People facing severe financial distress have several debt relief options open to them with bankruptcy often seen as a last resort. Bankruptcy stops debt collection actions against you, giving you time to get your head above water and your financial life back on track. Different bankruptcy processes offer relief to clients with a wide range of debt loads and personal situations. A Dallas bankruptcy attorney has the knowledge and experience needed to help you find which bankruptcy plan is right for you and will help guide you through the bankruptcy filing process. While you are legally allowed to file bankruptcy without an attorney’s representation, doing so may cost you far more in the long run.
Is Bankruptcy Actually The Best Option?
A qualified bankruptcy attorney knows there’s more to debt relief than just filing bankruptcy. They will look at all of your records including your bills and bank statements and evaluate whether or not filing bankruptcy is the best option for you.
A local bankruptcy attorney can negotiate with your creditors and get them off your back, especially if they are acting maliciously or abusively. Federal and state laws dictate what measures creditors can take when collecting on a debt. Your bankruptcy attorney can make sure they follow the law.
Your bankruptcy attorney can also negotiate with your creditors, buying you extra time to right your financial ship. If you still have some income, your bankruptcy attorney can help you work with your creditors and develop repayment plans without filing for bankruptcy.
A bankruptcy attorney can also help you find a reputable credit counseling agency. These agencies can work with you to help you repay your creditors and repair your credit. They can provide other helpful resources as well as the classes debtors must complete before discharging their bankruptcy.
I Need to File Bankruptcy. Now What?
Once you decide filing bankruptcy is your best option, a local bankruptcy attorney in Dallas can help you decide which type of bankruptcy you should file. The most common bankruptcy types filed at Chapter 7 and Chapter 13 bankruptcies. Both types have different goals and require different circumstances.
Chapter 7 bankruptcy liquidates unsecured debt, giving creditors only what they are legally entitled to and debtors a fresh start. It can free clients from upside-down leases, dismiss business-related debt from failed ventures, and let them walk away from commercial leases.
Filing a Chapter 7 bankruptcy institutes an “automatic stay” order keeping creditors from hounding debtors over their debts. A court appointed agent called a “trustee” oversees the bankruptcy, selling the debtor’s nonexempt assets to pay off creditors. This may evoke images of debtors left with nothing following a bankruptcy auction, but Dallas bankruptcy clients are in luck.
Texas state laws offer exemptions for many assets including the debtor’s home, life insurance, retirement plan and up to $30,000 worth of personal property for a single person.
Dallas bankruptcy attorneys often suggest Chapter 7 bankruptcy for low-income debtors with few assets. Many Chapter 7 clients just fell on hard times because of circumstances beyond their control, such as catastrophic medical episodes or unexpected job loss.
Chapter 7 bankruptcies resolve in four to six months.
A Chapter 13 bankruptcy takes longer to complete than the more common Chapter 7 bankruptcy, with Chapter 13 clients typically having more assets to deal with. Chapter 13 clients usually have enough income to pay their debts, they just need more time to do so.
The Chapter 13 bankruptcy process bundles the debtor’s obligations into a single “bundle” resulting in the debtor making a single payment to the bankruptcy trustee. The trustee then distributes those funds to the creditors. While a Chapter 13 bankruptcy can keep clients from losing their homes, they must continue making their mortgage payments as normal.
Clients seeking relief through Chapter 13 bankruptcy must have no more than $394,725 in unsecured debt, including personal loans or delinquent credit cards. They must have less than $1,184,200 in secured debt, such as car loans or home mortgages.
This process takes much longer than a Chapter 7 bankruptcy as instead of simply liquidating the debts, the bankruptcy attorney formulates a negotiated repayment plan with the client. The client presents their tax returns, bank statements and other financial documentation to their bankruptcy attorney and they develop the repayment plan together. The client then completes an online credit counseling course, and once they pay all applicable fees the attorney files the bankruptcy with the court.
Chapter 13 bankruptcy clients must begin making payments within 30 days of filing. These bankruptcies typically conclude within three to five years.
What a Dallas Bankruptcy Attorney Can Do During Your Bankruptcy Process
After you obtain a bankruptcy attorney’s services, they will help guide you through every step of the process. They have years of bankruptcy experience and have seen it all – your circumstances won’t likely surprise or shock them.
Your bankruptcy attorney will help you complete all the required paperwork, including your schedules. In bankruptcy, schedules are documents that show the bankruptcy court a “snapshot” of your financial situation. These schedules are crucial as they show why you need bankruptcy protections.
Your bankruptcy attorney will also go after creditors who violate the automatic stay. Filing bankruptcy effectively pauses collection actions against you, and any creditors pursuing you after the filing are violating the law. If debt collectors keep harassing you after you file bankruptcy, your attorney can get them to stop or risk the court holding them in contempt. Even after your bankruptcy discharges, your attorney can protect you if a creditor tries to collect a debt discharged in the bankruptcy.
If you filed a Chapter 13 bankruptcy but your circumstances change during the process, your attorney can ask the court on your behalf to make either permanent or temporary adjustment to the terms, or even request an early hardship discharge.
A local bankruptcy attorney will stand up for you inside and outside the courtroom, representing your interests and protecting you from unscrupulous creditors. Hiring an attorney will not only help you get through the bankruptcy process but also help you learn financial habits and strategies that will keep you in good financial standing once you emerge from bankruptcy.
The Dallas bankruptcy attorneys of Allen Stewart, P.C. will help you find the best path forward, whether it be through Chapter 7 bankruptcy, Chapter 11 bankruptcy, or another option. Bankruptcy isn’t the end of your financial life; in fact, it can be the beginning of a new lease on financial freedom. Your first call with our experts is free and the longer you wait, the fewer options you have and the harder recovery will be. Contact us today.