Filing Chapter 7 Bankruptcy
Our Houston Bankruptcy Lawyer Can Help
In today’s economy, many families are struggling through hard times. Job losses, medical emergencies and other difficult situations can lead to debt collector harassment as your ability to keep up with the bills decreases. In some cases, Chapter 7 bankruptcy can be the best solution to end creditor harassment and get deserved relief today. Explore all your options and settle on a solution by consulting an experienced Houston bankruptcy attorney who can address all your Chapter 7 bankruptcy questions. Contact the Law Office of Patrick T. Williams for a consultation about your financial situation and to find out how filing Chapter 7 bankruptcy can bring you and your family deserved relief.
Chapter 7 Bankruptcy Basics
Chapter 7 bankruptcy discharges most of your debts, wiping the slate clean and allowing you to rebuild your credit from scratch. Once you obtain a Chapter 7 discharge, your creditors can no longer pursue you for debts that you owe, unless bankruptcy law says the debts are not dischargeable. In most cases, Chapter 7 bankruptcy is suitable for people who have significant unsecured debts, such as credit card accounts and medical bills, and who have little or no ability to repay those debts.
Eligibility for Chapter 7 Bankruptcy – The Means Test
To determine whether you are eligible to file Chapter 7 bankruptcy, the bankruptcy court requires you to complete a means test. The means test is a form that calculates your currently monthly income based on the last six months. If your monthly income falls below the Texas adjusted median income, the law automatically presumes that you have filed your Chapter 7 bankruptcy in good faith. The means excludes some types of income, such as Social Security benefits.
If the means test reveals that your current monthly income is above the Texas adjusted median income, you will have to calculate certain deductions to see if you qualify for Chapter 7 bankruptcy.
Filing for Chapter 7 Bankruptcy
Completing Chapter 7 bankruptcy paperwork is an extensive process that gives the bankruptcy court detailed information about all your debts, income and assets. Once your Houston bankruptcy lawyer has drafted the necessary paperwork, you must file a formal bankruptcy petition with the appropriate bankruptcy court. Once you file your case, your creditors are automatically stayed from collecting any outstanding debts
Debts Ineligible for Chapter 7 Discharge
Although the goal of Chapter 7 is to completely discharge or eliminate your debts, there are some debts that the bankruptcy court cannot discharge by law. For instance, student loans generally are not dischargeable in bankruptcy proceedings, unless you can demonstrate that a government agency did not insure or guarantee the loan, or that paying the loan would cause undue hardship to you and your family. Federal and state income taxes are another type of debt that normally is not dischargeable in Chapter 7 bankruptcy proceedings. While you may be able to work out a payment plan or reduced amount of tax debt, you generally cannot discharge all tax debt. Finally, child support and alimony obligations survive Chapter 7 bankruptcy discharge – even if you file Chapter 7, you must pay back alimony and back child support.
Chapter 7 bankruptcy has advantages and disadvantages, and not everyone qualifies to file or should file. Only a skilled Houston bankruptcy attorney can properly advise you whether Chapter 7 bankruptcy is the best course and counsel you about the consequences. If you are facing significant consumer debts, contact the Law Office of Patrick T. Williams as soon as possible to see if Chapter 7 bankruptcy is right for you.
