The bankruptcy process is often assumed to be a difficult path to financial freedom due to its highly specific nature and attention to detail. In reality, the bankruptcy process isn’t all that confusing and certainly easier than some other forms of debt relief. As a leading Houston bankruptcy attorney these are some of the most common questions asked almost daily:
1. Am I going to lose all my possessions?— No. The liquidation process in a Chapter 7 may use some of your nonessential living items of value to satisfy a portion of your debt. They won’t take your couch or clothing, but you could find that fourth big screen plasma at risk. Texas exemption laws are actually the most forgiving in the country, so much of what you possess is protected.
2. Will my creditors sue me? — No. In fact, bankruptcy will put a halt to active and future lawsuits. However, the ability to protect against future lawsuits only applies to debts that were discharged in your bankruptcy case and only those of the petitioner (you). If you were to have a jointly held debt that was discharged in bankruptcy, the creditor could sue the other liable party on the debt account (usually a spouse).
3. Does my spouse have to file also?— No. There is no requirement that married couples file together. However, filing together can be beneficial for some couples that hold most of their debt jointly. The decision to file joint or separate from your spouse should be discussed with your Houston bankruptcy attorney.
4. Are taxes dischargeable?— Depends. Taxes like sales and property taxes are not eligible for a discharge in bankruptcy. Some income taxes may be eligible, but there are some additional criteria the taxes must meet in order to become part of the bankruptcy case and receive a discharge.