Bankruptcy FAQs2018-10-10T17:24:44-05:00

Bankruptcy FAQs

Dallas Fort Worth Bankruptcy Attorneys

Bankruptcy can be an intimidating option for many people. Although filing for bankruptcy is often attached to a negative social stigma, it can be a great option for those in need of financial protection.., Bankruptcy remains a reasonable legal option when debt begins to accumulate at overwhelming rates. Due to the many questions that may arise when contemplating filing bankruptcy, we have answered some of the most common questions to help you understand the benefits of bankruptcy in a time of need.

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Dallas Bankruptcy FAQ

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I’m considering going with a debt settlement company instead of filing bankruptcy. Why should I go with bankruptcy?

Posted by opseo on May 2, 2019

Debt settlement programs rarely work as advertised and forgiven credit card debt is treated as an income by the IRS so, you might end up having to pay taxes on it.

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Can bankruptcy eliminate the interest on my tax debt?

Posted by opseo on May 2, 2019

Bankruptcy can help reduce or eliminate penalties and interests associated with outstanding tax debt.  

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Is discharged debt taxable?

Posted by opseo on May 2, 2019

With bankruptcy, discharged debts have no income tax consequences and it is excluded from gross income. With other debt relief programs you risk the possibility of receiving a tax bill after your debt has been canceled, but that’s not the case with bankruptcy.

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I know I’m going to owe the IRS if I file my taxes so I am considering not filing this year because I can’t make the payments. Is it okay if I don’t file?

Posted by opseo on May 2, 2019

Without doubt you should still file your taxes. Even though you aren’t able to make payments, filing your taxes and not paying immediately will put you in a much better position than if you don’t file at all.

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How can filing for bankruptcy help stop my tax garnishment?

Posted by opseo on May 2, 2019

Taxing authorities must immediately stop garnishing your wages as soon as they receive the notification of bankruptcy, no matter the type of tax that you owe.

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What is Chapter 7 Bankruptcy?

In some cases with Chapter 7 bankruptcy, people suffering severe debt will sell a number of assets in order to pay certain creditors as much as possible. In other cases, these types of bankruptcies are labeled as “no asset” bankruptcies. This means it is not required for assets to be sold during the process. Chapter 7 bankruptcy is useful to become free of some debt and in order to pay off portion of principal balances of unsecured debts. Unsecured debts might be matters such as credit cards and medical expenses.

Oftentimes, people who have experienced a long interval of unemployment will file for Chapter 7 bankruptcy. These unemployment cases might be the result of medical issues that prevented persons from working. Furthermore, people with fewer assets might find Chapter 7 bankruptcy more beneficial.

Chapter 13 bankruptcy reorganizes a person’s debt into a manageable payment plan. Most often, these payment plans are scheduled into three- or five-year plans. On average, Chapter 13 bankruptcy is easier to qualify for. In addition, this type of bankruptcy allows for a person to keep assets such as homes and cars.

Chapter 13 bankruptcy is also referred to as a “wage earners” bankruptcy since it is designed for persons who have a regular source of income. Therefore, a person who receives a normal income might file for this type of bankruptcy.

In most cases of Chapter 13 bankruptcy, a person does not run the risk of losing his/her home since this type of bankruptcy allows the debtor to remain in possession of their hard-earned assets.

A bankruptcy discharge relieves a debtor of certain types of debt by releasing personal liability. In this case, a debtor is not legally liable to pay any debts that have been discharged. discharges are permanent and they disallow creditors from taking any action on discharged debts.

It is unpermitted for an employer to fire or discriminate against an employee because the employee filed for bankruptcy. In addition, an employee cannot be demoted, receive a reduced salary, or be removed from responsibilities as a result. If a person is discriminated against, or fired, because the employee chose to file for bankruptcy, the employer may suffer consequences of such action(s).

In general, bankruptcy might slightly affect a person’s credit score. However, most of the time, it will not cause extreme damage to a debtor’s credit score. Of course, this depends on a number of factors, one of the most important deals with how high or low a person’s credit score was prior to filing. Most often, a person filing for bankruptcy already has a low credit score, making bankruptcy less of an impact concerning the credit score. On the other hand, a person who had a good credit score prior to filing bankruptcy might notice a greater impact on their credit score. In addition, a debtor’s credit score may depend on the debtors debt-to-asset ratio.

Yes. Filing for bankruptcy and receiving a “discharge” of your debt removes the majority of your debt forever. The discharge is a Federal Court Order and if the creditor reports a discharged debt on your credit report or attempts to collect the debt, you may be able to file a lawsuit against them. Some debt, like taxes, child support, student loans, court restitution, and mortgage can be included in bankruptcy but may not be fully discharged upon completion of the plan.

No. This not true. Bankruptcy allows you to get rid of certain debts without ever having to pay for them. This means only creditors and people you tell will ever know you filed for bankruptcy.

No, you will not lose everything you have. In fact, most people who file for bankruptcy will not lose anything. In most states, there are exemptions that safeguard houses, cars, household furnishings, wages, retirement plans, and personal injury claims.

Yes. There are no restrictions or laws that state you are not allowed to purchase homes, household goods, furnishings, or cars one you receive your discharge in bankruptcy.

Research shows you will be more likely to get credit after you have filed bankruptcy than if you do not file at all. This is because bankruptcy removes the debts you cannot afford to pay. This allows you to be in a position to take on more credit while paying off any leftover debts on time. In addition, having less debt to pay makes you look more appealing to lenders.

This is a common misconception. In most cases, bankruptcy is reported on your credit report for 10 years. However, because something is reported on your credit report does not mean it will have a negative effect on your standing.

Many people fear the thought of bankruptcy because they think it is difficult to accomplish. However, an experienced bankruptcy attorney can make the process as seamless and comfortable as possible. They can explain what will happen, what you can expect, and how they can help you and your family achieve a happier future as soon as possible.

No, it is unlawful to do so. According to laws, you must list all debts and properties. A skilled Dallas bankruptcy lawyer can explain how this can actually help you rebuild a better life.

Due to the complexities of such a matter, it is important that individuals considering bankruptcy seek experienced legal advice as soon as possible. The Dallas bankruptcy lawyers at Allmand Law Firm, PLLC understand the stresses that come from bankruptcy worries and concerns. For this reason, our bankruptcy attorneys are available to help you and your family achieve financial freedom. Here at our firm, we do not believe that bankruptcy defines a person.

We work hard to show you the various options that are available for your specific needs and will stand by our clients throughout the entire process.

To discuss your case,contact our firm today! You are not alone. Allmand Law Firm, PLLC is here.

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