Filing for Bankruptcy in Texas
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When you make the decision to file for bankruptcy in Texas, there are a number of things you should consider before proceeding. The steps below, as well as understanding the process, will help guide you to a successful outcome. Before you visit a Texas bankruptcy attorney, consider implementing some of the following steps, and review some of things that will be expected from you during the process.
Credit Cards
Under no circumstances should you put any purchases on your credit cards before filing for bankruptcy in Texas. If you make purchases, knowing full well you’ll be filing for bankruptcy, it will imply you made them with the intent of never paying for them. Credit card debt, which was incurred 70-90 days prior to filing for bankruptcy, could be viewed as fraudulent in the eyes of the court. The court in turn can make you pay for these charges and exclude them from your filing.
Creditors
The monthly payments to your creditors should be stopped immediately upon making your decision. This money can be used to help pay for your legal fees. Any monies paid to creditors, when you know you’ll be pursuing a bankruptcy filing, is essentially lost money. It will have no effect on your credit score, as the bankruptcy filing itself will cause it to drop significantly. Use the funds to pay for legal advice and fees for the court.
What Type of Bankruptcy Should I File?
If you are an individual and not a business, you will be able to choose from Chapter 7 bankruptcy or Chapter 13 bankruptcy. Which one you choose may be need to be decided by a means test to determine your eligibility. If you qualify for Chapter 7 then it will be completed relatively quickly and will not require you to file a repayment schedule. However, if your income disqualifies you from filing for Chapter 7 bankruptcy, then you’ll move forward with filing for Chapter 13 bankruptcy. In this case, the courts will request that you pay income, which is deemed to be disposable, to your creditors. Chapter 13 is also used when a person wants to protect valuable property. Your repayment plan makes provisions for you to retain your property, because your obligations being met through the court ordered repayment plan.
Texas Bankruptcy Exemptions – 2005
Before filing for Bankruptcy in Texas, you need to be aware of changes that were made to exemptions, which were enacted by the Texas Senate in 2005. Texas has a very generous exemption program, which allows you to keep your property, automobile and other items of value. A Texas bankruptcy lawyer will review your assets and advise you on how the new exemptions will apply to your situation. In both cases a lawyer will assess your situation and discuss with you the different implications of both. Together you’ll decide the best course of action and then proceed with a bankruptcy filing.