Determining if Chapter 7 Bankruptcy is a Good Choice for You

March 13, 2012 - PRLog -- A Chapter 7 bankruptcy filing discharges your debts so that creditors can’t collect against your property and equity. It’s not so simple – property that isn’t exempt can be used to repay some of your debts, and you’ll have to pass a means test in order to qualify for Chapter 7. If you don’t qualify, you still may be able to file for Chapter 13 bankruptcy, which restructures some of your debt and establishes a repayment plan that you must pay off over a 3- to 5-year period.

3 Considerations When Thinking About Filing for a Chapter 7 Bankruptcy
   
When financial stressors increase, we may be inclined to act without fully thinking through our options, including the ramifications of those options. So before you file for Chapter 7 bankruptcy, consider asking yourself if a Chapter 7 filing is appropriate for you by taking the following into account:

•   A Chapter 7 discharges only certain types of debts, so consider whether or not a Chapter 7 filing will discharge enough of your debts for the proceedings to be worthwhile.

•   In a Chapter 7 filing, you may have to relinquish some of your property to repay creditors.

•   Is your property exempt? Exempt property cannot be taken by creditors or a bankruptcy trustee to re-pay your debts.

Debts that aren't dischargeable include back child support, alimony, student loans, income taxes due from the past 3 years, debts related to recent luxury expenditures that amount to $550 to one creditor in the 90 days immediately prior to your bankruptcy filing, cash advances in excess of $825 within 70 days prior to your filing, court judgments as a result of an accident caused by a DUI.

Other debts are on the fence when it comes to eligibility for discharge, depending on whether or not the relevant creditor objects, such as debts incurred from fraud, willful property damage, larceny or a marital settlement agreement.  

Co-Debtors are Impacted by Your Chapter 7 Bankruptcy Filing

A vital detail that many overlook includes the involvement of co-debtors. A co-debtor is someone who cosigned a loan for you or someone who is in some other way equally liable for a debt you accrued (such as a business partner). A Chapter 7 discharge will remove your legal responsibility to the debt, but any co-debtors will still be responsible for the debt.

Filing for Chapter 7 may not be the right option for you, but you should speak with an attorney about how the bankruptcy code will affect your financial future after a filing. It’s possible a Chapter 13 filing may be more appropriate, but whatever the case is, an attorney will be able to help you prepare for the best and most feasible option for your situation.

When you are underwater in your debts and considering filing for Chapter 7 bankruptcy, ask yourself if a Chapter 7 filing is the right one for you. Consider the pros and cons of filing for a Chapter 13, alternatively, and then speak with a bankruptcy attorney in Texas who can help.

Contacting a Bankruptcy Attorney in Texas

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.