Chapter 13 Bankruptcy Attorney Serving Houston, Texas
If you're struggling with overwhelming debt in Texas, bankruptcy might feel like the end of the world. However, Chapter 13 bankruptcy offers a structured way to regain control of your finances and begin working toward financial stability.
At Webb & Associates, our goal is to help you find comfort and relief when it comes to your finances. Our experienced attorney is here to help you make informed decisions and feel confident about your future.
Located in Houston, Texas, our attorney serves clients throughout the surrounding area, including Harris County, Sugar Land, Katy, Galveston County, Cypruss, Fort Bend County, Waller County, and Brazoria County. Reach out to schedule a consultation today.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, also known as "reorganization bankruptcy," allows you to retain your property while you work to repay all or part of your debts over a three-to-five-year period. Unlike Chapter 7, which involves liquidation, Chapter 13 allows you to keep your assets while reorganizing your debts into manageable payments.
This reorganization can be a lifeline for individuals with a steady income who wish to eliminate unsecured debt and catch up on mortgage payments or other secured debts without losing their home or car.
The primary advantage of Chapter 13 bankruptcy is the ability to stop foreclosure and repossession actions. By restructuring your debts into manageable monthly payments, you can protect your most important assets while working towards financial stability.
Additionally, Chapter 13 can provide relief from unsecured debts such as credit card debt and medical bills, although these will often be paid back at a reduced amount through your repayment plan.
To qualify for Chapter 13, you must have a steady income and meet specific debt limits. Per the current rules, your secured debts cannot exceed $1,257,850, and your unsecured debts should not surpass $419,275. These amounts are subject to change, so it is vital to verify the latest figures when considering your options.
Is Chapter 13 Right for You?
Determining if Chapter 13 bankruptcy is the right choice requires a comprehensive evaluation of your financial situation. This option is typically suitable for individuals who meet the following criteria:
Those who have a steady income and can commit to a repayment plan
Those who are behind on mortgage or car payments but want to keep these assets
Those who have a substantial amount of unsecured or secured debt that they are struggling to manage
Those who want to stop foreclosure or repossession actions
Those who have non-exempt property they wish to protect from liquidation
Those who are ineligible for Chapter 7 bankruptcy due to income restrictions or prior bankruptcy filings
Ready to File for Chapter 13 Bankruptcy?
CONTACT USThe Chapter 13 Process
The Chapter 13 process provides a structured path to financial recovery and independence. If you decide to file for Chapter 13 bankruptcy, you will need to complete the following steps before your unsecured debt can be eliminated.
Credit counseling: Before filing, you must complete a credit counseling course from an approved provider. This course helps you understand your financial options and whether filing for bankruptcy is the right choice.
Filing the petition: Once you complete credit counseling, you must prepare and file your bankruptcy petition with the court. The petition contains detailed information about your finances, assets, debts, and recent financial transactions.
Automatic stay: Upon filing, an automatic stay goes into effect, providing immediate relief from creditor actions. This stay halts foreclosure, repossession, wage garnishments, and other collection activities.
Repayment plan: Within 14 days of filing your petition, you must submit a proposed repayment plan to the court. This plan outlines how you intend to repay your debts over three to five years. Your plan must account for your regular living expenses and demonstrate your ability to make the proposed payments.
Meeting of creditors: Approximately 20-50 days after filing, you will need to attend a meeting of creditors, also known as a 341 meeting. Here, you will answer questions from the bankruptcy trustee and any creditors who choose to attend. This meeting allows for a review of your proposed repayment plan.
Confirmation hearing: Approximately 45 days after the meeting of creditors, a confirmation hearing will be held. During this hearing, the judge will assess and confirm your repayment plan if it meets all the necessary requirements. Creditors can object to the plan, but the court has the final say in its approval.
Making payments: Once your repayment plan is confirmed, you will begin making monthly payments to your assigned bankruptcy trustee, who will distribute funds to your creditors according to the plan. It is crucial to make these payments on time to avoid a dismissal of your case.
Financial management course: After your repayment plan has been approved, you must complete a financial management course from an approved provider. This course is designed to help you learn better financial habits moving forward.
Discharge of debts: If you have successfully made all the required payments over the three-to-five-year period, your remaining eligible debts will be discharged. This means you are no longer legally obligated to pay these debts.
At the end of your repayment plan, your bankruptcy trustee will submit a final report to the court detailing how the funds were distributed to satisfy your creditors. Once the discharge is granted and the trustee's report is approved, your bankruptcy case will be closed, marking the end of the process and affirming a fresh financial start.
Bankruptcy Laws in Texas
Texas has various laws and exemptions that can significantly impact your bankruptcy case. For example, Texas offers favorable exemptions that allow residents to protect certain assets from creditors.
The Texas Homestead Exemption is particularly notable, allowing you to shield an unlimited amount of equity in your home, provided it sits on a plot of land not exceeding ten acres in an urban area or 100 acres in a rural one (200 acres for families). Some other notable Texas exemptions include:
Personal property: Up to $100,000 for a family or $50,000 for a single adult
Motor vehicle: One vehicle per licensed household member
Retirement accounts: Most tax-exempt retirement accounts are fully protected
Tools of the trade: Up to $30,000 worth of tools and other items used for work
Life After Chapter 13 Bankruptcy
Filing for Chapter 13 bankruptcy is a considerable step toward financial freedom. However, it's important to understand what comes after your debts are discharged.
Filing for bankruptcy may initially impact your credit score, but you can work to rebuild it both during and after your repayment plan. Some of the best ways you can rebuild your credit are to obtain a secured credit card, pay your bills on time, and regularly monitor your credit report to improve your credit over time.
Additionally, it's important to develop strong financial habits after filing for bankruptcy, such as budgeting, saving, and making informed financial decisions.
Knowing that your debts are behind you and that you have a fresh start to build a brighter financial future can provide relief, but you must take the above steps to prevent being in the same predicament in the future.
Chapter 13 Bankruptcy Lawyer Serving Houston, Texas
Our Chapter 13 bankruptcy lawyer at Webb & Associates has over 25 years of experience and strives to help get clients comfort and relief in trying times. If you're considering bankruptcy and feeling overwhelmed by the process or having trouble understanding how it might affect your life, contact Webb & Associates.
We offer compassionate and knowledgeable counsel and support to help you reach your financial goals. Call today for a free consultation and take the first step toward recovering your financial security.