At its heart, bankruptcy is a federal legal process. It provides an opportunity for debt relief for individuals who find themselves unable to pay their debts.

It depends on the type of bankruptcy you’re planning to file.

For Chapter 7 bankruptcy

• A six-month average of your income must be lower than the median household income of similar size.
• You must not have filed for Chapter 7 bankruptcy for 8 years and Chapter 13 bankruptcy for 6 years.
• You must wait 181 days before filing if you filed for bankruptcy and it was thrown out.
• Typically, you must attend a credit counseling course within 180 days of filing for Chapter 7.

To qualify for Chapter 13 bankruptcy

• You must have sufficient income to make monthly debt repayments
• Your unsecured debts (credit cards, medical bills) must be less than $465,275.
• Your secured debts (mortgage, cars) must be less than $1,395,875.
• You must provide 4 years of state and federal tax returns.
• You must finish an approved credit counseling course, typically within 180 before filing.

Chapter 11 bankruptcy is reserved for business entities and very high-income individuals.

Chapters 7 and 13 bankruptcies are structured for individuals. Chapter 7 bankruptcy will discharge all unsecured debts, like credit cards and medical expenses. Chapter 13 bankruptcy will require that you pay at least part of your debts monthly.

Technically, no, but bankruptcy is a complex legal proceeding, and it may require going to court. A bankruptcy attorney can ensure that your filing is accepted and minimize the assets you’re required to liquidate.

Individuals who elect to file bankruptcy without a lawyer often regret doing so once they see how complicated it can be.

No. This is a pretty common misconception. Individuals filing for bankruptcy are able to file property exemptions. These can include your home, your vehicle, retirement savings, and personal property.

That being said, if you have property that isn’t exempt, you may consider Chapter 13 reorganization and other options in order to avoid their forfeiture.

Yes. Filing for bankruptcy will, at least temporarily, halt foreclosure. If you’re behind on your mortgage payments, you can roll those into a Chapter 13 plan and repay that debt over time.

In general, you can’t discharge secured debt. These are debts associated with property, like a home or vehicle. Unsecured debts can be discharged, including credit card debts, medical bills, student loans, and others.

Some back taxes may also be discharged.

Once you file at a United States bankruptcy court, all creditors will be subject to a stay. They must stop all legal action and debt collection, including foreclosures, repossessions, and other attempts to collect.

No. You must declare all debts. You cannot pay some and discharge others. Bankruptcy is an all-or-nothing legal proceeding.

If you and your spouse jointly hold debts, then you will likely have to file for bankruptcy together. If debts are spread between you and your spouse, you may be able to file bankruptcy separately to protect some assets.

It’s possible to file bankruptcy more than once in your lifetime. However, your eligibility will depend on what type of bankruptcy you filed and the amount of time that has passed since filing.

Our Tyler bankruptcy attorneys will work with you to determine the best course of action given your previously filed bankruptcy.

Bankruptcies are public records, and anyone who wants to request those documents can legally do so. There is no way to “seal” bankruptcy records.

In reality, very few people are likely to do that. It can be difficult and time-consuming.

Bankruptcy is a great opportunity to get a clean slate and work on your credit. It may take some time for your credit to bounce back, but it will do so if you live within your means and keep up with all of your payments.