A “Fresh Start” bankruptcy is available in Chapter 7.
Chapter 7 is designed for individuals who are called debtors who do not have sufficient income or property to pay their debts along with ordinary household or business expenses.
Under Chapter 7, individuals domiciled in Texas may choose Texas or Federal exemptions. The exemption laws exist so insolvency doesn’t mean an individual loses his or her home, car or truck, house furnishings, clothing, retirement and other listed personal belongings. You are required to pay for exempt property, and in most cases, you keep what you pay for. There are exceptions to every rule, I would be happy to discuss your case with you in person. A typical Chapter 7 Fresh Start Bankruptcy is a “no asset case.” This means the individual or joint, if husband and wife, do not hold or possess any non-exempt property that the Chapter 7 Trustee will sell to pay the individual or joint debtors’ debts. A Chapter 13 Reorganization Bankruptcy should be considered if an individual or husband and wife have non exempt assets. In Chapter 13, debtors are allowed to keep non exempt property and pay their unsecured creditors the value of their non exempt property.
A Fresh Start Bankruptcy Discharge takes 3-4 months after the individual or joint debtors’ case is filed. A Discharge of the debtor’s debt means the legal obligation of the debtor is wiped out or eliminated. A creditor or entity who the debtor owes cannot legally require a debtor to satisfy a debt that has been discharged in a Chapter 7 Bankruptcy. Types of debts that are discharged can include: credit cards, medical bills, unsecured loans, payday loans, collection agency, overdrafts, and deficiency claims after repossession and the sale of an individual or joint debtors’ car, truck or home.
Debts that will not be discharged can include: debts secured by property that an individual or husband and wife want(s) to keep. In most cases, individuals or husbands and wives want to keep their home, car, furniture, and continue paying for these debts. Other kinds of debts that are not discharged in most cases is child support and student loans. Although, student loans can be discharged if an undue hardship exist on the debtor(s) or the debtor(s)’ dependent(s). Taxes, property settlement obligations, fines, penalties, and criminal restitution debts are not dischargeable. The most important thing to remember is to list all debts in a Chapter 7. Debts not listed are not dischargeable. In some cases an special proceeding may be filed in a Chapter 7 bankruptcy to have the Court or Judge determine as a matter of law if a specific debt is dischargeable or discharged. This special proceeding is called an adversary proceeding. Finally, debts for death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicated from alcohol or drugs are not discharged.
Call or email J. Brian Allen, North East Texas Bankruptcy Lawyer to schedule a free consultation to discuss your options and Fresh Start Chapter 7 Bankruptcy.