Consumer Bankruptcy


Houston Consumer Bankruptcy Overview

In spite of what you may have heard about changes Congress made to the bankruptcy laws in 2005, bankruptcy remedies are still available for individuals and most people still qualify for some type of bankruptcy relief.

Of course, no one plans or ever wants to file bankruptcy, but recent uncontrollable events with the economy may have caused a loss of job or business failure. Bankruptcy relief is a vital tool for those affected by the downturn and gives individuals the opportunity to start fresh. If a financial disaster has led to a pending foreclosure, collection lawsuit, or wage garnishment, our local Houston bankruptcy lawyers can offer you free advice, helping you choose whether to reorganize your finances or discharge your debts.

There are primarily two types of bankruptcy relief available to Houston residents under the bankruptcy code. Chapter 7 and Chapter 13. Below is a general overview of the two chapters. In our Houston Bankruptcy site you will also find helpful and articulate articles walking you through the bankruptcy process and informing you of your rights and obligations in the bankruptcy process. We also cover alternative remedies to bankruptcy including Home Loan Modification Work-Out Assistance, Debt Re-Structuring and Debt Settlement, and Tax assistance.

CHAPTER 7 BANKRUPTCY – WHAT IS IT AND WHAT CAN IT DO FOR ME

Also commonly known as “Fresh Start” or “Straight” bankruptcy, Chapter 7 bankruptcy allows an individual to eliminate most or all of his or her debt while being allowed to keep certain property he or she may possess.

In many cases, a person is allowed to keep their home or car (secured debt), provided that they continue to make payments and are up to date on the loan.

Chapter 7 is designed to eliminate:

  • Credit Card debt(s)
  • Medical debt(s)
  • Personal loan debt(s)
  • Lawsuit debt(s)
  • Judgments – Unless fraud or criminal related
  • Deficiency debt(s) on repossessed autos and foreclosures
  • Personal Injury Debts – except driving while intoxicated and criminal injury.
  • Certain other exceptions may apply.

Chapter 7 is the most commonly filed form of bankruptcy in the Houston area and can allow an individual a new start. More and more people in Houston and surrounding areas are finding themselves struggling with debt they cannot control. Chapter 7 bankruptcy allows for their debt to be discharged and lets them gain control of their financial situation with a fresh beginning.

Be aware that Chapter 7 does not eliminate student loans except undue hardship cases, debts from certain types of taxes, alimony maintenance or support payments, fines, penalties and criminal restitutions, debts incurred through fraudulent conduct, debts incurred through intentional injury to person or property or debts from personal injuries caused by driving while intoxicated.

CHAPTER 13 BANKRUPTCY – THE ALTERNATIVE TO CHAPTER 7

Chapter 13 bankruptcy Houston allows a consumer to consolidate the debt while making convenient monthly payments to a trustee. Once the petition is filed in Federal Court by an experienced Houston Bankruptcy Attorney a trustee will be appointed and an automatic stay will be issued. A payment plan created by the bankruptcy lawyer is proposed which repays the debt over a three to five year period. The amount of the monthly payment and the duration of the repayment plan is based upon the following factors:

  • Monthly income of the person
  • Monthly expenses of the person
  • Amount and nature of the debt

The most common uses of Chapter 13 involve:

  • Repayment of mortgage arrears (back amounts owed) home
  • Restructuring of auto loans to save a vehicle

Chapter 13 in many cases is used by the experienced bankruptcy attorney to stop or halt a foreclosure of a person’s home. Under the plans secured debts are paid 100% on the dollar, while unsecured debts may be paid less than 100% on the dollar. An individual receives a discharge under Chapter 13 once the payment plan is completed.

FREE EVALUATION – DETERMINE IF YOU QUALIFY FOR CHAPTER 7 OR 13

At the Butler Firm we have developed an online evaluation form which you can fill out and submit directly from our website. Once the evaluation form is received in our office a qualified and experienced Houston bankruptcy attorney will evaluate your responses and then contact you either by phone or e-mail, whichever method you prefer, and let you know whether you qualify for Chapter 7 or Chapter 13.

To complete the evaluation form for your free evaluation by an experienced Houston Bankruptcy Lawyer visit our free bankruptcy evaluation page.