Common Questions
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Question: If I am employed full-time, do I have any choice except to file Chapter 13 Bankruptcy and pay back most of my debts over time?
Answer: The new means test is a complex set of calculations that takes into account the amount of your mortgage, car notes, household size, student loans, etc. It is possible for a family with a $60,000 gross income to still qualify for Chapter 7 and discharge most debts.
Question: Will I automatically lose my home equity if it is greater than $125,000?
Answer: If you have resided in your home in Texas for roughly more than two and a half years, you may still qualify for the unlimited homestead exemption allowed under Texas law in many cases.
Question: How difficult and expensive are the new classes required for debtors?
Answer: The initial debtor and education counseling class is a one-time, three-hour class that can often be done over the Internet or telephone. A common charge is $50.00.
Question: Will my employer, banker or other business associates be notified of my filing?
Answer: Your employer in a Chapter 13 case may be served a wage withholding order, but this is not true of a Chapter 7 case. There is no general notice given to anyone other than creditors. The filing itself is a public record and reflected in your credit report.
Question: Will I have to give up my home or car even if I can keep up those payments but not my credit cards?
Answer: You have the choice of whether to reaffirm secured debts such as a mortgage or car loan, or whether to surrender the house or car back to the creditor.
Question: Is the bankruptcy trustee like a prosecutor?
Answer: The bankruptcy trustee conducts a meeting after being appointed by the Court to ensure that the case is handled impartially and that creditors receive the benefit of any proceeds from any property exceeding the limits allowed under Texas law.
Question: Once a person has received their discharge in bankruptcy, does that person have to wait for years to buy a car or get any new credit?
Answer: There is financial life after bankruptcy. Creditors realize you cannot generally file again for many years and therefore you are more likely to repay new debts. You will certainly pay a higher rate of interest until you establish a stable pattern of handling debt.