Federal Law provides anyone with the right to file for bankruptcy, and this process is completely handled by the federal court. A personal bankruptcy claim is one way to help you manage your financial situation. Although filing for a personal bankruptcy should be the last resort, there are many reasons why people they file for bankruptcy – injury or illness, job loss, or personal loss. There are two ways that a person can file for a personal bankruptcy: Chapter 7 and Chapter 13 bankruptcy. Both of these options have thing pros and cons, therefore it is important to know which one would be more beneficial to your financial situation.
Chapter 7 is aimed for people who have large amounts of debt but is unable to pay for them due to low income. This often requires you to forgo a lot of your personal properties but would wipe out the general bulk of your debts. On the other hand, Chapter 13 bankruptcy can help you keep your property but would require you to have a legally-binding repayment agreement, usually to be completed between three and five years.
Being under either Chapter 7 or Chapter 13 bankruptcy would protect you from debt collectors, since the court will issue an automatic stay, preventing the creditors from contacting you and requiring you to pay them, foreclose your house, repossess your car, turn off your utilities, and even harass you. Personal bankruptcy allows you to deal with dischargeable debts, but there are exceptions to the types of debts that can be discharged. In the state of Texas, you can use the federal exemption statutes rather than using the Texas exemptions.
A Plano bankruptcy lawyer will tell you that each case is unique in its own ways. With that in mind, the help of someone who has experience with these sorts of things could prove beneficial, especially since state laws can have different rules regarding exempt and non-exempt debts. In order to have a more detailed and specific information about your financial situation and bankruptcy option, you should contact a personal bankruptcy lawyer who knows and understands the bankruptcy laws in your state.