You don’t lose everything in bankruptcy. The myth is that you have no protection or legal recourse to protect your home, car, savings, and other assets.
Often enough, you lose nothing by filing for help. Yes, there is a chance you might lose some things. But what bankruptcy does is protect you.
How does filing bankruptcy in Texas protect you?
Home Protection in Bankruptcy
In the state of Texas, the homestead exemption protects your home. The laws on the Texas homestead exemption are some of the best in the country. But they do require some legal help as no two situations are exactly the same.
Personal property is different: you can own up to $30,000 worth as an individual or $60,000 as a family. But a bankruptcy will protect your home from being taken if you file at the right time, with the right lawyer, and with the proper guidance.
In a Chapter 13 bankruptcy, you are not giving up on your debts, and your assets can fall within the debt discharge plan lasting 3-5 years. technically your assets can be sold by filing Chapter 7, but you have many options to protect them, including the homestead exemption.
Car Protection in Bankruptcy
First, by filing bankruptcy successfully a bankruptcy judge will put an automatic hold on all collections. This includes for your home, any medical or credit debts you might owe, and your car. They cannot take your car for some time. If you can somehow work the payments for the car into your budget, you can protect it even in a Chapter 7 bankruptcy. If on the other hand you are filing Chapter 13, you are paying on the car in installments, and you have legal protection.
Credit Card Debt
As just noted, collections against you will be put on hold for some months after filing Texas bankruptcy. Creditor harassment may entirely stop. This is likely the best news of the day.
If you file Chapter 7 bankruptcy, credit card debt falls within the debt which can be discharged. There are some laws to know. You cannot just spend thousands of dollars before filing and expect that to be discharged. But if you have a credit card debt you simply cannot pay, a common reason for filing, Chapter 7 bankruptcy can discharge it.
Credit card debt is not the most common culprit in filing bankruptcy in Texas. No, the most common reason is medical bills. These too fall within the guidelines of a Chapter 7 discharge. Even a two week stay can lead to tens of thousands in medical debt. If you’re eligible for bankruptcy, you can discharge it.
Lawyer Expertise
Should you file Chapter 7 or Chapter 13 bankruptcy? How does the homestead exemption work? What debts can be discharged? A lawyer is invaluable when you are filing. Simply put, he or she may be your best protection. An experienced Texas bankruptcy lawyer can ensure you fill out all documents correctly, that you are indeed eligible for bankruptcy, that your assets are protected, and that all your debt is discharged.
