Chapter 7 Bankruptcy

If you’re living under a burden of debt which is so heavy that you can’t see any way out, filing for bankruptcy protection may be an option. It’s certainly not anyone’s first choice and also not something to be entered into lightly, but in some cases, bankruptcy can be the only realistic way to extricate oneself and start living without the non-stop stress which being deeply in debt can bring.

There are two types of bankruptcy protection which are commonly filed for by individuals in the Dallas metropolitan area. These are Chapter 13 bankruptcy and Chapter 7 bankruptcy. Dallas consumers in search of relief from debt may find one option or the other to be more suitable to their circumstances, though the process of filing for bankruptcy begins in much the same way regardless of which type of protection the debtor is filing for.

The first step in filing for bankruptcy is to receive credit counseling from a counselor which is approved by the federal bankruptcy court which covers your area. This counseling must be completed and a certificate issued by the agency which provides the counseling before the debtor may file for bankruptcy protection. This requirement may be waived in some cases, though this is exceedingly uncommon, so consumers should assume that this requirement needs to be met.

Chapter 7 vs. Chapter 13 Bankruptcy

In both Chapter 7 bankruptcy and Chapter 13 bankruptcy, Dallas area residents should meet with an attorney who is experienced in bankruptcy proceedings to advise them. Working with a lawyer is all but a necessity when filing for bankruptcy, since the laws are too complex for the average layperson to navigate successfully on their own.  Failing to get expert advice and assistance from legal professionals could result in a rejected filing, leaving the debtor worse off than when they began.

Chapter 7 bankruptcy generally results in most or all of the debtor’s obligations being completely discharged by the bankruptcy court. There are some types of debt which may not be discharged through bankruptcy proceedings, but most consumer debt may be discharged through a Chapter 7 proceeding. In this type of bankruptcy protection, the debtor may have to forfeit assets in order to partially repay their creditors, though if desired and if the debtor has the ability to continue making payments, they may be able to reaffirm some debts in order to retain assets such as their home or vehicle.

By contrast, debtors who seek the protection of Chapter 13 bankruptcy will generally end up repaying a significant portion of their obligations, albeit on a repayment schedule which is designed to be easier for them to meet. The debtor’s obligations may be reduced and will usually be rescheduled to allow them to make payments over the next three to five years.

Which type of bankruptcy protection is best for you? That all depends on your individual circumstances – if bankruptcy is something you’re considering, then it’s time to get in touch with Dallas, Texas Bankruptcy lawyer Rustin Polk, who has the experience in bankruptcy law you need to start living debt-free.