Before making the decision to file for bankruptcy, it is recommended that you sit down with an attorney to discuss your financial situation and ask questions about what to expect before moving forward. Below are a few select questions that may help you decide if bankruptcy is right for you.
1. What Are the Alternatives?
Bankruptcy is not necessarily the only option. Sometimes a debtor believes they have no choice but to file for bankruptcy when, in fact, other options are available to avoid taking that step.
An attorney experienced in bankruptcy can evaluate the client’s finances, and make a recommendation on whether it is best to file now or to explore different alternatives before filing anything in court.
2. What Problems Could Be Expected?
In a perfect world, everything would go according to plan and would go smoothly. However, attorneys are trained to expect the unexpected. One of the best questions a client can ask the attorney is what types of problems could possibly occur.
If the attorney focuses their practice on bankruptcy specifically, odds are they have seen everything. It helps to be prepared to face any possible issues upfront so honesty is key when talking with the attorney. Discuss different scenarios so that both parties are aware of what could happen.
3. What Type of Bankruptcy Should I File?
A client has two different types of bankruptcy to consider in most situations. A Chapter 7 bankruptcy could be filed which allows the courts to sell all non-exempt property, such as rental property, certain stocks and bonds, etc. and use the proceeds to pay off debts. The filer then receives a discharge the remainder of the debts. This type of bankruptcy is otherwise known as a liquidation bankruptcy.
The other type of bankruptcy available is Chapter 13. This type of bankruptcy is known as a reorganization bankruptcy. The trustee works with the debtor to prepare a three- to five-year repayment plan whereby the debtor pays back qualified debts over this period of time before the remaining debt is discharged. A bankruptcy attorney should be able to advise the client on which course of action is best.
4. What Will This Cost Me?
Filing for bankruptcy comes with its share of expenses. Some bankruptcy attorneys charge an hourly rate, some charge a flat fee for their services, and others use a combination of the two. Most attorneys require an initial upfront payment, or retainer.
Aside from attorney fees, there are other legal fees and costs that come along with filing a bankruptcy case. The current filing fee for a Chapter 7 bankruptcy is $335. The filing fee for a Chapter 13 bankruptcy is $310. Additional costs may be incurred, such as administrative fees that will need to be paid to the bankruptcy trustee in a Chapter 13 case.
5. Will I Lose all of my Property?
This question highlights one of the biggest concerns debtors have when considering bankruptcy: are they going to lose everything they own? An attorney will explain the exemptions (asset protection) available in the State of Texas and will address how each of these affect the client’s property. The attorney will be able to point to which property will likely be liquidated in a Chapter 7 bankruptcy filing and which will be spared. These answers will help alleviate any anxiety that may lie behind this great unknown.
6. How Long Will This Take?
The client wants to get his or her life back now, and arguably, that goal is understandable. However, like any legal matter, things take time. How long the bankruptcy takes depends on the client’s situation and the type of bankruptcy being pursued.
If the client files Chapter 7 bankruptcy, then the average case usually takes anywhere from four to six months from the date of filing to the date of discharge, the order that wipes out the debtor’s debts. If Chapter 13 bankruptcy is being pursued, the client should be prepared for this to take a bit longer, as these cases can go anywhere from three to five years in length, depending on how the repayment plan is structured.
Contact a Texas Bankruptcy Attorney Today!
Facing a bankruptcy can be an intimidating process. We are here to walk you through it every step of the way.
Call the Law Office of Marilyn D. Garner now at 817.381.9292 for a free consultation to discuss how bankruptcy may help you to protect your assets and manage your debts.