When filing bankruptcy anywhere in the United States, the important phrase used commonly is “fresh start.” Why it’s so appropriate is different for each filer, but the main point is gaining a second chance financially. This blog guide focuses on helping Dallas residents choose between Chapter 7 and Chapter 13 bankruptcy. There are some key differences, and soon you will be able to make an educated decision.
Who can help?
If you’re a Dallas resident with lots of debt, you need an experienced bankruptcy lawyer who can put your hopes and dreams to work. You need someone with experience both in and out of the court room, someone you can ask many questions and always get clear answers, and someone who won’t charge you thousands extra if your case takes longer. That’s hard to find, but there are many talented bankruptcy lawyers who enjoy helping Dallas residents file bankruptcy. It’s not to say which one to hire, but base try to base it on experience more than rock-bottom prices.
Why Dallas Chapter 7?
Chapter 7 bankruptcy is really where your “fresh start” comes into play. The big benefit here for Dallas residents is being able to discharge tens of thousands (if not far more) of credit card and medical debt. Medical debts are, not surprisingly, the main reason for filing bankruptcy.
Say for example you and your husband are both working low pay jobs, have no health insurance, and have little extra income. You are in debt with credit cards and then one of you gets sick or hurt and has to go the hospital. It’s a nightmare scenario, but one we hear quite often. You will likely be in debt for thousands of dollars of medical bills, and have few means to pay them off. In terms of eliminating credit, medical, and mortgage debt, Chapter 7 bankruptcy is the answer. It technically liquidates your assets to pay off debt, but most lose little if any assets when filing. In some cases, Chapter 13 can be better for Dallas residents.
Why Chapter 13?
Chapter 13 bankruptcy is less a discharge and liquidation, more a “pay what you can” repayment plan. Some debts you have to pay in full, some debts you can pay fractions of, and to pay these debts you typically get 3-5 years. It doesn’t sound as good, but with Chapter 13 you can avoid foreclosure, unlike Chapter 7. Chapter 13 can save your Dallas home from foreclosure, but only if you file before the bank files the paper work. If you file bankruptcy before, the bankruptcy judge puts what’s called an “automatic stay” on all your assets and debts. You can then rework your payments in the repayment plan, paying what you can afford. If you have some income coming in and you have assets you fear losing, Chapter 13 is smart.
Choosing a Form to File
So if you have more unsecured debt, debts like credit and medical bills, Chapter 7 can be better for you. It discharges you from debts in a matter of months. If you have a lot of secured debt such as a mortgage, car, and other property, Chapter 13 is good because you can repay portions of your debt over time. It’s not a race to the finish line when choosing which form of personal bankruptcy is right for you, but it’s good to know in case you run into medical problems, credit debt, or fear your Dallas home going into foreclosure.
