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Bankruptcy FAQ

Is bankruptcy right for you? Do you qualify for bankruptcy? Below are answers to frequently asked questions compiled by Kolb & Murray, P.C., in Seguin, Texas. If you would like to speak with an experienced attorney about your case, please call 830-386-4801.

Do I Qualify For Bankruptcy?

In the U.S. Bankruptcy Code, there are two chapters (types) of personal bankruptcy: Chapter 7 and Chapter 13. There are strict financial guidelines about who qualifies for which type of bankruptcy.

Usually, the question about whether someone qualifies for bankruptcy is centered on Chapter 7 bankruptcy, the bankruptcy that allows a debtor to discharge many of his or her debts. To determine whether you qualify, you will need to fill out a document that is commonly referred to as the Chapter 7 means test. This document looks at your income and expenses to determine whether your income is low enough to qualify for Chapter 7 bankruptcy.

Generally, if you and your spouse both earn an income and feel overextended, you will probably want to file under Chapter 13. If, however, you are unable to earn an income due to a disability, or you are a single parent with significant medical debt, you may qualify for Chapter 7 bankruptcy. Discuss your specific case with attorney Kevin Kolb to learn whether you qualify for Chapter 7 or Chapter 13.

What Are The Immediate Benefits Of Filing Bankruptcy?

Bankruptcy stops creditor harassment, repossession and even home foreclosure. While you are going through bankruptcy proceedings, there will be an automatic stay on all of these collection efforts, giving you time to breathe while you seek debt relief.

What Can Be Discharged In Chapter 7 Bankruptcy?

Most debts can be discharged in Chapter 7 bankruptcy, including credit card debt, medical bills, debts with collection agencies, past dues on utility bills and business debts.

Debts that are not dischargeable include student loan debts, tax debt, child support and spousal support arrears, court fees and certain court debts such as personal injury claims involving drunk driving.

How Does The Chapter 13 Repayment Plan Work?

Your repayment plan will last three to five years, depending on your financial situation. Once the court confirms your plan, you will no longer make separate payments to your individual creditors. Instead, you will pay a trustee or arrange to have the payments deducted from your payroll. If you must incur new debt during the three or five years, you must consult the trustee.

What Classes Will I Need To Take?

You will be required to take a credit-counseling course and a pre-discharge education course that will take approximately 1.5 hour online or over the phone.

Do I Need A Lawyer?

Bankruptcy is a complicated area of law. There have been people who have filed under the wrong bankruptcy chapter, failed to supply the right documents to the court, misunderstood property exemptions/dischargeability and made other serious mistakes that have cost them significant time and money. By working with someone who knows the ins and outs of bankruptcy law, you will be able to protect yourself from unscrupulous creditors and move more quickly through the process and toward financial relief.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.