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Office Location:   21815 Oak Park Trails DriveKaty, Texas 77450
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FAQ

Understanding Bankruptcy

When new clients and families come to us in financial turmoil, many of them simply do not understand bankruptcy and do not know where to begin. When you are considering filing for bankruptcy, you may quickly realize that bankruptcy processes, as well as other debt-related legal actions, are full of complicated procedures, dense paper work, and unfamiliar terminology. In fact, it is common for most people to feel incredibly overwhelmed when first learning about bankruptcy. In an effort to provide you with a solid foundation that can help you better understand your personal financial situation, our experienced attorneys have answered some of the most frequently asked questions about bankruptcy and debt.

What is bankruptcy?
To put it simply, bankruptcy is a legal action that acts as a form of debt relief. It allows those struggling with debt to discharge or reorganize certain debts so that they are more manageable. Depending on your current financial situation, you may file bankruptcy under either Chapter 7, also known as liquidation, or Chapter 13, a reorganization plan. Bankruptcy law was designed to help those struggling with insurmountable debt, not to punish them. In fact, either chapter of bankruptcy can ultimately provide a "financial fresh start" that will allow an individual to get their finances under control and work toward a more economically stable future.

Will bankruptcy wipe out all my debts?
No. The debts and amount of your total debt that will be discharged will depend on your current financial situation and the chapter of bankruptcy under which you file. In any case, certain debts are not dischargeable. These include but are not limited to certain income taxes, student loans, and fines and court costs. The personal circumstances of your case will determine how your debts can be discharged.

Will bankruptcy allow me to keep my house?
Whether or not you will be able to keep your house will depend on a variety of factors related to your unique situation. If you are facing foreclosure proceedings and have simply fallen behind in making payments, there may be options available that can allow you to keep your home. For example, Chapter 13 bankruptcy can help you to restructure your debts into manageable payment plans that will allow you to keep your property. Keeping your home when filing Chapter 7 bankruptcy will depend on whether or not you are current on your payments. As these are serious situations that vary on a case-by-case basis, it is highly advised that you seek legal assistance.

What is an automatic stay?
An automatic stay is a court order that requires all collection activities against you to stop. This means that wage garnishments, calls from debt collection agencies, lawsuits, foreclosures, and other actions will immediately halt while your bankruptcy is pending. This period of time can give you the breathing room you need to catch up on payments and to organize your finances in preparation for the future. An automatic stay will be issued for both Chapter 7 and Chapter 13 bankruptcies.

How will bankruptcy affect my credit?
The effects of bankruptcy on your credit will depend on which chapter you filed under for debt relief. Chapter 7 bankruptcy can stay on your credit report for up to ten years, while Chapter 13 can remain for up to seven years. It is also important to note that a bankruptcy does not automatically eliminate you from obtaining credit in the future. In fact, you will find that your credit history will be viewed differently and as a matter of preference at the discretion of different creditors and lenders.

Contact Us for More Answers

The bankruptcy and debt management processes can be complicated and difficult to understand. Our firm chooses to provide these answers to frequently asked questions as a starting point to help you become better acquainted with what bankruptcy is intended to achieve. As a form of debt relief, the actions and effects of bankruptcy will always vary according to the unique circumstances involved, which is why the Law Office of Corey L. Mills strongly encourages you to discuss your personal case with a knowledgeable attorney from our firm. If you have more questions about bankruptcy, foreclosure, or other debt-related issues, contact our firm today.

Law Office of Corey L. Mills - Katy Bankruptcy Lawyer
Located at 21815 Oak Park Trails Drive Katy, TX 77450. View Map
Phone: (281) 638-8693
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