Filing For Bankruptcy In Texas: What You Need To Know

Filing for Bankruptcy can be a difficult and stressful process. You are not alone, hundreds of Texans file for Bankruptcy every year. There are many things to consider before taking this step, such as your financial situation, your assets, and your liabilities. It is important to speak with an experienced bankruptcy attorney to discuss all of your options and to ensure that you are making the best decision for your unique situation.

If you are considering filing for bankruptcy, there are two primary types of bankruptcy that you may be eligible for: Chapter 7 and Chapter 13.

• Chapter 7 bankruptcy is also known as “liquidation” bankruptcy. This type of bankruptcy allows you to discharge most of your debts, including credit card debt, medical bills, and personal loans. In order to qualify for Chapter 7 bankruptcy, you must pass a “means test.” This test looks at your household income and compares it to the median income in your state. If your income is below the median, you will likely qualify for Chapter 7 bankruptcy.
• Chapter 13 bankruptcy is also known as a “reorganization” bankruptcy. This type of bankruptcy allows you to repay your debts over a period of three to five years. In order to qualify for Chapter 13 bankruptcy, you must have a regular source of income and your unsecured debt must be less than $394,725.

If you are considering filing for bankruptcy, it is important to speak with an experienced bankruptcy attorney to discuss all of your options and to ensure that you are making the best decision for your unique situation. Contact Howard Tagg for immediate assistance and to learn more about how he can help you.

Here are the top 5 misconceptions about filing for bankruptcy.

1. You’ll Lose All Your Possessions

While it is true that if you file a Chapter 7 bankruptcy, your non-exempt assets will be liquidated, but you might be surprised what can be considered exempt. You’re not going to lose your home or the only car you have. If you file a Chapter 13 bankruptcy, you will not have to liquidate any of your assets at all.

2. Your Credit Will Be Ruined Forever

Filing for bankruptcy does affect your credit, but it falls off your credit report after 7-10 years. Many people find that it is easier to build their credit back up after filing for bankruptcy than it is to continue fighting with collections agencies and trying to pay bills you simply cannot afford.

3. You Have to Be Completely Broke to File Bankruptcy

Although many people wait until they are broke to file, you don’t necessarily have to be and this is not always the best option. For individuals who are struggling financially but haven’t hit rock bottom, bankruptcy may be what keeps them afloat and allows them to rebuild a better financial future, faster.

4. You’ll Never Be Able to Buy a House Again

While it is true that it is more difficult to buy a home after filing for bankruptcy, this is only for a short period of time. Many mortgage lenders allow individuals to apply for a home loan well before the bankruptcy has fallen off their credit report.

5. Student Loans Can’t Be Discharged in a Bankruptcy

It’s true that most of the time, a student loan will not be discharged in a bankruptcy. However, there are some exceptions. An experienced bankruptcy attorney can help you determine if you may be eligible for a student loan discharge.

At the Law Office of Howard Tagg, we know how confusing filing for bankruptcy can be. We’re committed to helping our clients overcome the financial distress they are experiencing and build a better financial future by starting off with a clean slate. Contact us today for a consultation to discuss your financial situation and learn more about how we can assist you. Call now at (903) 581-9961.