Consumer Bankruptcy Lawyer

Taking out loans and making purchases on credit cards are among the privileges of being a modern-day consumer. However, changes in life circumstances can often create situations where you start feeling like you are drowning in debt. Daily calls from creditors, the threat of repossession, and the uncertainty about whether you will be able to afford necessities can all combine to create what can seem like an insurmountable level of stress. In such situations, declaring bankruptcy might seem like the only available option to get a fresh start and have a chance at recovering your financial health.

If you are considering filing for bankruptcy, consult an experienced Texas consumer bankruptcy attorney. They can help you understand the pros and cons of filing for bankruptcy, help you decide which kind is right for you, determine whether you qualify, and guide you through the filing process.

The seasoned bankruptcy law attorneys at Toronjo & Prosser Law have helped individuals and families struggling with debt in the Dallas-Fort Worth area for many years, and we are ready to put our skills to work for you. Call us today or contact us online for a free consultation to learn more about how our knowledgeable bankruptcy attorneys can help you.

What Is Bankruptcy?

Bankruptcy is a legal process in which an individual can ask a federal district court to wipe out (discharge) their debts. If the court grants the request, the debts are permanently discharged, and creditors are no longer permitted to take action to collect the debts. In essence, bankruptcy offers a legal means of giving an individual facing financial difficulties a fresh start.

While there are several forms of bankruptcy, most individuals use either Chapter 7 (liquidation bankruptcy) or Chapter 13 (reorganization bankruptcy). The type of bankruptcy a person chooses will depend on their specific circumstances and goals.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy allows consumers to discharge most of their debts after they liquidate their non-exempt assets to pay off whatever debt they can. This kind of bankruptcy is available to Texans who pass a means test, which shows they cannot afford to repay their debts. Among the advantages of filing for Chapter 7 are being protected from having creditors garnish your wages to repay debts and the fact that you get to keep your income going forward. Furthermore, you do not have to be committed to an ongoing plan.

Exemptions

Under Texas law, many debtors are eligible to keep most of their property after filing a Chapter 7 bankruptcy. Assets that are exempt from being surrendered or sold to pay debts in a Texas bankruptcy under Chapter 7 include:

Texas law offers an unlimited exemption for the value of any home. However, there are homestead limits of 10 acres within a city and 100 acres in the country (or 200 acres for a family). Proceeds from a recent sale of a home are also exempted for six months following the sale.
The Texas exemption for personal property is $30,000 or $60,000 for the head of a household. It applies to a wide range of personal property.
Burial plots, awards for civil litigation claims, many types of insurance benefits (life, health, accident)
Pensions for government employees
Tax-deferred retirement benefits, IRAs, and Keoghs
ERISA-qualified benefits
Tools of trade (equipment, boats, motor vehicles, books, tools)
Public benefits (medical and public assistance, unemployment compensation, workers’ comp)

While the Chapter 7 benefits in Texas are generous, they are not automatic. You must specifically request them. An experienced Texas bankruptcy attorney will help you maximize your exemptions so you do not lose more than necessary.

Dischargeable Debts

Most unsecured debts are eligible for discharge under Chapter 7, including:

Credit card debt
Personal loans
Medical bills

You may also have the choice to catch up on secured debts such as mortgages or car loans or to surrender your home or car.

Non-Dischargeable Debts

The following debts are typically not dischargeable under Chapter 7:

Child support
Alimony
Back taxes
Student loans
Court fees and penalties
Homeowners’ association fees, unless you sell or surrender your home
Personal injury debts due to DWI

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows you to reach an agreement with your creditors by reorganizing your debt and making monthly payments over three to five years. The court and your creditors must agree to the plan. Your monthly repayment amount is determined by what you can afford to pay. You make your payments to a trustee who is in charge of administering the payments according to the terms of the plan. When the term of the plan is over, the remainder of the debt is discharged, even if you have not paid it off entirely.

The advantages of Chapter 13 bankruptcy include the fact that the bankruptcy comes off your credit report sooner than a Chapter 7, allows you a greater amount of time to catch up on your mortgage arrears, and gives you the option of paying income tax debt while being shielded from aggressive IRS tax collection efforts.

How Can an Attorney Help?

An experienced consumer bankruptcy attorney can provide invaluable assistance throughout the bankruptcy process. They can assess your financial situation, explain your options, and recommend the most appropriate type of bankruptcy for your circumstances. Your attorney will help you complete the necessary paperwork, ensure you claim all eligible exemptions, and represent you in court proceedings. They can also negotiate with creditors on your behalf and help you develop a plan to rebuild your credit after bankruptcy.

Contact Toronjo & Prosser Law Today

The bankruptcy process can be intimidating and even anxiety-inducing. However, with the help of a knowledgeable attorney, the benefits of filing can far outweigh the initial discomfort. At Toronjo & Prosser Law, our seasoned Texas bankruptcy attorneys are committed to helping consumers understand their rights and options so they can begin putting down a solid foundation for a more stable financial future.