Bankruptcy Laws Protect Americans
The word “bankruptcy” can conjure up images of desperation and destitution, though the reality is much less grim. Bankruptcy can put a stop to creditor harassment and give you a chance to get your head back above water. Bankruptcy attorney Jamie Kirk at Allen Stewart, P.C. shared some of the most common questions she gets from clients and her responses to them.
Can I keep my car?
Yes, as long as you keep making payments on the car or you own it outright. State and federal bankruptcy laws allow vehicles to be declared exempt property in certain cases.
Can I keep my house?
Yes, as long as you keep paying your mortgage and taxes, or if you own it outright. The Texas homestead exemption allows a debtor in most cases to protect an unlimited amount of value in their home provided the total property meets certain acreage requirements. However, the law states you must have lived in Texas for at least 40 months before claiming certain of Texas’ homestead exemptions.
I have an income of X, do I qualify for bankruptcy?
Your eligibility for either Chapter 7 or Chapter 13 bankruptcy depends on several factors not limited to but including employment, household size, current income and income over the past six months, and types of income. The only way to know for sure what process is right for you is to personally speak with a bankruptcy attorney at Allen Stewart, P.C.
How long does the bankruptcy process take?
A Chapter 7 bankruptcy takes on average between four to six months to complete once all fees are paid and the case is filed. A Chapter 13 bankruptcy, with its more drawn-out payment plan, can take between three to five years to complete.
Can I pay off my Chapter 13 repayment plan early?
Technically you can but it may not be in your best interest. Repayment plans are tailored to your ability to pay; the court or bankruptcy trustee may see your ability to pay early as an ability to pay more.
Can I protect my retirement fund/401K?
In most cases, yes. Both Texas state and federal bankruptcy laws protect retirement funds as exempt assets. However any recent lump sum deposits into retirement funds could face increased scrutiny.
Each client’s bankruptcy case is as varied and unique as the circumstances leading up to them. The best way to determine your best path forward is to contact the bankruptcy attorneys of Allen Stewart, P.C. today.