Frequently Asked Questions About Bankruptcy

A:Yes. In a grand majority of cases, successfully completing a Chapter 7 bankruptcy or Chapter 13 bankruptcy will lead to a court authorizing you to discharge unsecured debts. This category refers to debt without collateral and encompasses credit card debt, medical debt, unpaid utility bills, and personal loans. In some situations, we may also be able to help you remove judgment liens, certain types of IRS debt, and student loans.

A:Filing Chapter 7 bankruptcy, also known as liquidation bankruptcy, requires passing the Texas Means Test. Your average income either needs to be lower than the median average income in Texas for your household, or your monthly disposable income must be so low that a court determines you do not have the means to repay a portion of your debts. 

A:The liquidation process tends to frighten some, as the thought of losing your home or other items of sentimental value can seem too much to bear. Luckily, you are permitted to exempt property, and the state of Texas boasts some of the most generous exemptions in the country. The state features an unlimited homestead exemption for most Texans, for example, meaning you will likely not lose your home. We can help prepare your estate for the liquidation process and minimize its impact.

A:No. Attempting to circumvent the liquidation process in Chapter 7 bankruptcy by giving assets to friends or loved ones can result in your bankruptcy filing being dismissed, or worse. Do not assume the bankruptcy court will not discover your actions, as the trustee assigned to your case will perform a thorough audit of your possessions. Remember, you will be able to exempt a great deal of personal property as part of Texas’s exemption schedule, lawfully protecting it from liquidation.

A:When debt becomes overwhelming, it can be tempting to ignore the problem and hope its consequences never materialize. Unfortunately, creditors expect to be repaid and will take action if you fail to do so. You will likely receive letters, phone calls, or even in-person visits from collection agents demanding payment. If you are suffering creditor harassment, consider getting in touch with us: It is probably a sign your financial situation requires decisive action, including potentially bankruptcy. Hiring legal representation will also shield you from further collection calls. Continuing to ignore debts once collection calls and letters have started will likely trigger lawsuits seeking repayment. If you lose – and unless there are extraordinary circumstances explaining why you have not paid your debts, you likely will – you will be subject to severe punitive consequences.  

A:When you file for bankruptcy, the proceeds of either liquidation or your repayment plan is generally equally distributed among your creditors. You might decide you want to make what is called a “preference payment” as you prepare to file or are in the process of filing for bankruptcy. This means that though you are insolvent and are readying to undergo the liquidation or reorganization process, you are showing preference to one or more creditors versus the others. 

A:No! This is one of the most common misconceptions about bankruptcy. While filing for bankruptcy will inevitably harm your credit rating in the short-term, there are steps you can take to quickly rebuild credit. Keep in mind that the high levels of debt compelling you to consider bankruptcy in the first place are likely doing a significant amount of damage on their own. 

A:Our firm has numerous advantages that can assist you in overcoming your financial problem, including: