The reason most often used for someone to file for bankruptcy would be for a fresh start. Filing bankruptcy will do two things, relieve the debtor of some or all of their debt, and make sure that the creditors are treated fairly as well. There are two main types of bankruptcies, Chapter 7 and 13 are the two most common amongst personal bankruptcies.
A Chapter 13 is a reorganization of the debtor’s debt and is generally used when a debtor makes to much to file for Chapter 7. It is designed to allow people with steady income to pay back some or all of their debt over a 3-5 year period. Chapter 13 can be very complex and will almost alway require an attorney.
In Chapter 7 the trustee uses property that was given up by the debtor to sell. The trustee uses those funds to pay the debts to the creditors. Debtors are generally allowed to keep the money or property they receive after the bankruptcy has been filed. Chapter 7 can be filed Pro-Se or without an attorney but it’s always best to seek an attorney for help.
You might ask yourself,”Which chapter of bankruptcy is right for me” The best and really only way to find out is to do a “means test”. The “means test” will allow you to determine which your income would best qualify you for. Most people qualify for Chapter 7 as it uses a debtor’s personal assets to pay the creditors. Chapter 13 allows a debtor to pay their debts down monthly but is more complicated and not everyone will qualify to file. Chapter 13 is best for people with a predictable higher income.
As with most legal issue you’ll likely want to hire an attorney. In any legal field there are rules, deadlines and codes that need to be followed. Hiring an attorney is the best way to make ensure that a Bankruptcy is handled within the rules and guidelines set by the Bankruptcy court. An attorney, like bankruptcy lawyer Arlington TX relies on, will know the procedures and have the knowledge to ensure that you never miss a deadline pursuant to the Courts procedures. Failure to comply with the guidelines could result in your case being dismissed.
Thanks to our friends and contributors from Brandy Austin Law Firm, PLLC for their insight into bankruptcy.