Filing A Chapter 7 Bankruptcy In Texas
The following article will cover:
Chapter 7 Bankruptcy: Explaining the concept of Chapter 7 bankruptcy and its role as a debt relief option.
- Dischargeable Debts: Discussing the types of debts that can be legally forgiven in a Chapter 7 bankruptcy, including credit card debts, medical bills, and unsecured loans.
- Exempt Assets: Highlighting the assets individuals can retain during Chapter 7 bankruptcy, such as homes, automobiles, household furnishings, and retirement plans, based on state laws and exemptions.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a particular form of debt relief where you, as the debtor, petition the court to discharge your outstanding debts. If you successfully meet the qualifying criteria, the majority, if not all, of your debts could be legally forgiven. This provides you with an opportunity to reset your financial situation and start anew.
What Debts Are Discharged In A Chapter 7 Bankruptcy?
In a Chapter 7 bankruptcy, generally, the debts that can be discharged are unsecured debts. These include, but are not limited to:
- Credit card debts
- Medical bills
- Unsecured loans
Such unsecured debts are typically eligible for discharge, thereby freeing you from their associated burdens.
What Assets Can I Keep In Chapter 7 Bankruptcy?
The assets you are allowed to retain in Chapter 7 bankruptcy vary based on state laws. In the state of Texas, for instance, you are typically allowed to keep:
- Your home
- One automobile for each family member
- All your household furnishings and appliances
- Clothing and jewelry (up to specified limits)
- Most retirement plans
These assets fall under the exemption category, meaning they are protected from liquidation during the bankruptcy process.
Are There Downsides To Chapter 7 Bankruptcy? What Could I Potentially Lose?
While Chapter 7 bankruptcy offers significant relief from debts, it is not without drawbacks. It involves a liquidation process where assets not covered under the exemptions, as specified by either Texas law or federal bankruptcy law, could be sold by the bankruptcy trustee. The proceeds from this liquidation are then used to pay off your creditors.
Such non-exempt assets could include rental properties, recreational vehicles like boats or RVs, and non-retirement investments. Additionally, filing for bankruptcy could negatively impact your credit rating, a factor that should be carefully considered.
How Long Will A Chapter 7 Bankruptcy Take?
The duration of a Chapter 7 bankruptcy varies for each individual. However, on average, the entire process tends to last about four to five months, and sometimes even longer.
How Do I Find The Best Texas Bankruptcy Attorney Near Me?
In order to find a competent bankruptcy attorney in Texas, you should prioritize experience in bankruptcy law, given its distinct nature compared to other legal fields. It would be advantageous to seek out an attorney who holds board certification in bankruptcy from the Texas Bar Association, ensuring their proficiency and credibility in this specialized area. For more information on Filing A Chapter 7 Bankruptcy In Texas, an initial consultation is your next best step.