Important Bankruptcy FAQ’s Answered


Bankruptcy is often given a pretty bad reputation. Many people want to avoid it at all costs because of the negative stigma that is associated with filing for bankruptcy.

Others simply do not understand exactly what is involved. We would like to educate you on exactly what bankruptcy entails and why it has helped so many individuals.

What is Bankruptcy?

Bankruptcy is a legal proceeding initiated by an individual or company when that person or entity no longer can pay their debts and obligations. This inability to pay is normally because their debts are more than their assets or resources.

It allows the individual or entity to get a financial fresh start and avoid going further into debt. Bankruptcy also can be used to prevent foreclosure, garnishments, levies and other collection attempts by creditors.

Who Are the Players?

Several different parties play a part of the bankruptcy process. The first obvious party would be you, the debtor or person who owes the money and files the case. The second player(s) are the creditors, including banks, mortgage companies, taxing authorities, credit card companies and others to whom you owe the money.

The creditors are divided into different categories: secured, priority and unsecured creditors. The first group are debts for which there is an associated asset or collateral, such as a home or car. The second group involves debts owed for such as taxes and child support. The third group is for debts that do not have an asset tied to them, such as medical bills or credit card liabilities.

Another important player is the trustee who is appointed by the Court to administer your case. The Trustee will review your case to make sure all the players are following established rules. Lastly, the Bankruptcy Judge oversees all cases to resolve disputes between the parties and to protect the integrity of the bankruptcy system.

What To Do

Before you do anything, it is important that you meet with an experienced bankruptcy attorney to discuss your situation and to determine if bankruptcy is the best plan of action for you.

He or she may be able to give you advice on ways to get yourself back on secure financial footing, without filing a bankruptcy case. The attorney also can advise you about which form of bankruptcy filing is best for you.

Chapter 7 bankruptcy will allow you to receive a discharge of your unsecured debt while Chapter 13 involves a repayment plan based on your financial ability. To prepare for a bankruptcy filing, you will be asked to complete a worksheet and an online credit counseling course.

You also will need to provide proof of your income and other information. After the case is filed, the automatic stay (“injunction”) goes into effect and all debt collection proceedings are suspended for the duration of bankruptcy.

All of your creditors will be notified of the proceedings and will be given your attorney’s contact information for further information. Your attorney and the bankruptcy trustee will walk you through the process, and by the end of the proceedings your unsecured debts will either be completely discharged through Chapter 7 or you will begin the reduced payment plan through Chapter 13.


An experienced Texas bankruptcy lawyer can help you determine whether bankruptcy is appropriate for management of your debt. The attorney also will advise you about the best type of case to file and will help address any concerns you have about the bankruptcy process.

Call the Law Office of Marilyn D. Garner now at 817.381.9292 for a free consultation to discuss how bankruptcy may help you to protect your assets and manage your debts.

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