Go

What is Bankruptcy?

Bankruptcy is a legal proceeding in federal court in which a person who is struggling to pay his or her bills can get a fresh financial start.

Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.

Depending on the type of debt and your situation, bankruptcy will eliminate a debt or allow you to repay any delinquency at a low rate of interest over an extended time.

Bankruptcy may allow you to:

1. Eliminate the legal obligation to pay most or all of your debts (this is known as "discharge" of debts).

2. Stop foreclosure on your house, townhome, condominium, or mobile home and allow you an opportunity to catch up on missed payments over a longer period of time.

3. Prevent repossession of a car or other property, and in some instances force the creditor to return property even after it has been repossessed.

4. Stop debt collection calls, letters, and other creditor harassment.

5. Restore or prevent termination of utility service.

6. Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.

Bankruptcy cannot:

1. Eliminate certain rights of "secured" creditors. A creditor is "secured" if it has taken a mortgage (i.e. home loan) or other lien (i.e. car loan) on property as security for a loan. While you can force secured creditors to take payments over time, and while you can also eliminate your obligation to pay any additional money on the debt if you decide to give back the property, you generally can not keep secured property unless you continue to pay the debt.

2. Discharge certain debts that receive special treatment under bankruptcy law such as child support, alimony, most student loans, court restitution orders, most taxes, awards for your injury to others while driving or boating intoxicated, and criminal fines.

3. Discharge debts that arise after you file for bankruptcy.

4. Protect people who also signed on a loan (except when you re-pay under a Chapter 13 bankruptcy plan).

© 2011 Starks & Gonzales, P.C. is a debt relief agency that helps people file for bankruptcy pursuant to 11 U.S.C. sec. 528 under the Bankruptcy Code.  Unless otherwise indicated, attorneys listed in this web site are not certified by the Texas Board of Legal Specialization.