Legal Question in Bankruptcy in Texas

Losing home or cars in bankruptcy

A series of mishaps has left my husband and I with about 14,700 in unmanageable debt. We can handle the mortgage, student loans, and car payment. We unfortunately had to use credit cards to pay for some emergencies that came up. My question has two parts. Can we choose what debts we want to get rid of with bankruptcy? and will we lose our house because of bankruptcy? We have tried debt consolidation loans and it seemed to make matters worse because of the interest rates. We just can't seem to get ahead and put money aside for emergencies. We don't want to file bankruptcy but are at a loss as to how to manage our debts. Any advise or suggestions would be very helpful, thank you.

Sincerely,

Concerned consumer from Texas


Asked on 5/17/03, 6:28 pm

3 Answers from Attorneys
Cheryl Rivera Smith The Smith Law Firm

Re: Losing home or cars in bankruptcy

A good bankrupcy attorney can help you restructure all of your debt so that it you should be able to meet your obligations, keep your house and your car. Find an attorney in your area who offers a free initial consultation and decide if bankruptcy is for you.

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Answered on 5/17/03, 7:19 pm
Lawrence Maun Lawrence J. Maun, P.C.

Re: Losing home or cars in bankruptcy

There are organizations that will negotiate payouts with your credit card companies at reduced interest rates. The non profit ones are the best to deal with. Credit Counselors of America is one. 877-357-6309. I recommned that you explore this route first. What the other reposdents said about bankruptcy pretty well covers the area. Larry Maun 713.266.2560

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Answered on 5/19/03, 10:32 am
Joseph Mohr Mohr & Associates, P.C.

Re: Losing home or cars in bankruptcy

First of all, I should tell you that there are two types of bankruptcy which might be useful to you. One is a chapter 7 bankruptcy which is what most people think of when they are considering filing. This is also called liquidation, fresh start and straight bankruptcy depending upon who you are talking to. In your situation it might be the best option. There is also another chapter called Chapter 13. This is a repayment plan over serveral years.

If you are current on the house and the car you should be able to keep your home and car while filing a Chapter seven.

You do not get to pick and choose what debts are included. All of your assets and all of your debts will need to be listed in a Chapter Seven. Just because it is listed does not mean that you are going to discharge it or give up the asset.

Each state has a list of exemptions which protect property from being taken by a creditor. They will also keep your Chapter seven trustee from taking property which is exempt (and selling for the benefit of creditors). The Federal government also has a list of exemptions. Your lawyer will use the exemption list which is more advantageous to you. In Texas, that is usually the Texas exemption list.

In any event, if an asset is security for a debt, such as your house and mortgage....you have a choice. If you want to walk away from the home and the debt you can. If you want to keep the mortgage you can reaffirm or redeem or just keep paying the note as usual....as long as you are current. This is also true of the car and note. If you are not current it creates a more difficult situation and a Chapter 13 may be appropriate.

I hope that this answer helps.

Joe Mohr

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Answered on 5/18/03, 4:07 pm


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