Bankruptcy
If you are struggling financially, you may not be certain if a Houston bankruptcy is the right choice. There is no simple answer—it depends on your specific financial situation. An experienced Houston bankruptcy attorney at Swindell & Associates, P.C. can explain your options and help determine the best course of action.
Is Chapter 7 right for you?
Often referred to as straight bankruptcy, Chapter 7 involves the elimination, or discharge, of most debts. A Houston Chapter 7 is usually most helpful in discharging unsecured debt such as:
- Credit card debt
- Medical bills
- Deficiency balances due to auto repossession
How does it work?
When you file for Chapter 7, a "stay" is automatically placed on everything you have. This means that no creditor is allowed to collect in anyway. All lawsuits, collection efforts even repos and foreclosures must stop at the exact moment. This provides you immediate relief! Your creditors have to then go through our Houston bankruptcy law firm and the court to ask for anything. Once you get your discharge it will means the creditors can never call you, sue you or try to collect in any way. If they did try they could be sued for violating Houston bankruptcy law. This is what starts your credit rebuilding almost immediately because you become debt free and no creditor can type on your credit report. They can only show that you owe them zero. Typically within four months after filing you will receive a discharge of all dischargeable debts.
Chapter 7 is an excellent option if you have few assets but a large amount of debt because it enables you to make a fresh start relatively quickly.
Is Chapter 13 right for you?
Chapter 13 is also known as reorganization bankruptcy. It allows you to create a three- to five-year payment plan based on your income instead of your assets. Under a Houston Chapter 13, your various debts are consolidated into a single payment that you make to a Chapter 13 Trustee who then disburses payments to your creditors according to your court-approved and legally binding Chapter 13 Plan.
Chapter 13 may be the right option for you if you have non-exempt property you would like to keep and you have a reliable income that will enable you to afford your day-to-day expenses while making payments on your debt.
With Chapter 13, you may be able to avoid—
Keep your car with Chapter 13
When you reorganize your debt under Chapter 13, you essentially refinance your existing auto loans. Once you enter Chapter 13, repossession and collection efforts against you stop. You must make all Chapter 13 payments and keep your car insured throughout the duration of Chapter 13. Failure to do so is considered default and a bankruptcy judge could force you to turn your car over to the lender.
Save your home from foreclosure
Filing for Chapter 13 stops foreclosure actions. When you file for Chapter 13, your debt repayment plan should make it possible for you to catch up on your mortgage payments within 36 to 60 months (depending on the length of your plan). If you make your Chapter 13 payments according to plan, the bank or mortgage company cannot foreclose on your home.
