For people who are struggling with their debt, filing bankruptcy can give them a fresh financial start. If you have no hope of paying back everything you owe, you might want to consider talking to a bankruptcy attorney.
As soon as you file your bankruptcy paperwork, an automatic stay goes into effect. This stay prevents your debtors from trying to collect any money you may owe. The automatic stay also stops foreclosures, evictions, repossessions, and utility shut-offs.
This gives you time to work out with the court to figure out a plan to either repay and reorganize as in a Chapter 13 bankruptcy or liquidate as in a Chapter 7 bankruptcy.
The bankruptcy laws were put in place to abolish debtors prison. While it’s still not enjoyable filing for bankruptcy, the relief you will feel not having all that debt hanging over you is worth going through the process.
Bankruptcy will eliminate most of your unsecured debt such as credit card, medical bills, payday loans, and sometimes old tax debt. You will not be able to eliminate debts such as Alimony, child support, or court-sanctioned debt like paying for a criminal act.
Court Approved Payments
If you want to keep your home and your car, you must continue to make those payments. In a Chapter 13 bankruptcy, you will make court approved payments to cover the arrears. This period lasts from three to five years, depending on your plan. Once you have finished the payments, any remaining debt will be eliminated.
If you are unable to make the minimum payments on your credit cards, getting countless phone calls asking when you are going to make a payment, and you don’t have an answer for them, it may be time to contact a Houston bankruptcy attorney.