Plano Chapter 7 Bankruptcy Lawyer & Solutions for Financial Relief

What Qualifies You for Chapter 7 Bankruptcy?

Chapter 7 bankruptcy begins when the debtor petitions the court for relief.

You may qualify for a Chapter 7 bankruptcy if:

• Your Gross Income is Less Than the Median Income of Your State: This income test, known as the means test, helps determine eligibility by comparing your income to the family median income specific to your state and household size.
• You Do Not Have Enough Income to Qualify for a Chapter 13 Bankruptcy Despite Making More Than the State Median Income: Demonstrating low disposable income post-necessary expenses barricades ineligibility for Chapter 13.
• You Have Not Declared Bankruptcy Within the Last 6-8 Years: Recent bankruptcy discharges disallow immediate subsequent filings.
• You Did Not Commit Fraud: Intentional fraudulent actions lead to disqualification from Chapter 7 benefits.

If you meet these requirements, you may qualify for a Chapter 7 liquidation bankruptcy. Upon the filing of a bankruptcy petition, a court order, called the Automatic Stay, will prevent any creditor from contacting you, foreclosing on your home, or repossessing your car without court approval to do so.

Understanding the full scope of the qualifications is crucial, as individual circumstances can vary greatly. It's important to recognize potential exceptions and specific circumstances that might influence the outcome of your bankruptcy filing. Our team at LoBue Law, PLLC ensures every angle is thoroughly considered, providing personalized advice tailored to your unique situation, further enhancing your preparation process.

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How to File Chapter 7 Bankruptcy in Texas

Chapter 7 bankruptcy is the most common type of consumer bankruptcy in the United States. It is a liquidation process that allows individuals to have their debts discharged without having to pay them back.

If you are a Texas resident and looking to file Chapter 7 bankruptcy, here are the steps you need to take:

1. First, you must attend a credit counseling session with an approved agency at least six months prior to filing your bankruptcy. This is required by federal law, and you must provide proof of the counseling before your bankruptcy case can proceed. This is a requirement of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The counseling can be done in person, over the phone, or online, and typically takes about an hour.
2.  Gather all the necessary paperwork and documents. This includes any tax returns from the past two years, proof of income, financial statements such as bank account balances and investments, and a list of all your creditors. Make sure you have copies of all this information.
3.  Next, complete the official bankruptcy forms. These forms can be found on the U.S. Bankruptcy Court website and must be filled out completely and accurately before filing for bankruptcy.
4. You must pay a filing fee when you submit your petition to the court. The fee is currently $338 dollars, although it may change over time. In some cases, you may qualify for a fee waiver or installment payment plan.
5. Once you have submitted your petition to the court, you must attend a meeting with the trustee assigned to your case. This meeting gives creditors an opportunity to present any objections they may have and also allows the trustee to verify that all information is accurate.
6. Finally, after all steps have been taken, the judge will either approve or deny your petition. If approved, you will receive a discharge of all debts and be free from any future payments.

By following these steps, you can begin the process of filing for Chapter 7 bankruptcy in Texas. It is important that you understand the process to ensure your case is handled properly.

Beyond these steps, consider discussing the implications of bankruptcy on your financial future with your lawyer. Each decision made during the filing process can have lasting effects on your credit standing, and lifestyle adjustments may be necessary post-bankruptcy. Our chapter 7 bankruptcy attorney provides valuable guidance and ongoing support to help you navigate life after debt discharge.

What Property Will You Lose in Chapter 7 Bankruptcy?

In Chapter 7 bankruptcy in Texas, individuals may seek relief from overwhelming debts, but it comes at the cost of losing certain properties. Understanding what assets are at risk can help individuals make informed decisions and navigate the bankruptcy process more effectively.

• Non-Exempt Property: Chapter 7 bankruptcy involves the liquidation of non-exempt assets to pay off creditors. In Texas, state law provides exemptions that protect certain types and amounts of property from being seized. However, any property not covered by exemptions may be subject to liquidation.
• Homestead Exemption Limitations: While Texas offers a generous homestead exemption, allowing individuals to protect their primary residence from creditors, there are limitations. The exemption applies only to a certain acreage in urban areas or an unlimited amount of land in rural areas. Additionally, there are restrictions on the value of the property that can be protected under this exemption.
• Vehicle Exemption: In Texas, individuals can exempt one motor vehicle per licensed household member up to a certain value. Any vehicles beyond this limit may be subject to liquidation.
• Personal Property Exemptions: Certain types of personal property, such as clothing, household furnishings, and tools of the trade, are exempt up to a certain value. However, luxury items or property exceeding the allowed value may be sold to satisfy debts.

Understanding the exact extent of assets classified under exempt and non-exempt is crucial when navigating a Chapter 7 bankruptcy. Our Chapter 7 bankruptcy lawyer in Plano thoroughly evaluates asset lists with clients to identify which belongings are potentially at risk, ensuring no unforeseen surprises during the process. This profound understanding helps adjust expectations on asset retention and financial rebuilding post-bankruptcy.