Lake Worth may be that little Texas city compared to Dallas, but when it comes to financial problems, it really doesn’t matter. Unfortunately, Lake Worth bankruptcies have been high in recent years. Recent research reports that the median income for Lake Worth residents is at about $40,000 a year. This is important because of the rise in bankruptcies and nationwide in past years.
You lose your job, you don’t have insurance and get a major injury with medical bills looming, or your home is about to go into foreclosure. What do you do next?
For personal bankruptcy, your options are Chapter 7 or Chapter 13. If you want to eliminate thousands in debt because you have little to no income, Chapter 7 is wise. If you have an income but want to rework your payments, Chapter 13 is very smart. Let’s go into the details even more.
Chapter 7
Chapter 7 bankruptcy is a liquidation. You file with Texas bankruptcy court, paying the fee of $299, and then a trustee is appointed to handle your case. This trustee will be in charge of liquidating some if any nonexempt assets you have. That means the trustee will sell your possessions to pay back your creditors. In most cases, you don’t lose anything.
You can discharge much of your debt, including credit card, mortgage, and medical bills. You cannot discharge taxes, alimony, child support, and time other debts.
Chapter 7 is smart if you have little income and sometimes if you have little assets. It only takes a few months to go through,and you get a fresh start financially. The majority of Lake Worth bankruptcies are Chapter 7.
Chapter 13
Chapter 13 bankruptcies are used less in Lake Worth and nationwide. About 25% of personal bankruptcy is Chapter 13, while 75% is Chapter 7. Chapter 13 is a debt repayment plan, not a discharge of debt. For example, if you have $5,000 in credit card debt, you will be reworking payments, but still paying for them. That’s the main reason more Lake Worth residents file Chapter 7. However, Chapter 13 can save your home from foreclosure; Chapter 7 cannot.
Foreclosures
It works like this. If you miss a few payments for your Lake Worth home, and foreclosure is on the horizon, you can file Chapter 13 and if successful a judge will put an “automatic stay” on your home. The lender cannot foreclose your property. If you’ve owned this home for years and love it, and if you’ve put a lot of time and money into it, Chapter 13 can effectively save it.
Credit Cards
On the other hand, if credit and medical debt is your main problem, Chapter 7 is better. It can also discharge mortgage debt, but you’ll typically lose the home in a matter of months unless you can afford to pay on it separately.
Creditors
If creditors are harassing you night sand day, both forms of personal bankruptcy can effectively stop it. So can an experienced Lake Worth bankruptcy attorney.
Lake Worth Bankruptcy Attorney
Does some of this sound like a textbook on legal information? That’s because it’s complicated to file bankruptcy. You need to hire an Lake Worth bankruptcy attorney to answer questions, solve problems, and help choose between Chapter 7 and Chapter 13.
