Arlington, TX Bankruptcy Lawyers Answer FAQs about Assets and Debts in Bankruptcy
As an Arlington, TX bankruptcy lawyer can tell you, bankruptcy can be a path for many individuals who are facing overwhelming financial challenges and debt. There are various types of bankruptcy filings and people may only qualify for one type. It’s important to meet with a knowledgeable bankruptcy lawyer who can help you make informed decisions.
What is bankruptcy?
Bankruptcy is when a person declares him or herself unable to make payments to creditors. In some cases, this person will meet with a judge who can determine a practical payment schedule, or has the power to clear a percentage of the outstanding debts.
If you are unsure of whether or not it may be beneficial for you to file bankruptcy, consult with a knowledgeable Arlington, TX bankruptcy lawyer who can explain your options based on your unique circumstances. Many law firms offer a free consultation for new clients, which can be a great way to seek guidance from a trusted legal professional.
What happens to assets if bankruptcy is filed?
It depends on which type of bankruptcy was filed. For a chapter 7 bankruptcy, the individual must provide a list of all current debts and property. There are limits to how much property someone can have while eliminating his or her debts. Under chapter 13 bankruptcy, you may be eligible to keep the majority of your current property.
What happens if for chapter 7 bankruptcy, not all property or assets are listed?
It is required by law that assets and property are entirely disclosed. The fraud division of the FBI, auditors of the IRS and office of United States Trustees examine the bankruptcy filings. It is very likely that if assets are not disclosed, they will eventually be discovered. It is considered a federal crime or felony to commit fraudulent bankruptcy.
Can a business declare bankruptcy?
Businesses can declare bankruptcy too, but this means the business will likely close or will operate with a reduction of debt payments. Many business owners choose to consult with an Arlington, TX bankruptcy lawyer for advice before declaring bankruptcy.
How can a business owner avoid personal bankruptcy?
It’s possible that by incorporating your business your personal assets can be protected from a bankruptcy action. A corporation might offer additional protection, over sole proprietorship. In this way creditors can only seek the company’s assets because the corporation is a separate entity from the business owner. However, this is a general guideline and it may be in your best interest to talk to an Arlington, TX bankruptcy lawyer before making any major business decisions.
Is it required to file for bankruptcy if a person is in debt?
No, if a person is able to pay off bills within the required time frame, it is best to continue doing so. But, if your debts are substantially more than your income and assets, bankruptcy may be the most useful option. A bankruptcy lawyer Arlington TX offers can provide you with the guidance you need.
Who will become aware of a person’s bankruptcy status?
Bankruptcy filings and court records are public. However, not all of a person’s information is shared. Friends, family, and coworkers will likely never find out about bankruptcy unless the person who filed tells them directly. A bankruptcy lawyer in Arlington TX can help you with this process.
If you are facing financial problems and are contemplating filing for bankruptcy, consider speaking with an Arlington, TX bankruptcy lawyer from Brandy Austin Law Firm, PLLC. Filing for bankruptcy can seem like a scary proposition, but it may be the opportunity you need to gain a fresh financial start.
What Is Bankruptcy?
Bankruptcy is a system of federal laws that allows an individual or business to get relief from debts, allowing them to make a new financial start. These laws were created to help the honest but unfortunate debtor begin a new future without the pressure from creditors trying to collect pre-existing debts. If you have been toiling with finances, it is important to meet with an experienced Arlington, TX bankruptcy lawyer that can help guide you on the options.
When trying to decide if you should file for bankruptcy, you should contact a professional lawyer that is able to help. A skilled bankruptcy lawyer from Arlington, TX may suggest that before filing for bankruptcy you should:
- Get your finances in order;
- Speak to your lawyer to find out which debts won’t be forgiven; and
- Assess what would be affected if you do file for bankruptcy.
Types of Bankruptcy
An experienced Arlington bankruptcy lawyer from Brandy Austin Law Firm, PLLC. may explain that the most common types of bankruptcy are called chapter 7 and chapter 13:
Chapter 7: This type of bankruptcy liquidates all of your nonexempt assets to help pay off as much debt as possible. Some common reasons for choosing this route is because of unemployment, large medical expenses, overextended credit, and marital problems. Once your assets are sold, the money is then distributed to creditors such as banks and credit card companies. It is important to speak with a trusted Arlington, TX bankruptcy lawyer before choosing this option because it is not right for everyone. Nearly all of the individual’s assets are taken and sold to help pay off the debt, if you own a company, a house, or any other assets you want to keep, chapter 7 may not be the most appropriate choice. However, chapter 7 does offer a quick fresh start for many people.
Chapter 13: This form of bankruptcy is able to reorganize your debt using a repayment plan. Typically, this plan is useful for those wanting to keep property or other assets. When the repayment plan is organized individuals have a three to five-year period to pay off their debts. If the debtor has consistent annual income, chapter 13 offers a grace period. Any debt remaining at the end of the grace period is discharged.
In either case, contacting an Arlington, TX bankruptcy lawyer may be able to help you decide which bankruptcy chapter is suitable for your situation.
What Are the Benefits to Filing for Bankruptcy?
Many people who file for bankruptcy are embarrassed and uncomfortable to go through the process. The truth is that bankruptcy is more common than you may realize. According to data collected by the Judiciary Data and Analysis Office (JDAO), there are approximately 800,000 personal bankruptcy filings each year in this country. Approximately 500,000 people file Chapter 7 and 300,000 people file Chapter 13.
Rather than being embarrassed, bankruptcy filers should think of filling as a new beginning. The constant barrage of phone calls and letters from creditors looking for money will end, and you can begin anew.
At Brandy Austin Law Firm, PLLC, we are dedicated to assisting clients with those new beginnings. When you meet with one of the Arlington, TX bankruptcy lawyers from our firm, he or she will carefully go over your situation and decide which option is more beneficial for your situation. Your attorney will explain the pros and cons of each type and what the result will be for you. Contact our office today to set up a free consultation to find out how we can help.
Rebuild Your Credit
People who file for bankruptcy usually have a low credit score due to the amount of debt they may have and the number of late payments to creditors. Although a bankruptcy will sit on your credit report for between seven to 10 years (determined by the type of bankruptcy you file), many filers find that they are able to obtain credit shortly after their bankruptcy is completed. Credit card companies will send filers offers to apply for their card and even mortgage companies are willing to work with a bankruptcy filer within a year or so.
Having your debt discharged lets you start with a clean slate and allows you to reestablish credit. Staying in the same situation, always struggling, will just keep adding late payments to your credit report and never let you rebuild.
One important thing to keep in mind, however, is that even though credit card companies may be ready to give you credit, you want to make sure that you do not get caught up in the credit trap, charging for luxury items and quickly finding yourself back in debt again. Financial advisors often advise people who have filed for bankruptcy to not purchase an item unless they pay for it in cash, as long as it does not interfere with you paying for any other financial obligations.
When to File
Unfortunately, many people who find themselves struggling with financial difficulties wait and wait before taking any action. Maybe it is because they hope that something will happen that will turn things around. Or they may just not want to face the overwhelming issues that need to be dealt with. Whatever the reason, it is important to know that you do have options that can solve these difficulties. The sooner you meet with a bankruptcy attorney, the sooner you can begin rebuilding your credit and start feeling positive about finances again.
If you need a new start with your finances or some guidance, you should consider contacting an experienced bankruptcy lawyer Arlington TX residents can trust. At Brandy Austin Law Firm, PLLC, we can help you get to a state of financial peace and have a fresh start. If you are considering filing for bankruptcy consider contact one of our compassionate Arlington, TX bankruptcy lawyers.