Frequently Asked Questions About Bankruptcy

Packard & Packard, PLLC, Proudly Helping Clients in Beaumont

When considering bankruptcy, many people have similar questions and concerns. To better serve the needs of our clients, we have compiled a list of some of the most common questions.

Not sure if bankruptcy is right for you? Learn more below.

Will bankruptcy eliminate all my debts?
Bankruptcy may discharge most or all your unsecured debts depending on whether you can afford to pay them. There are some exceptions to this. Child support and alimony, for example, are not discharged by bankruptcy. Likewise, student loans usually are not discharged. There are other debts that may not be dischargeable, such as those incurred through fraud. Still, other debts, like federal taxes, may be dischargeable only if certain conditions are met. While there are some debts that may not be dischargeable, a bankruptcy plan may allow you to satisfy these debts through payment and get them behind you. Secured debts may be satisfied through a payment plan or other treatment pursuant to a bankruptcy plan. Different forms of debt relief are available depending on whether you file under Chapter 13 or Chapter 7 bankruptcy.

Will bankruptcy affect my credit?
Yes. Bankruptcy can appear on your credit record generally for up to 10 years. However, once you have completed the bankruptcy process, you may be in a better financial position to pay your bills and gradually rebuild your credit score. Other factors, such as chronic delinquent payments, also may seriously affect a person’s credit. Bankruptcy may bring finality to your debts and allow you to heal financially. Rebuilding one’s credit takes time and consistency.

Is Chapter 7 better than Chapter 13 bankruptcy?

Not necessarily. Chapter 7 bankruptcies are a lot faster than Chapter 13 bankruptcies, but they do not give the same kinds of protection that a Chapter 13 bankruptcy does. In a Chapter 7 bankruptcy, the trustee may take your non-exempt property (including your home if it is not fully exempt) and sell it in order to pay your debts. In a Chapter 13 bankruptcy, you may keep your non-exempt property by accounting for its value in the plan payment. Also, a Chapter 13 bankruptcy may allow for more favorable interest rates than a Chapter 7 reaffirmation. Finally, Chapter 13 may allow for more affordable payments on secured debt than a Chapter 7 reaffirmation. In some situations, such as where all of one’s property is exempt, and the person is current in his or her mortgage and car payments, a Chapter 7 may make more sense. Click here to see if you qualify for Chapter 7 bankruptcy.

Do I have to go to court?
Most cases are handled without the need for the person to appear in court. If there is an issue that the parties cannot resolve out of court, or if you are asking the judge for special consideration, you may need to attend a court hearing. Generally speaking, you will only be required to attend a meeting of the creditors. In this meeting, creditors have the opportunity to appear and ask questions if they so choose. The trustee’s office may ask questions as well. In the rare event that you need to appear in court, Packard & Packard, PLLC will be there with you to protect your rights and interests.

Why should I choose your firm to handle my case?
We have been practicing law for over 50 years and have experience in several areas of law that affect people in everyday life. Because of this, we are able to evaluate your case through a wide perspective. We understand the relationship between bankruptcy and the other issues people face. We truly care about the people we represent, and we enjoy helping real people solve real life problems. We strive to provide the highest quality legal representation that we can. We strive to keep our representation affordable, professional, and client-focused, and we offer a free case evaluation to help people gain a better understanding of their legal options.

More Questions? Call Packard & Packard, PLLC.

If you have questions or would like to speak further about your situation, please contact our Beaumont bankruptcy office at your earliest convenience. We would be happy to discuss your case with you and explore the options available to you.