Chapter 7 and 13 are the bankruptcy options for individuals.
Chapter 7 is the debt discharge or liquidation form of bankruptcy, while Chapter 13 is more of a reorganization or debt restructuring.
Some tips to keep in mind
If you decide that bankruptcy is your best option, here are eight tips to keep in mind as you move forward:
- When searching for an attorney, make sure they have bankruptcy experience with cases similar to yours. Ask them how you can emerge from bankruptcy stronger than you went in. A knowledgeable bankruptcy attorney will have the answers you need to move forward.
- Talk to your bankruptcy lawyer about the different bankruptcy options and make sure you understand their implications. Have clear goals for your financial future, and discuss them with your attorney.
- Be prepared for bankruptcy filing fees and other ancillary costs for things like credit counseling. Chapter 13 is normally a longer process, so the fees end up being higher.
- Bankruptcy will have a significant impact on your credit report and your ability to obtain loans or other credit for many years to come. Be aware that bankruptcy records, including information about your spending habits, are available to the public.
- Some debts cannot be discharged in bankruptcy, such as alimony, child support, and recent taxes.
- Do not run up new debt and only make purchases that are necessary. If you take out a credit card and get further into debt, it can be considered fraud and non-dischargeable if the creditor convinces the court you had no intention of paying it back.
- Be honest about your assets. Do not try to hide assets or property by transferring them out of your name or to other people. The court often looks back at the time period prior to the bankruptcy filing date and can order those assets returned to the bankruptcy estate.
- Update your information with the bankruptcy court and trustee if any changes occur. You have a continuing obligation to provide accurate financial information as part of your bankruptcy filing. Hiding information may be considered fraud, which can lead to dismissal of your case and even lead to criminal charges.
Speak with a knowledgeable bankruptcy lawyer in Texas
To learn more about bankruptcy and student loan debt, contact a skilled Texas bankruptcy attorney at Marcos D. Oliva, P.C. today.