Understanding Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a personal bankruptcy that allows you to discharge unsecured debts and reaffirm certain secured debts. The difference between unsecured and secured debt is as follows:
- Unsecured Debt: Debt resulting from credit cards, hospital bills, lawsuit judgments, or loans.
- Secured Debt: Debt resulting from a home mortgage, vehicle loan or other assets
With Chapter 7, you may not have to sell your assets in order to pay your creditors. Texas law has liberal exemption policies that often allows claimants to keep their property and reach a suitable arrangement for paying or discharging debt.
Do I Qualify for Chapter 7 Bankruptcy?
Most people who ask this question are experiencing financial hardship, such as:
- Owing significant medical bills
- Being overextended or “maxed out” on credit cards
- Facing abusive or harassing collection notices or calls
- Lacking enough income to cover monthly expenses
- Have a low credit score
- Have tax debt
- Have repossessed vehicles or foreclosed property