Chapter 7 bankruptcy is the ultimate in debt relief, and personal bankruptcy Plano TX can help individuals and families get out from under crushing debts, even if they have low income. Here are just some of the ways a personal Chapter 7 can improve your financial outlook.
Personal Bankruptcy Plano TX: 5 Ways Chapter 7 Bankruptcy Can Help
- Wipes out liability on many types of debts. The primary benefit of personal Chapter 7 bankruptcy is the bankruptcy discharge, a court order that says you are no longer legally responsible for your credit card bills, medical bills, personal loans and other unsecured debts. If you’ve personally guaranteed a business loan or cosigned on a loan for someone else, that liability goes away, too. You can even discharge some income tax debts under certain circumstances. There are some exceptions to the discharge, so discuss your debts with a personal bankruptcy lawyer Plano TX to find out if they qualify.
- Temporarily stops foreclosure. While Chapter 7 bankruptcy may not allow you to keep your house, it will definitely give you the breathing room you need to figure out your next steps if a foreclosure sale is scheduled. When you file any bankruptcy case, creditors cannot make any collection attempts because of the automatic stay — that means that the bank can’t foreclose on its mortgage, even if the sale was scheduled for the following day, so you have time while the bankruptcy is pending to find a new home and get your affairs in order. In some cases, a Chapter 7 discharge will encourage the mortgage company to work with you on a loan modification.
- Gets rid of judgment liens. In Texas, if someone sues you and gets a money judgment against you, he or she can record the judgment with the county clerk and put a lien on your house. That means that if you want to sell the house, you have to pay the judgment to convey clear title. In Chapter 7, you may be able to get rid of that judgment lien by filing a motion with the bankruptcy court and get that lien off the house by the end of your bankruptcy.
- Lets you walk away from expensive cars and homes. If you bought a big house or luxury car, but now you simply can’t afford them, Chapter 7 will allow you to surrender them to the lenders without owing a thing. Normally if a car is repossessed or a home sold at foreclosure, the bank can come after you for the difference between what you owed and the sale price. This is called a deficiency, and it can get quite high. If a lender agrees to let you off the hook outside of bankruptcy, the IRS will make you pay taxes on that forgiven debt as if it were income. However, if you surrender the property in Chapter 7, you can wash your hands of it and get rid of any deficiency balance without owing taxes.
- Lets you buy out your car for less than what you owe. When you’re paying on a car and file Chapter 7, you have the right to try to redeem it. Redemption allows you to make a lump sum offer to the bank for the car, and if the bank accepts, you pay the money and own the car outright. This is valuable if you owe more than the car is worth but need the car for transportation.
To learn more about personal bankruptcy Plano TX and the Chapter 7 process, call Collins & Arnove at (972) 516-4255 or fill out the form at www.ntb.wpmudev.host/contact-us/ to set up a free consultation with an experienced bankruptcy lawyer.
Collins & Arnove | Personal Bankruptcy Plano TX | 972-516-4255