The bankruptcy attorneys of Toronjo & Prosser Law serve individuals in Plano, Texas who find themselves faced with insurmountable debt. Our firm has managed to help numerous clients attain a fresh start and free themselves from the struggles and stresses of debt. We handle bankruptcy cases for both individuals and businesses, and we do so with an eye towards expediency and professional advocacy.
Toronjo & Prosser Law has extensive experience with the U.S. Bankruptcy Code and with Texas-specific bankruptcy exemptions. If your debt has become overwhelming or you’re being harassed by creditors and courts, let us discuss your options with you today.
Bankruptcy Basics in Plano, Texas
Bankruptcy is not a topic most people like to talk about. But the fact is, bankruptcy is not uncommon. Americans from all walks of life, and from all levels of personal and financial success, have found themselves in debt situations they simply had no control over.
Perhaps the economy took a bad turn, or a major client is unable to make payments to your business, or you lost your job because of downsizing and can’t pay your bills. There are as many reasons to file bankruptcy as there are bankruptcies. The good news is, debtors are often able to keep most or sometimes all of their personal property even in bankruptcy. There are many misconceptions out there, so it’s important to speak with a lawyer if you find yourself in financial trouble.
We understand that bankruptcy is not to be taken lightly. It’s a serious decision, and there are both advantages and disadvantages to it. Our objective is to help individuals and businesses fully understand how bankruptcy works and what it means to them, their credit, and their financial future. We also explore potential alternatives to bankruptcy that may serve our clients better. Toronjo & Prosser Law wants to see each and every client get back to their lives, and we have the knowledge and experience it takes to make that happen.
Understanding Chapter 7 Bankruptcy in Plano, Texas
Individuals and businesses can file for Chapter 7 bankruptcy, which is sometimes referred to as a liquidation bankruptcy. Under Chapter 7, a bankruptcy trustee will be assigned to your case. The trustee’s job is to sell off assets to pay off as much debt as possible. Chapter 7 is a good option for those with unsecured debt (not backed up by collateral). It’s a relatively quick and easy form of bankruptcy that can be used to clear such debts as:
- Credit card bills
- Medical bills
- Utility bills (electric, water, etc.)
- Unsecured judgments
- Collection agency debts
- Personal loans
Contrary to what many people believe about bankruptcy, not all of the debtor’s property will have to be sold in a Chapter 7 liquidation. That’s because certain assets are legally shielded from bankruptcy by what are known as exemptions. For example, small items like household appliances, furniture, and clothing are usually exempt. Homes and vehicles up to certain limits may also be exempt.
In order to qualify for Chapter 7, the debtor must meet certain income limitations. Generally, your household income must be lower than the median income in Texas. If it’s higher, you must pass a means test that will take your disposable income and debt into consideration.
Individual debtors who file for Chapter 7 may have certain debts discharged. But businesses do not have this option. Rather, the business will be closed and any remaining assets will be liquidated to pay off debt.
Understanding Chapter 13 Bankruptcy
If you don’t meet the requirements of a Chapter 7 bankruptcy, Chapter 13 may be an option. This is known as a reorganization bankruptcy because the goal is to pay off debts by reorganizing them rather than liquidating assets. Chapter 13 bankruptcy is for individuals and married couples, not businesses.
With Chapter 13, the debtor will propose a 3-5 year repayment plan for their debts. Provided the debtor sticks to the plan and makes all required payments, the bankruptcy will be discharged. The successful Chapter 13 filer is therefore usually able to keep his or her property, unlike with Chapter 7.
The bankruptcy trustee, creditors, and judge will need to review the proposed payment plan. But if it’s approved, the debtor will start making payments. Missed payments could allow creditors to resume collection efforts, so it’s essential that the debtor abides by the plan.
How The Automatic Stay Can Help You
One of the most important protections afforded by bankruptcy is the automatic stay. Chapter 7 and Chapter 13 filers receive an automatic stay upon filing. It is a court order that prevents creditors from collecting from you. These are some of the creditor actions that the automatic stay prevents:
- Wage garnishments
- Creditor lawsuits
- Collection letters and calls
There are penalties for violating the automatic stay, although creditors can ask the court to lift it in some circumstances. If the stay isn’t lifted, it will remain in place until the bankruptcy is discharged or dismissed.
What Toronjo & Prosser Law Can Do For You
Our firm will review your debt situation, along with other factors such as your income, to help you decide whether bankruptcy is right for you. We will also discuss your personal goals and how they may impact bankruptcy. For example, if your concern is keeping your property, Chapter 13 may be a better choice for you. If wrapping up bankruptcy as quickly as possible is more important, you may want to choose Chapter 7. We can also discuss bankruptcy alternatives such as debt consolidation.
No matter which filing you settle upon, we will serve you with dedication and compassion. Our Plano bankruptcy attorneys will explain how the bankruptcy process works and represent you from start to finish. We can also contest creditor motions to lift the automatic stay, identify any risks that could cause the bankruptcy to be dismissed, and take legal action against creditors that violate your rights.
Ready to get started? Still, have questions? Give Toronjo & Prosser Law a call now.