Personal Bankruptcy: Frequently Asked Questions

 Posted on April 21, 2023 in Bankruptcy Procedure

If you find yourself avoiding your mailbox and ignoring your phone when it rings because you dread being asked – again – to pay overdue balances on your debts, it may be time to start thinking about filing for personal bankruptcy. Depending on your unique needs and the nature of your financial situation, filing for bankruptcy could help you to achieve a fresh financial start and help to start building a strong, stable financial future.

If you are hesitating to file for bankruptcy because you do not yet have enough information about how the process works and whether pursuing a bankruptcy discharge is the best solution for your circumstances, you can begin formulating an informed approach by reviewing some basic information that is relevant to most filers.

What Are the Primary Differences Between Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 bankruptcy is made available to low-income filers. Eligible debtors are not required to repay their creditors before benefitting from a discharge. A small minority of filers will have some of their non-exempt assets sold by the trustee assigned to their case in order to repay creditors in order of legally-mandated priority.

By contrast, Chapter 13 bankruptcy allows filers to reorganize their debts so that they can partially or totally repay what they owe over 3-to-5 years. The court only requires a single, manageable payment on a filer’s debt load each month during this period. Upon successful completion of this repayment schedule, any remaining eligible debt balances will be discharged by the court.

Which Debts Are Eligible for Bankruptcy Discharge?

Most unsecured debts are eligible for discharge, with the notable exceptions of some tax debts and overdue spousal or child support. Additionally, discharging student loan debt – although not impossible – is often very difficult for filers.

Is Filing for Bankruptcy a Good Option for Me?

If you are primarily struggling with secured debt and a loan modification could potentially remedy your challenges, it may be worth speaking with an attorney about bankruptcy alternatives. However, most other significant debt-related challenges can be largely remedied via bankruptcy because either restructuring your debt or ridding yourself of eligible debt burdens can free up your remaining income to cover basic expenses and non-dischargeable debt obligations so that you can “get back on track” with your finances in a broad, sustainable way.

Schedule a Consultation with a Reputable San Antonio Bankruptcy Lawyer to Learn More

Getting answers to any questions you may have about the bankruptcy process is key to ensuring that you can make informed choices about your legal options. By speaking with our firm’s compassionate San Antonio, TX bankruptcy lawyer, you can benefit from answers that are personalized and tailored to your unique circumstances.

To get started, you can schedule a free case evaluation at the Law Offices of Chance M. McGhee by submitting a contact form on our website or by calling 210-342-3400. Depending on the nature of your unique financial situation, you could only be a few months away from achieving meaningful debt relief. We look forward to assisting you.

Source:

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics