Will Chapter 7 Bankruptcy Work for Me?
The stress of increasing debt can rapidly become overwhelming. If creditors keep hounding and your debt is growing faster than you can pay it back, you may want to consider bankruptcy.
What is Chapter 7 Bankruptcy?
In Chapter 7 bankruptcy, all of your legally dischargeable debts are forgiven. In exchange you must surrender your “non-exempt” assets and forfeit the proceeds to be divided among creditors. However, many assets qualify as “exempt.” Exempt assets are protected assets that individuals get to keep. In most cases, individuals who file for Chapter 7 bankruptcy do not end up surrendering assets.
Know Which Assets Are Exempt
Exempt assets are assets individuals get to keep and are not affected by the filing of a bankruptcy. The rules of exemption are complex. Your exemptions will depend on whether or not you possess a home, the amount of time for which you have owned the home and the amount of time you have lived in the State of Texas. In most instances, individuals are able to keep their home, often depending on whether or not they are able to catch up with their mortgage payments to avoid foreclosure.
Why Consumers File for Chapter 7 Bankruptcy?
While bankruptcy laws have changed over the years, the needs of citizens filing for bankruptcy have not. Contrary to the assertions of lenders, very few bankruptcies result from financial irresponsibility. Almost all bankruptcies are triggered by forces beyond the person’s control, like unexpected medical bills or hard economic times.
Chapter 7 bankruptcy is a good option for consumers who don’t have a large amount of non-exempt assets. If you have many assets, you may want to consider filing for Chapter 13 bankruptcy instead. Talk to a bankruptcy lawyer to find out which option is best for you.
To learn more about bankruptcy in the Austin, Georgetown, Leander, or Round Rock area, you can schedule an appointment for a free initial consultation with one of the members of our legal team. Just call 512-322-5367 or or contact our offices online.