No one enjoys being in debt and finding no way to pay off those obligations. When no amount of budgeting or special arrangements seems to take off the pressure, the time has come to consult a bankruptcy lawyer in Fort Worth. Here are some of the questions that the client will want to ask during the course of that first meeting.
Is Bankruptcy an Option for Everyone?
As the bankruptcy lawyer in Fort Worth will explain, not everyone is eligible for bankruptcy protection. Current laws establish come criteria that the debtor must meet in order to secure protection from the court. The lawyer will look closely at the type of debt the client has, the amount of income generated each month, and what assets could be converted into cash and used to settle some of those outstanding debts.
What Are the Forms of Personal Bankruptcy?
The lawyer will explain that individuals may qualify for one or both types of personal bankruptcy. A chapter 7 action involves a trustee selling any assets that the court believes are not essential for the client to maintain a reasonable standard of living. The proceeds from the sale are disbursed to creditors in compliance with a plan approved by the court. Any remaining debt is then discharged and no longer owed. Typically, this process can take a few months.
A chapter 13 bankruptcy allows the debtor to repay debts over a period of three to five years. The payments are tendered directly to the court, who then distributes them to the debtors. If any debt remains at the end of the five-year period, it is discharged by the court.
What Is Priority Debt?
Priority debt is debt that cannot be discharged in a chapter 7 action. Examples include back taxes that do not meet a narrow range of qualifications, student loan balances, and back child support. People with these types of debt are more likely to file a chapter 13.
For anyone who thinks bankruptcy may be the best solution for them, visit website today and set up a consultation. Doing so will be the first step in getting back on a sound financial footing.
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