Toronjo & Prosser Law represents both businesses and individuals in bankruptcy. Our Denton County bankruptcy law firm understands the challenges of debt and how they can complicate your life. We also know you probably have questions about the bankruptcy process. Does bankruptcy mean you have to give up everything you own? How will it impact your financial future?
Our Denton County clients know they have a trusted ally in Toronjo & Prosser Law. Our experience with the U.S. Bankruptcy Code and Texas exemptions place us in the unique position of being able to work with debtors regardless of their circumstances. We’re prepared to begin working on your matter today.
What Can I Expect With Bankruptcy?
Contrary to popular belief, bankruptcy doesn’t necessarily mean you’ve failed financially. In fact, it’s often a solution for people whose debt has gotten out of control through no fault of their own. A bad economy or trouble with a supplier can make it difficult to hold a job or generate revenue. That’s why individuals and businesses across the country who are unable to pay their bills have turned to bankruptcy.
Nonetheless, misconceptions about it abound. Some people think it means they will have to give up all they have or that they can never recover financially. However, these are not necessarily true. Debtors can usually keep most and even all of their assets, for instance. Moreover, bankruptcy allows debtors to start over and move beyond their past financial problems.
Bankruptcy has advantages and disadvantages, so professional legal counsel is essential. Our law firm will review your debt, discuss your options, and explain the bankruptcy process. We also advise clients on possible alternatives that may better fit their situation. If bankruptcy is right for you, we will represent you from start to finish with the compassion and dedication you deserve.
The Basics Of Chapter 7 Bankruptcy in Denton County
Financially distressed businesses and individuals have the option of choosing Chapter 7 bankruptcy, also known as liquidation bankruptcy. In a Chapter 7 case, a bankruptcy trustee will be tasked with selling off as much property as possible to pay off your debts. However, there are exceptions to what has to be sold off. These are known as exemptions and include small items of relatively little value like clothing, furniture, and household appliances. Homes and vehicles may also be exempt up to certain amounts.
Chapter 7 is particularly attractive to those who have unsecured debt and want a relatively quick and easy bankruptcy. It can be used to take care of the following types of debt:
- Credit card bills
- Medical bills
- Utility bills
- Unsecured court judgments
- Collection agency debts
- Personal loans
Not all debtors can qualify for a Chapter 7. In Texas, for instance, the debtor’s household income must be lower than the state’s median income. If the debtor’s income is over this amount, he or she must pass a means test that will take debt and disposable income into consideration.
Although individual debtors can use Chapter 7 bankruptcy to discharge their debts, businesses cannot. The business will have to close and use any remaining assets to pay debt off.
The Basics Of Chapter 13 Bankruptcy in Denton County
If you don’t qualify for Chapter 7 bankruptcy, or you don’t want to liquidate assets, you should consider filing for Chapter 13. Available to individuals and married couples (not businesses), a Chapter 13 is known as a reorganization bankruptcy. Instead of selling property to pay off debts, the filer will propose a 3-5 year plan to reorganize and pay them.
The debtor can discharge the bankruptcy as long as he or she makes all payments required under the reorganization plan. That means the successful Chapter 13 bankruptcy filer will usually be able to keep their property. But if the debtor misses payments, creditors may be able to resume collections.
The bankruptcy judge, trustee, and creditors have the right to review your proposed repayment plan before it can go into effect. Your lawyer can help you come up with a schedule that is fair and practical given your income and debt circumstances.
The Bankruptcy Automatic Stay
One of the most important protections offered by bankruptcy is the automatic stay. This is a court order that prevents creditors from collecting from debtors. It’s available to both Chapter 7 and Chapter 13 filers and requires creditors to cease the following collection efforts:
- Letters and calls
- Creditor lawsuits
- Foreclosures
- Repossessions
- Wage garnishments
If a creditor violates the automatic stay it can be penalized. But creditors can ask the court to lift the stay in some cases.
Toronjo & Prosser Law Is Ready To Help
Our Denton County bankruptcy law firm will take a look at your debt situation, along with other factors like your income, to help you determine whether bankruptcy is the best option. There are possible alternatives to resolving your debt problems such as debt consolidation, and we will discuss those with you as well.
Part of choosing between Chapter 7 and Chapter 13 is to think about what your goals are. For example, if you want the quickest available bankruptcy and don’t mind liquidating assets, Chapter 7 might be best. But if you want to keep as much property as possible by reorganizing your debt, Chapter 13 could be better.
Our firm will represent you from start to finish and answer any questions you have about the bankruptcy process. If a creditor violates your rights, we will take swift legal action. We will also contest any effort to lift the automatic stay. Lastly, we will explain potential risks that could result in the dismissal of your bankruptcy action.
Toronjo & Prosser Law is here to help you turn the page on your debt. Call us today to get started.