Bankruptcy Law

Overwhelmed by debt? Get a Fresh Start.

Bankruptcy is a legal process which allows a person, who owes more money than he or she can currently repay, to either (1) repay a portion of the money over time under Chapter 11, 12, or 13, or (2) have the entire debt forgiven under chapter 7. Bankruptcy is also available to businesses, corporations, and partnerships. Upon filing bankruptcy, creditors must stop all collection efforts against you for a period of time or until they get permission from the bankruptcy judge to continue their actions against you. This protection is referred to as the “automatic stay”.

The attorneys at Alford & Muncey, PLLC are experienced bankruptcy attorneys and will walk you through the process during your initial free consultation and explore the options and the benefits that may be available to you under each chapter based on your unique situation.

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Is Texas Chapter 7 Bankruptcy Right for Me?

Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing  debts and need a “fresh start”. Chapter 7 bankruptcy generally wipes out or discharges your obligation to pay back your unsecured debts. An unsecured debt is one that has no collateral guaranteeing the debt. Examples of unsecured debts would be general credit cards, medical bills, and signature bank loans.

When you file for protection under Chapter 7, your creditors must immediately stop all attempts (outside of the bankruptcy proceeding) to collect debts from you.

Debtors whose debts are primarily consumer debts are subject to a “means test” designed to determine whether the case should be permitted to proceed under chapter 7. Our experienced consumer bankruptcy attorneys will walk you through the “means test” and determine whether you are eligible to file under Chapter 7. If so, we will prepare and file all the documents required to take you through the bankruptcy process. We will also represent you in hearings or meetings with creditors, the bankruptcy trustee or the court.

Under Chapter 7, you may claim certain of your property as exempt under governing law. In exchange for receiving a discharge of your unsecured debts, you agree to surrender all “non-exempt” property. A trustee may have the right to take possession of property that is non-exempt and use the sale proceeds to pay your creditors.

A Chapter 7 bankruptcy may discharge most, if not all, of your debts. However, you may still be responsible for most taxes and student loans; debts incurred to pay nondischargeable taxes; domestic support and property settlement obligations; most fines, penalties, forfeitures, and criminal restitution obligations; certain debts which are not properly listed in your bankruptcy papers; and debts for death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicated from alcohol or drugs.

Is Texas Chapter 13 Bankruptcy Right for Me?

Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all mortgage payments that come due during the chapter 13 plan on time.

Another advantage of chapter 13 is that it also allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 plan. Doing this may lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on “consumer debts.” This provision may protect co-signers.

Finally, chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.