Chapter 7 is the most common type of bankruptcy and is generally the best option for filers who do not own a significant amount of assets. A bankruptcy trustee can liquidate your property or assets if they are not protected by some sort of exemption. A Texas bankruptcy lawyer will help you determine which of your assets are and are not protected under chapter 7 bankruptcy.
Your clothing, household items and personal items are usually protected under certain exemptions, but your property and other investments may be in danger of being repossessed by the government. If you are current on your car or house payments, you are typically allowed to keep them. However, the exemption laws can vary by state.
The Chapter 7 Means Test
The chapter 7 means test is required in bankruptcy filings in Texas to determine if you truly qualify to file for bankruptcy. The test is based on the median income of your state for your type of household. If you earn less than the median income of your state, you have essentially “passed” the means test and can qualify for chapter 7. If your income is too high, then you may have to file for chapter 13 bankruptcy. The means test is one of the main differences in chapter 7 vs. chapter 13.
The main disadvantage of filing for chapter 7 bankruptcy is that your credit report for the next 10 years will show that you filed for bankruptcy. This could hurt your ability to buy a car, home, get a credit card or make other economic investments.
What types of debt are not covered when I file chapter 7 bankruptcy?
Not all debts are eliminated when you file for chapter 7 bankruptcy. If you have any of these types of outstanding debts, you may want to consider filing for chapter 13 bankruptcy instead:
• student loan debts;
• IRS or state income tax debt;
• child support or alimony obligations;
• government fines or fees; and
• payment orders from a divorce decree.
Bankruptcy filings in Texas can cause a great deal of stress and confusion. You could be worried about passing a chapter 7 means test or have lingering questions about chapter 7 vs chapter 13 and which is right for you. Don’t go through this process alone and risk making a mistake. Call a Texas bankruptcy lawyer today for help in making this large financial decision.
Contacting a Texas Bankruptcy Lawyer
At Warren & Migliaccio, our goal is to protect you and your family so that you can take the necessary steps to proactively plan for your future. When financial circumstances outside of your control threaten your wellbeing, take control of your situation by contacting our Dallas law firm. We’ll guide you through the legal process so you can make informed decisions and choose the best course of action. If a personalized, teamwork-driven approach sounds like what you need for your case, call 1-888-584-9614 today. We’re here to help.
Visit us at: http://www.wmtxlaw.com/