Consumer Bankruptcy Law

Most people want to pay their bills on time.  However, they sometimes experience financial problems due to events such as loss of a job or medical expenses. This change in circumstance may make it difficult or impossible to continue paying as they have in the past. In such circumstances, filing bankruptcy may be the solution.

Bankruptcy law is enacted by the United States Congress rather than by the Texas legislature. The overall purpose of bankruptcy law is to provide financial relief to persons who are able to meet certain standards and qualifications.

There are essentially two main types of bankruptcy relief available to individuals. The first is a Chapter 7 bankruptcy filing. In a Chapter 7 case, the court appoints a Trustee to take possession of non-exempt assets, sell them, and distribute the proceeds to creditors who have filed proper claims according to their respective priority. If a person has previously filed a Chapter 7 case,  there is a waiting period for filing a new case.  In addition, persons filing a Chapter 7 bankruptcy case must complete a means test to see if they are eligible for this type of relief. The means test looks at median income in your area as well as other factors.

The other main relief available to individuals is a Chapter 13 bankruptcy filing.  This is commonly known as the “ wage earner” plan. A Chapter 13 plan must be approved by the court and will typically run between three and five years. During this time period, the individual will be making monthly payments to the Chapter 13 Trustee who in turn distributes money to creditors who have filed the proper proof of claims. It should also be noted that during the time the plan is in effect, the person is not allowed to incur new debt without obtaining court approval.

Individuals filing bankruptcy are also required to take additional actions. First, Individuals are required to complete a credit counseling course prior to filing a bankruptcy case. In addition, In order to receive a discharge in bankruptcy, individuals are required to complete a debtor education or financial management course.

If you are experiencing financial difficulties and would like to speak with a consumer bankruptcy law attorney, contact our office to discuss if filing bankruptcy is the best option for you.  We can discuss how to stop collection calls and threatening letters and outline the necessary steps to prevent the repossession of your automobile and the foreclosure on your home.  We are conveniently located to persons living in Frisco, Little Elm, The Colony, Plano, Carrollton, McKinney, Oak Point, Cross Roads, Prosper, Gunter, and Celina.

Bankruptcy Frequently Asked Questions

No. Certain debt such as child support, alimony, student loans, victim restitution awards, and debts incurred as a result of fraud cannot be eliminated in a bankruptcy.

No.  There are exemptions under federal and state law that will allow you to keep your property. However,  keeping property such as your car and house will require that you pay these type secured lenders as provided for in the Bankruptcy Code.

No.   In many instances,  it may be advantageous for both spouses to file but  it is not required.  If only one spouse files bankruptcy, this filing has no direct impact upon the credit standing of the non-filing spouse but could affect other areas indirectly.

No.   It can be argued that non payment of bills or consistently paying bills late can be just as if not more damaging than filing bankruptcy.  Bankruptcy law is designed to provide a fresh start.  Persons receiving a bankruptcy discharge that pay their bills on time and exhibit renewed financial discipline will be able to rebuild their credit over time.

No. Once bankruptcy is filed, creditors are required to cease attempting to collecting their debt except as allowed by the Bankruptcy Code. Once a bankruptcy case is filed,  all listed creditors are given notice of the filing.  This is why it is extremely important to list all known creditors when the case is filed.