will be paying back your debt on a consistent basis and rebuilding your credit as you go. This process typically takes two to three years, but you will be well on your way to better credit when you are done. Other chapters of bankruptcy, such as Chapter 11, offer other protections but may make it more difficult for you to rebuild your credit. Overall, the best course of action is to choose the bankruptcy filing that best meets your needs and will help you to recover from your debt.

How Bankruptcy Affects Your Assets

Filing for bankruptcy will have an impact on nearly every aspect of your life, but you still need to be able to support yourself and your family. Your assets are a major part of how you are able to do that. Depending on the type of debt you have and what chapter of bankruptcy you file, some of your assets may be seized.

When you file for certain chapters of bankruptcy, such as Chapter 13, you are still required to pay back at least a portion of your debts. Other chapters, like Chapter 7, liquidate your assets as a way to pay off the debts you owe. Liquidation is the process of selling off your property, including things like homes and vehicles, in order to pay off your debts. This helps to eliminate your debt, but losing major assets is also a harrowing concept. If you are filing for bankruptcy in North Richland Hills, it is important to know what assets you are able to protect when you file.

Exempt Assets in a Bankruptcy Filing

Losing all major assets when filing for bankruptcy would all but defeat the purpose of eliminating debt because the person filing would have no way to sustain themself moving forward. As a way to provide further assistance to those filing for bankruptcy, each state determines what assets can be protected during a bankruptcy filing.

Depending on the circumstances of your claim, there may be federal and state exemptions available for you. The exemptions offered in the state of Texas are more robust than many other states and can offer additional protection to citizens filing for bankruptcy. The most common exemptions offered in Texas are:

  • Homestead. Texas is one of the very few states that offers an unlimited homestead exemption. Any home in a city that is on less than ten acres of land is fully exempt. Similarly, any homes outside of a city that is on less than 100 acres of land are fully exempt. This exemption is available to individuals who have lived in Texas for a minimum of 1,215 days.
  • Motor Vehicle. This is an unlimited exemption. In most cases, a vehicle can be exempted for every member of the household who is a licensed driver. Additional vehicles may also be included if a non-licensed driver relies on them for a means of transportation.
  • Personal Property. Individuals who file for bankruptcy in Texas can claim up to $50,000 of exempt personal property. This is typically calculated by the cash value of the items and can include jewelry, furniture, firearms, and more.
  • Retirement Accounts. These accounts are often built up over the years, and in some cases decades, so that people are able to support themselves when they are no longer working. IRAs, 401ks, pension plans and other retirement accounts may be protected if you claim this exemption.

There are also similar federal exemptions available. Most of them are the same as those above, but federal exemptions also include:

  • Government and Family Support Obligations. This exemption extends to things like alimony, child support payments, and benefits like Social Security and disability. When filing for bankruptcy, these things are considered assets and are 100% exempt.
  • Wildcard Exemption. This exemption is for anything that would typically be non-exempt, such as a recreational vehicle or vacation home. Up to $13,900 of this type of property can be claimed as exempt.

The process of filing for bankruptcy is tedious and can often be confusing. Determining what assets you may be able to protect and what will have to be given up is a difficult process. Understanding the requirements and rules can make it simpler, but that is not a simple task. Working with an experienced North Richland Hills bankruptcy attorney can be invaluable as you complete your filing.

How a North Richland Hills Bankruptcy Attorney Can Help

Navigating any legal process can be confusing and overwhelming, especially if you have never dealt with the legal system before. This is particularly true when you are filing for bankruptcy. The choice to file is often a difficult and emotional one, so having the proper support is essential. A North Richland Hills bankruptcy attorney can make the process of filing easier to manage. There are a few key ways they can offer assistance.

  • Expertise. Bankruptcy attorneys have spent years studying and understanding the state and federal laws surrounding filing for bankruptcy. They will know what you can and cannot do when filing, what paperwork and documentation are required, and what timeline to follow. Their knowledge will help guide you through the filing process and ensure there are no mistakes or delays.
  • Experience. The ideal bankruptcy attorney will have years of experience working with clients who are also facing bankruptcy. They have seen what approaches work and what plans do not work. This experience allows them to analyze and assess your specific situation to ensure that you have a clear, effective plan in place when you begin your filing process.
  • Support. The decision to file for bankruptcy is often a difficult and painful one. You may feel ashamed or angry that you have reached a point in your life when you are unable to repay your debts. Working with an experienced bankruptcy attorney can help ease some of that frustration. They will not judge you for your current circumstances. Their job is to work with you and provide the information, resources, and guidance you need so that you can file successfully and begin your journey toward renewed financial stability.

Making the decision to file for bankruptcy is not simple. It can be emotionally, mentally, and financially taxing, even if it is the best choice for you and your family. The process is time-consuming and may be confusing. It is important to be as prepared and informed as possible.

Working with a North Richland Hills bankruptcy attorney can make the process easier to face. They will be able to provide you with guidance, resources, and support as you file and throughout the entire experience. Working with an experienced bankruptcy attorney can give you peace of mind as you work through the filing process and begin to rebuild your financial stability. If you believe that bankruptcy is your best course of action, contact the team at Steele Law Firm, PLLC.

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