Debt can accumulate quickly, and before you know it, you are beyond any ability to manage it. Debt impacts your credit history, but more importantly it negatively affects your quality of life. Creditors and third-party collection agencies can cause serious stress. Fortunately, even when you think a solution does not exist to your debt problem, there very well may be one. Filing for Chapter 7 bankruptcy in Texas is often the quickest, easiest, and most affordable way to discharge debts and get a clean slate.
At our free initial consultation I will review (for free!) your overall finances, debt, and life circumstances to help you determine if filing for bankruptcy is right for you. Then, I will guide you through the process so you never have to worry about deadlines or paperwork. Contact me today at 214-288-1917 to schedule a Free consultation. I handle cases in Dallas County, Collin County, Tarrant County, and all surrounding north Texas counties. I have been practicing bankruptcy law for 26 years, and pride myself on being available to clients personally and representing you from start to finish in your case. My cell number is 214-288-1917, and I am happy to share it with my clients. I want to help you!
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a type of bankruptcy that can benefit individuals and businesses. It is a fairly brief process, and at the end of the process the goal is for you to obtain an Discharge Order signed by the Judge. At that point, all debts that can be discharged, are discharged.
If you, or your business, have what are termed "nonexempt" assets, they can be liquidated to pay off debt. However, for consumer debtors (individuals and couples) that is a VERY rare occurrence. Most consumer debtors do NOT own non-exempt assets, especially in Texas, and they do NOT lose any property through the process of the bankruptcy. They simply receive a discharge of their debts and move on in life with a "fresh start." These are referred to as "no asset" cases. The court appoints a Trustee to review your assets and determine if any are worth liquidating, or even if they are allowed to liquidate any assets. Each state allows for a certain amount of assets to be exempted, which means those assets are shielded from liquidation. Texas is considered generous in the allowable exemptions for debtors, especially as it relates to a homestead. We will cover these technical issues in our initial consultation; but be assured, very few debtors should have any concern about losing assets to a Chapter 7 Trustee.
Eligibility for Chapter 7 Bankruptcy
Qualifying for Chapter 7 bankruptcy typically means being able to pass what Congress imposed in 2005 as the Means Test. The Means Test is a rigid formula imposed by Congress, similar to filling out a tax return, that determines (at least in Congress' eyes) whether you can pay some or all of your debts, and should file a Chapter 13 case; or whether you cannot pay off the debts and will be permitted to file a Chapter 7 bankruptcy and receive a discharge of debts without the burden of being forced into a Chapter 13 case to pay back some, or all, creditors.
Unlike many attorneys, I take the time to work through the Means Test with you at our initial consultation so you know with certainty whether filing a Chapter 7 is an option for you or not. We also cover what a Chapter 13 will look like for you if you cannot file a 7, or chose to file a 13 for strategic reasons.
How Much Does It Cost to File for Chapter 7 Bankruptcy in Texas ?
The cost to file Chapter 7 bankruptcy in Texas depends on the complexity of the case. My legal fees are always very reasonable. The range for a Chapter 7 consumer case is $1,200 (the classic "elderly client on social security situation") up to $2,500 if any complexity in terms of self-employment or prior businesses that were shuttered. The average legal fee cost (probably for 75% of my cases) is around $1,500, which is very reasonable considering my experience level and what competing law firms charge.
In addition, the Courts charge a filing fee. It is currently $338. The filing fee must be paid up front, and if a client is able to pay the legal fee prior to filing I certainly appreciate it. If not, we can work out a payout plan on the legal fee over the 90 days that the case is active. I cannot be a "creditor" after the case closes.
Due Diligence Checklist for Chapter 7 Bankruptcy
There are quite a few documents I will ask you to bring to our initial meeting. These are necessary to allow me to effectively analyze your situation and make the determination of what Chapter of bankruptcy you can (or may want to) file. This is a list of the typical documents I will please need:
- Current paycheck stub showing YTD numbers, and/or evidence of any other income received YTD.
- Tax returns for the last two years
- Divorce decrees and/or domestic court orders related to debt and/or support obligations
- Lawsuits, judgments, or liens, including tax liens or tax collection letters
I ALWAYS run the credit pulls through the bankruptcy software. It saves us both a great deal of time, as it puts the creditors reporting into the bankruptcy database and allows me to quickly and effectively analyze the Means Test impact. And since I have all of those creditors in the software, your time spend compiling all of your creditors is greatly reduced.
What Happens When I File for Chapter 7 Bankruptcy in Texas ?
After you file for bankruptcy, three important and immediate things happen:
- You are given a case number
- An automatic stay takes effect, which means creditors can no longer garnish wages or take collection action against you; and
- A bankruptcy trustee is assigned to your case––the trustee reviews all documents, verifies information, and oversees the meeting of creditors.
Once Chapter 7 bankruptcy discharge is granted, you will usually see your credit score improve over the ensuing 12 months, sometimes dramatically. A Chapter 7 bankruptcy technically stays on your credit report for ten years, but the practical impact is much shorter. My clients think I am kidding, but sometimes even before your case is finished you will be getting offers of new debt! Car creditors are generally very willing to make car loans upon discharge, and I have had many clients purchase a home as soon as 3 years after a Chapter 7 bankruptcy discharge. As you rebuild your credit, bankruptcy will begin to lose its negative effect on your credit score. Most clients usually exclaim at some point in the process, "why did I wait so long to file?"
Contact me to discuss representing you in your bankruptcy lawyer anywhere in the Dallas Fort Worth Metroplex Today
At The Law Office of Len L. Nary, I know how debt can impact an individual, a family, or a business. If you have difficulty paying bills because of the debt you or your company have accumulated, please do not hesitate to contact me today by filling out my online form or calling me on my cell at 214-288-1917. You can also email me at [email protected]. I will schedule a Free consultation so that you get the answers you need to all your financial questions, and can make a rational decision about proceeding with bankruptcy protection.