Frequently Asked Questions
Our Houston Bankruptcy Lawyer Provides Answers
While there are some general rules about bankruptcy, and no two cases are alike. Therefore, it is essential that you consult with an experienced Houston bankruptcy lawyer at the Law Office of Patrick T. Williams for a personalized evaluation of your case. Here are some answers to frequently asked questions to prepare you for your appointment.
I heard that bankruptcy laws have changed. Can I still file?
There have been major changes in bankruptcy laws in recent years, but most people are still are eligible to file.
What is Chapter 7 bankruptcy?
In a Chapter 7 bankruptcy case, the bankruptcy court discharges most of your unsecured debts, such as credit cards, medical bills and personal loans. If you have a secured debt, such as a mortgage or a car loan, you can discharge these debts if you surrender the house or the car.
What is Chapter 13 bankruptcy?
A Chapter 13 bankruptcy requires you to enter into a payment plan to pay some or all of your debts off over time. Chapter 13 bankruptcy may be the best way to catch up on secured debts, such as mortgage and vehicle loan payments.
The means test determines whether you are eligible to file Chapter 7 bankruptcy; if you are filing a Chapter 13 case, the means test determines how long your case must be and potentially the amount you must pay. Under the means test, the bankruptcy court calculates your average monthly income over the last six months.
How long will bankruptcy remain on my credit report?
A bankruptcy can remain on your credit report for up to ten years. However, if you were having difficulty paying your bills prior to your bankruptcy, you probably already have suffered damaged to your credit. Following your bankruptcy discharge, you may find that it is fairly easy and quick to reestablish your credit.
Should I file bankruptcy?
Only an experienced Houston bankruptcy lawyer can help you decide whether you should file. Depending on your financial situation, your current income and assets, as well as the degree of debt collector harassment that you may be experiencing, bankruptcy may be the right choice for you.
Can I file bankruptcy more than once?
If you have a previous Chapter 7 discharge, you must wait eight years from the date you filed your previous Chapter 7 before you can file another Chapter 7 bankruptcy. If you have a previous Chapter 13 discharge, you must wait six years before you can file a Chapter 7 case. You can file Chapter 13 bankruptcy at any time, but you can only obtain a Chapter 13 discharge if you file your Chapter 13 at least four years after a previous Chapter 7 case or at least two years after a previous Chapter 13 case.
Can I keep any property when I file bankruptcy?
Yes. When you file Chapter 7 bankruptcy, you can keep all property that Texas and federal bankruptcy laws consider exempt from your creditors. When you file Chapter 13 bankruptcy, you can keep all your property and pay any non-exempt value over time. Consult with a Houston bankruptcy attorney to determine whether a Chapter 7 or a Chapter 13 case would allow you to protect your property while still obtaining debt relief.
What will happen to my home if I file bankruptcy?
In a Chapter 7 case, you can keep your home if you are current on your mortgage payments and if you can afford the payments. The Chapter 7 trustee will not take the home as long as the value of your home is fully exempt under bankruptcy law. However, if you default on your mortgage, the mortgage company can take your home and sell it through the mortgage foreclosure process. In a Chapter 13 case, you can keep your home and even save it from foreclosure by paying your arrears over time.
Will I be able to keep my car if I file bankruptcy?
If the value of your car falls within the permissible exemptions set forth by bankruptcy law, then you can keep your car during your bankruptcy proceedings. However, if your car is collateral for a debt that you owe, such as a car loan or personal loan, and you fail to make those payments as scheduled, the creditor holding the loan can repossess the collateral. You can use a Chapter 13 case to protect a car in danger of repossession. Contact Patrick T. Williams to find out how.
Will bankruptcy wipe out all of my debts?
Bankruptcy does not discharge child support, alimony, certain income taxes or student loans. You cannot discharge secured debts, such as mortgages and car loans, unless you give back the property that secures the loan. You also cannot discharge debts you obtained fraudulently. Houston bankruptcy attorney Patrick T. Williams can review your debts and advise you as to whether you will need to repay.
What happens to a co-signer on my debts if I discharge those debts in bankruptcy?
If you file bankruptcy on a particular debt and there is a co-signer on that debt, the co-signer is still responsible for the debt, and the creditor has the right to demand payment from the co-signer.
Does filing bankruptcy prevent debt collector harassment?
When you file bankruptcy, an automatic stay goes into effect, preventing creditors from further contacting you about debts that you owe and have not paid. If a creditor violates the automatic stay, the bankruptcy court may assess fines against the creditor.
If you are having financial problems and have questions about bankruptcy, contact Houston bankruptcy attorney Patrick T. Williams today for a free consultation.
