When you have tried other options to catch up on your debt, and you are still struggling, you may want to consider filing bankruptcy. Personal bankruptcy is a court protected plan to help those in financial stress to satisfy their creditors as much as possible.
As soon as you file the bankruptcy paperwork, a court action called the automatic stay goes into effect, and your creditors will be court ordered to stop contacting you regarding your debt. All phone calls, wage garnishments, foreclosure, repossessions and legal action regarding your debt must stop.
Chapter 7 bankruptcy liquidates your nonexempt assets. Your court-appointed Trustee will sell your assets and distribute the money to your debtors. Although rarely do the debtors lose their property due to exemptions in the law in this type of bankruptcy. Chapter 7 usually takes three to six months, and at the end of the period, your qualifying debt will be eliminated.
Chapter 13 bankruptcy is a court-approved repayment plan when you want to continue paying your mortgage to keep your home and all of your possessions. At the end of the three to five repayment period, any unsecured debt left will be eliminated.
Your court-appointed Trustee will decide if the plan you and your attorney provided is fair to you and your creditors. Once the plan is approved, the trustee will then manage the funds of the sale of any assets and monthly payments by you and will distribute the money to your creditors.
Before your bankruptcy can be completed, you must attend two court-ordered credit counseling courses and a meeting of the creditors (341 meeting).
If you are considering bankruptcy, contact a McAllen bankruptcy attorney to discuss what options you may have for your unique financial situation and give you a fresh start.