If you are facing foreclosure, repossession, creditor harassment, lawsuits, or are overwhelmed with debt you have options. The Sparrow Law Firm can help you resolve your debt problems by helping you file for protection under the Bankruptcy Code. Call us today to discuss your options.
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CHAPTER 7— LIQUIDATION
This is the most common type of bankruptcy. It involves the liquidation of your debts by the Bankruptcy Trustee assigned to your case. Your estate is liquidated to pay off creditors claims. Chapter 7 is available to consumers with no income or whose financial situation will not allow the repayment of debt. If you qualify for Chapter 7 Bankruptcy your debts are discharged giving you a fresh start within a period of a few months.
CHAPTER 13 — DEBT REPAYMENT PLAN
This form of Bankruptcy permits certain debtors to propose a plan that would extend or reduce the balance of their credit obligations. It is designed for “wage earners” or those people earning a regular income with sufficient disposable income to repay their creditors. Under Chapter 13, you develop a repayment plan to repay your debts. The repayment plan will be for a period of three to five years. You are given a discharge after all the plan payments are made.
THE MEANS TEST
You are required to take the Means Test to determine if you qualify to file for Chapter 7. The Means Test is a calculation of your income and expenses for the six months prior to filing for bankruptcy protection. These numbers are compared with the median household income for a similar sized household in Texas. If you pass the Means Test you can proceed with a Chapter 7 filing. If you fail the Means Test a Chapter 7 filing is considered abusive and you will need to file for a Chapter 13 Debt Repayment Plan.
THE AUTOMATIC STAY
As soon as your bankruptcy petition is filed an automatic stay is imposed to prevent creditors from pursuing collection activity against you and your property. All collection activities are stayed while your bankruptcy is pending. Any attempt to collect them on a debt while the stay is imposed is a violation of federal law.
MEETING OF CREDITORS
The purpose of the Meeting of Creditors is to formally ask you questions about the information you provided in your filing. The meeting is conducted by the trustee assigned to your case. You will be sworn in before you answer any questions. The creditors listed in your filing have received notice of the meeting and may attend. If your case is a typical no asset case your creditor is unlikely to attend. The meeting may take anywhere from 5 to 15 minutes depending on the information provided in your filing.
When you receive a bankruptcy discharge you are relieved from any further obligation to pay your creditors and therefore given a fresh start. Your debts are wiped out and your creditors are prohibited from taking any actions to recover payments from you. You can now begin rebuilding your life and your credit.