Chapter 7 bankruptcy (or a straight bankruptcy) is a liquidation proceeding. The debtor turns over all property that is not exempt to the bankruptcy trustee who then sells it to raise cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start".

One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.

WHAT IS A CHAPTER 13 BANKRUPTCY?

Chapter 13 Bankruptcy (or a reorganization bankruptcy). Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. If you have non-exempt property you would like to keep this may be the chapter for you.

HOW DIFFICULT WILL IT BE TO FILE CHAPTER 7 UNDER THE NEW BANKRUPTCY LAWS?

There will be more hoops to jump through and tougher regulations on Chapter 7 bankruptcy, forcing some people to have to file chapter 13, but in most cases you will be able to file chapter 7 with only a little bit more effort than before!

For more information please refer here.

WILL MY CREDITORS STOP HARASSING ME?

Yes, by law they are required too!

WHO WILL KNOW I'VE FILED BANKRUPTCY?

Bankruptcy filings are public records, but still hardly anyone will find out under normal circumstances.

WILL MY SPOUSE BE AFFECTED?

Your spouse will not be affected if they are not a co-signor for any of your debt!

Your bankruptcy lawyer will be able to guide you in this regard.

WHAT ARE THE MOST COMMON REASONS FOR A CHAPTER 7 BANKRUPTCY?

The most common reasons for filing bankruptcy are:

Unemployment, Large medical expenses, Seriously overextended credit and Marital problems.

Up to half of bankruptcies are caused by unexpected medical bills.

WHAT ABOUT CREDIT CARDS?

Whether a debtor keeps credit cards after filing bankruptcy is up to the credit card company. If you are discharging a credit card they will cancel the card unless you reaffirm the debt. Even if you have a zero balance the credit card company might cancel the card.

You can apply for a "Secured Credit Card" to improve your credit rating.

WHEN WILL I BE DISCHARGED FROM BANKRUPTCY?

3 - 5 months after bankruptcy is filed. When you are discharged from bankruptcy all of your debts (with some major exceptions) will be wiped out and you will have a new financial start!

WHAT IS THE AVERAGE FAMILY INCOME IN TEXAS?

Family Size	Average Income
2	$48,332
3	$58,130
4	$68,579

IF I USE A CREDIT COUNSELLOR WON'T I GET A BETTER CREDIT RATING THAN IF I GO BANKRUPT?

No.

WILL I EVER GET CREDIT AGAIN?

Yes!

A "Secured Credit Card" can help you improve your credit rating even faster.