Your options for filing bankruptcy Austin TX, and where to find specialist bankruptcy lawyers

 Bankruptcy gives an individual or a business the option to get a fresh financial restart by forgiving some debts that they cannot repay, or working out a repayment plan over an extended period of time, based on their assets available for liquidation. Although sometimes confused with insolvency, both terms are different, and have their distinct legal significance. Insolvency indicates the inability to meet debts, while bankruptcy is a legal adjudication that the debtor or the creditor has filed for this status. Filing bankruptcy Austin TX may be unavoidable in some circumstances, which will provide you wih immediate relief from creditors' harassment.  

  

Filing bankruptcy Austin TX under Chapter 7 can discharge your certain assets, so you won’t need to pay them anymore. As per the absolute priority rules, unsecured debts are discharged first, followed by secured debts. Examples of unsecured debts include child support, personal injury claims, and tax debts. Secured debts are backed by collaterals like a property, and the debtor can sell the backed property to recover their debt. Nonpriority unsecured debts are discharged in the last on a pro-rata basis. In order to filing bankruptcy Austin TX under Chapter 7, you must pass a Means Test. This is conducted to let only the deserving individuals file for Chapter 7 bankruptcy, and eliminate those who may try to use the bankruptcy provisions as a means to discharge their debt.   

  

What is a Means Test?   

To pass the Means Test, your average monthly income for the past six months should be less than the median income of the size of your family in the state of Texas. Moreover, you must undergo credit counseling within six months of filing bankruptcy Austin TX, before the Chapter 13 bankruptcy process begins. Your assets will be sold under the supervision of a federal court-appointed trustee to pay in full or part to your creditors, except exempt assets, such as tools of trade, personal vehicle of a certain value, and home of certain equity. However, if you have nothing but only exempt property, you may end up repaying no part of your exempt property while filing bankruptcy Austin TX.  

  

 

Filing for Chapter 13 Bankruptcy 

  

If you fail to pass the Means Test, specialist bankruptcy lawyers at Recovery Law Group may recommend you filing bankruptcy Austin TX under Chapter 13. A debt reorganization plan will be worked out in consultation with creditors by the court trustee, wherein you will be given the option to repay your debts over a period of three to five years. Chapter 13 bankruptcy will stop foreclosure proceedings that would have resulted in the seizure of your home by your creditors. You will pay an agreed upon some to the court trustee, that will effectively consolidate your debts into a single monthly plan.   

  

To qualify for filing bankruptcy Austin TX under Chapter 13, you must have a regular source of income, you must be current on your federal tax returns, and your total debts should be less than $3 million. You will be expected to begin making monthly payments within a month of filing for bankruptcy. Within 40 days of filing bankruptcy Austin TX, your trustee will convene a meeting, called a 341 Meeting, during which the trustee and your creditors can ask you questions about your finances. For more information on your bankruptcy options, please contact Recovery Law Group.