In Texas, filing for bankruptcy requires a clear understanding of the different aspects of the process. You need to understand how Chapter 13 is different from Chapter 7. In Chapter 13 bankruptcy in Texas, you create a plan for repaying your debts and turn it over to the bankruptcy court.
Regular installment payments will need to be made to a Chapter 13 trustee for you to follow through with this payment plan. When your Chapter 13 bankruptcy is in process, and you are making regular payments, an automatic stay is put into effect that stops collection efforts.
Not sure which form of bankruptcy is best suited to your needs? Daniel Ciment, a bankruptcy attorney in Katy, TX, can help you sort through your financial picture and make an informed decision about your next steps.
1. Know What Chapter 13 Bankruptcy Is Best For
The best applicants for Chapter 13 bankruptcy will include those who have faced a short-term financial crisis like an illness, significant expense, or job loss. Suppose you have had an unexpected crisis that caused you to fall behind financially but you can still make monthly payments because of consistent income. In that case, you could get a fresh start and some breathing room to begin putting your financial life back together.
Catching up with past due payments over a 3 to 5 year period and the automatic stay can significantly help people in this situation. Chapter 13 is different from Chapter 7 because, in Chapter 7 bankruptcy, you turn over all non-exempt property to the Chapter 7 trustee and do not pay off your debts.
For those who do not have the means to pay back the majority of their debts, Chapter 7 is the better choice because it allows for a fresh slate and the use of that property to pay down what debts can be covered. For a person without an income, Chapter 13 won’t allow you to create a meaningful payment plan.
2. A Bankruptcy Attorney Can Play a Big Role
At Ciment Law Firm, PLLC, we can help you determine whether or not a Chapter 13 plan is possible, help you create your budget and plan to submit to the court, get the acceptance of your plan by contacting creditors and filing all of the proper forms with the court. It’s stressful enough to go through this process as it is, but a lawyer can help you prepare and navigate the system.
We can also attend the creditors’ meeting and the confirmation hearing and assist you in getting confirmation of your Chapter 13 plan. Considering that even a small mistake on your filing paperwork could jeopardize your ability to move forward with Chapter 13 or get your repayment plan approved, take things seriously when you’re ready to file to have the best possible chance of leveraging bankruptcy.
3. You Must Complete a Credit Counselling Briefing First
Since October 2005, any person petitioning for bankruptcy under Chapter 13 or Chapter 7 must complete an approved credit counseling briefing. Your Texas bankruptcy attorney must file this certificate with your petition. If you fail to complete this training and file the certificate, your case will be dismissed, meaning that your creditors can take collective action during this time.
4. Prepare for the Creditors’ Meeting
The creditors’ meeting is typically an informal process that your attorney can help you prepare for as it does not last longer than 15 to 20 minutes. It usually occurs within 30 to 45 days after your petition is filed.
Your attorney should have done some leg work to help you prepare for this process and understand the possible obstacles that might emerge at the creditors’ meeting. If you have done the appropriate work and put together a solid plan to repay your debts, most creditors’ meetings are a quick formality.
5. Understand Your Payment Plan is 36 to 60 Months Long
The purpose of Chapter 13 bankruptcy is to allow people who have financial difficulties in the short term to maintain their property while getting caught up on past due balances.
The bankruptcy petitioner is responsible for keeping current payments current while making monthly payments towards past due balances in a debt prioritization strategy. Leftover income goes to pay unsecured creditors, and when all payments have been made as scheduled, unsecured debt that stays at the end of the plan can be discharged.
Do you have more questions about filing for bankruptcy in Texas? Reach out to a competent, responsible legal team to discuss your next steps and whether Chapter 13 is the right move for you. Our dedicated team at Ciment Law Firm, PLLC, is committed to helping clients overcome financial burdens by guiding them through every step of the legal process.
If you or a loved one is struggling to manage debt, we may be able to help. Contact Ciment Law Firm, PLLC today at (281) 937-3949 or fill out the form on our website to schedule your free consultation.
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Disclaimer: The information in this document is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
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