Chapter 7 Bankruptcy

If you are considering filing a bankruptcy petition in Houston, Harris County, Fort Bend County, Montgomery County, Waller County or Galveston County you need a Houston Bankruptcy attorney. This is no time to choose an attorney who occasionally dabbles with Bankruptcy cases and doesn't understand Texas bankruptcy law as relates to liquidation, unsecured debt, secured debt, creditor harassment, discharges, Texas median income means testing and your choices between federal or state exemptions.

Houston Bankruptcy attorney Vicky Fealy has devoted her entire 18 year legal career exclusively to practicing bankruptcy law and is one of a limited number of Houston area attorneys Board Certified in Consumer Bankruptcy by the Texas Board of Legal Specialization.

Chapter 7 is sometimes referred to as straight bankruptcy or liquidation. This is because (contingent on your specific situation and assets) a Chapter 7 discharges or "wipes out" all of your unsecured debt. Whether a debt is secured or unsecured can be confusing and should be discussed personally with your attorney.

Bankruptcy provisions were established by the U.S. Constitution; therefore, all bankruptcies must follow the basic guidelines created by Congress and the U.S. Bankruptcy Courts.

THE TEXAS DIFFERENCE

Unlike most other states, the state of Texas gives Chapter 7 bankruptcy filers a generous homestead exemption. A home is the most valuable asset most people own, so the fact that Texas allows a generous homestead exemption for Chapter 7 may make Texas residents less likely to opt for Chapter 13. A debtor can choose to file for Chapter 13, but the federal bankruptcy code requires that debtors qualify for Chapter 7 bankruptcy.

Those considering a Chapter 7 filing must qualify through a "means test" to determine if they have the means to pay their creditors. They must file a Statement of Financial Affairs listing their assets, debts, and names and addresses of all creditors. Anyone filing Chapter 7 must fall below the state's median income for families. In Texas, that median income ranges from $38,940 for a single person to $66,381 for a family of four. Anyone above the median must qualify for a Chapter 7 under strict guidelines. If a debtor does not qualify for a Chapter 7, he or she may still file Chapter 13, which establishes a debt payment program.

The 2005 Bankruptcy Act requires Chapter 7 filers to attend a court-certified credit counseling class prior to filing and a personal finance management class after filing. In addition, the individual must attend a meeting of creditors, called a "341 hearing" after the code that established it.

Texas allows Chapter 7 petitioners the option of choosing the federal exemptions or the state's exemptions. Exemptions are property and assets that may be protected from seizure to pay creditors. The Texas exemptions include 10 acres of property (in town) or 100 (rural), $30,000 in personal property (livestock to home furnishings) and health aids, among others. The exemptions are increased for married couples filing jointly. Federal exemptions are also available for Texas residents who file bankruptcy. Choosing the appropriate exemptions is a critical part of the bankruptcy process so it is advisable to contact an experienced bankruptcy attorney to aid you. The bankruptcy does not eliminate voluntary liens, such as mortgages, student loans, alimony and child support, or tax debt.

Bankruptcy laws were created as a way for those people who have become overburdened by debt to get out from under and have a chance to start anew. In Texas, as in other states, an automatic stay is placed on all debts once the Chapter 7 petition has been filed. This means creditors cannot seek payment during the Chapter 7 process. If the court rules in favor of the petitioner, the debts are discharged forever.

Chapter 7 is sometimes referred to as straight bankruptcy or liquidation. This is because (contingent on your specific situation and assets) a Chapter 7 discharges or "wipes out" all of your unsecured debt. Whether a debt is secured or unsecured can be confusing and should be discussed personally with your attorney.

However; generally speaking, a debt is secured if it was incurred to buy specific collateral that the creditor retains an interest in and can repossess. Examples of secured debt include your house, vehicle, furniture and appliances. These debts are often reorganized in a Chapter 13.

Chapter 7 discharges your debts that are not secured. Examples of unsecured debt include most credit card debt, personal loans, judgments and medical bills. Chapter 7 allows you to discharge your unsecured debts and keep all of your exempt assets such as houses, cars and retirement accounts. Chapter 7 affords you the opportunity to make a clean start without the burden of bills.

Here is the list of counties we serve: Harris, Fort Bend, Brazoria, Montgomery, Chambers, Galveston, Matagorda, Colorado, Wharton, Fayette, Austin, Waller, Brazoria, Grimes, Madison, Walker and San Jacinto.

If you or your business in Texas needs the assistance of an experienced Houston Bankruptcy Attorney, call The Fealy Law Firm, P.C. today at 866-751-1087, or complete the contact form provided on this site to schedule your free consultation

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