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Texas Bankruptcy - How Chapter 7 Works

Texas Chapter 7 Bankruptcy — Bankruptcy Lawyer / Attorney R.J.Atkinson

Many people in Texas who are Knee Deep in Debt wonder how Chapter 7 Bankruptcy works. Sometimes a financial setback like a divorce, job loss, medical illness, lawsuit, or unmanageable credit card debt puts them in a situation to file for Chapter 7 Liquidation Under The Bankruptcy Code in order to obtain a fresh financial start. Chapter 7 Bankruptcy can be a quick and cost effective debt relief method to eliminate unsecured debt and start over.

So how does Chapter 7 Bankruptcy work?

First you have to be eligible to file for Chapter 7 . You have to take the Bankruptcy Means Test to determine your eligibility to file for Chapter 7. Bankruptcy law uses a standard mathematical formula to determine whether you can file for Chapter 7 or Chapter 13 . So if you are considering filing for Chapter 7 Bankruptcy relief, the first step is to take The Means Test. Click here to take the means test and determine whether or not you are eligible for Chapter 7.

If you are eligible to file for Chapter 7 Bankruptcy you and/or your lawyer prepares the petition or bankruptcy paperwork based on the information you provide. Formally, the bankruptcy papers are referred to as “the Petition, Schedules, and Statement of Financial Affairs”. The Schedules are organized into categories according to types of assets and information, and are labeled into “Schedule (A),” “Schedule (B),” etc... The Petition is the initial information, and the Statement of Financial Affairs is the answers and statements to questions for which are you Statement of Financial Affairs.

Upon completion of the bankruptcy paperwork, you and your attorney will go over the bankruptcy papers in order to make certain that everything contained therein is true and correct. Since you have to sign in several places on the various bankruptcy forms, it’s very important that you are accurate and understand everything you sign, as you are signing under penalty of perjury under the laws of the United States. If anything is inaccurate then it should be corrected before filing. Even though you can make changes or “amendments” to the bankruptcy papers, you want to be as accurate as possible.

After the papers are complete, the bankruptcy case is filed with the Bankruptcy Court. The filing of the bankruptcy case triggers the automatic stay. The Automatic Stay is like pressing a button that stops your creditors dead in their tracks. When your case is filed under any Chapter of the United States Bankruptcy Code the automatic stay goes into effect and most creditors CANNOT take any further action against you without permission of the Bankruptcy Court.

About a month after your bankruptcy case is filed, you will need to attend a hearing called a creditor’s meeting, which is also referred to as a 341 meeting named after section 11 U.S.C. § 341 of the Bankruptcy Code. In a bankruptcy proceeding, a meeting of creditors is when you are questioned under oath by your creditors, a trustee, an examiner, or the U.S. Trustee about your financial affairs. The general guide at the meeting is usually the bankruptcy paperwork, i.e. - the Petition, Schedules, and Statement of Financial Affairs. Even though it is an opportunity for your creditors to ask questions about your debts, unless there is fraud, dishonesty, or something wrong in the case, there are seldom any creditors that ever show up. The meeting is recorded electronically or transcribed by a court reporter since you are speaking under oath.

The primary reason of a 341 hearing is for the trustee to question you in order to determine whether or not you have any non-exempt assets available to sell and distribute amongst your creditors. Most 341 meetings are routine matters which are uneventful.

If the bankruptcy paperwork is deemed to be in order by the trustee and all goes well, the Bankruptcy Court will issue a discharge order in about two to three months after the 341 meeting. This discharge order or Discharge in Bankruptcy means that you are relieved from paying your debts. The creditors included in your bankruptcy filing can no longer attempt to collect the debts from you.

Chapter 7 Bankruptcy is best used when a person can’t realistically expect to repay a significant portion of their debts. Chapter 7 Bankruptcy is commonly known as ‘straight bankruptcy' or liquidation bankruptcy, which means the Chapter 7 Trustee will sell any non-exempt assets to pay your creditors. In most Chapter 7 cases the person filing usually keeps all of their property because Texas law allows debtors a generous amount of property which is exempt. Chapter 7 bankruptcy does not discharge all debts. Child support and other support obligations can’t be discharged, along with student loans, and certain kinds of taxes. Your house & car payments have to be current when filing for Chapter 7 or you will loose them. For many people in Texas, Chapter 7 Bankruptcy is the best way to get rid of debt, and keep most all of their property.

If you want to learn more about how Chapter 7 bankruptcy works, contact the Texas Bankruptcy Attorneys at The Law Offices of R.J.Atkinson. We have helped thousands get a fresh start in Bankruptcy and we might be able to help you.

If you live in Austin, San Antonio, Dallas, Plano, Waco, Houston, New Braunfels, San Marcos, or most anywhere in the State of Texas, contact the Texas Bankruptcy Lawyers at The Law Offices of R.J.Atkinson to see what Chapter 7 Bankruptcy can do for you.

If you have questions about Chapter 7 Bankruptcy in Texas Contact Us

Call the Texas Bankruptcy Attorneys: 800-436-9056

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Filing Bankruptcy can sometimes be the fastest way to get out of debt and may be the most affordable way to get a fresh financial start. Chapter 7 Bankruptcy can quickly wipe out your debts, increase your credit score, stop wage garnishments, get rid of credit card debt, eliminate medical bills, stop payday loans, stop bill collectors, erase negative credit reporting, and reestablish new credit after bankruptcy. RJ Atkinson – Bankruptcy Lawyers have payment plans to make filing Chapter 7 and Chapter 13 Bankruptcy affordable which include low cost flat fees for Chapter 7 that may be considered the cheapest bankruptcy attorney fees depending on the costs other bankruptcy lawyers charge. Chapter 13 Bankruptcy can save your home from foreclosure, save your car from repossession, lower monthly payments, reduce interest rates, get rid of late fees, reduce credit card interest, payoff high credit card debt, raise your credit score, stop creditor harassment, get rid of debt, reduce debt, eliminate creditor calls at work, stop collection calls, start over financially, discharge debts and/or be debt free in 3 to 5 years. IRS tax problems, tax levies, wage garnishments, back taxes, payroll taxes, income taxes can often be handled in Chapter 13 bankruptcy. Divorce/Bankruptcy – past due child support arrears, alimony, spousal support, and divorce debt can often be handled in chapter 13 bankruptcy. The Law Offices of RJ Atkinson handles debt consolidation, loan modifications, credit card debt settlement, debt negotiation, lawsuit defense, IRS problems, credit card lawsuits, TROs temporary restraining orders to stop foreclosure, forbearance agreements to stop foreclosure, FDCPA Fair Debt Collection Practices Act lawsuits, FCRA Fair Credit Reporting Act lawsuits, credit report disputes, debt collection lawsuits, adversary complaints in bankruptcy, bankruptcies, foreclosure workouts, mortgage short sales, real estate property tax disputes, civil litigation, commercial litigation, tax lawsuits, small business bankruptcy, corporate bankruptcy, business creditor representation, and most every kind of debt related issue or financially based legal problem on a case by case basis.
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