Anyone struggling with debt problems knows the stress of making ends meet. Harassing phone calls and threats of foreclosure only make a bad situation worse. You may have heard of the benefits that bankruptcy can bring. In this article, a Houston bankruptcy lawyer answers common debt questions. It is important to learn a little about the process before deciding on a debt relief.
Houston Bankruptcy Lawyer Answers Common Debt Questions
- Do I have to include all my debts? Yes. First, the bankruptcy code requires you to list debts owed to all creditors. However, even though some debts are not eligible for a discharge, you are required to list every creditor. This includes money owed in personal business ventures, or to friends and family.
- Will all my debts be eliminated? It depends. Everyone has a unique debt situation. Not all debts are eligible for a debt discharge. Examples include some tax debts, domestic support debts, student loan debts, etc. These types of debt are are priority debts and must be repaid. However, you may be able to get these debts into a repayment plan for elimination.
- What will happen to my assets and possessions? Typically, you keep nearly all of it. Like debts, everyone has a unique asset and possession situation. Depending on which chapter of bankruptcy you file you may not have to give over any assets. Some non-exempt assets be liquidated to satisfy creditors in a Chapter 7 case.
- Can I keep my house and car? It depends. Your mortgage and car loan are secured debts, which require special treatment. Secured debts cannot be discharged easily through a Chapter 7. Filing for Chapter 13 is usually the better solution. A Chapter 13 bankruptcy allows you to repay these debts over a period of three to five years. If you file a Chapter 7 bankruptcy, you will need to reaffirm the debt separately. In a reaffirmation agreement, you outline a debt repayment plan and file it with your creditor. As a result, you get to keep the property as long as you satisfy the debt and continue your regular payments on schedule.
- How will bankruptcy effect my credit? It will be better. Because of your high debt balances and late payments, your score was bogged down. Since your debt balances are eliminated you can improve your credit by making timely payments. In the end, your score should improve well above what it was before bankruptcy.
To learn more about how bankruptcy can help you, contact a Houston bankruptcy lawyer today. We can review all of your debt relief options. Even those outside of bankruptcy for you to make the best choice.