Fort Worth Bankruptcy Attorney

Helping People Embark on a New Financial Path

The prices of many consumer products outpace wage gains, student loans hang over the heads of about 70% of graduates, and the cost of unexpected medical treatments can make meeting monthly debt obligations impossible for many. Using credit cards to pay bills is a short-term fix that makes debt worse in the long run.

If you struggle to pay your debt obligations, if creditors are threatening legal action, then you need guidance from our Fort Worth bankruptcy attorneys at the Law Offices of Mark M. Childress.

Bankruptcy Chapters

Bankruptcy law is codified in Title 11 of the United States Code. This section is called the U.S. Bankruptcy Code. The amount and type of debt and what assets need to be protected are factors in determining which bankruptcy chapter is appropriate in the situation.

Individuals and businesses have options in dealing with debt through six types of bankruptcy.

Bankruptcy Chapter 7

Across the U.S., more individuals file under Chapter 7 than any other chapter. According to the American Bankruptcy Institute, about 60% of consumer (personal) bankruptcies file under what is often called liquidation bankruptcy (closer to 55% in Texas).

Nonexempt assets can be sold by the bankruptcy trustee. The proceeds from the sale are used to pay your creditors. Individuals and businesses can file under Chapter 7 if their income is below a certain level.

Basic elements in a Fort Worth Chapter 7 bankruptcy include the following:

• Individuals can keep exempt property.
• Your current wages, retirement accounts, or government benefits can be used by the trustee to settle your debts.
• Once allowable assets are sold and the proceeds used, any remaining eligible debt is discharged (which means erased).
• Past-due alimony, child support, and taxes cannot be discharged.
• Most student loans are also not discharged.

A business filing under Chapter 7 cannot claim any exempt property. The “everything must go” sales include inventory, equipment, furnishings, and fixtures owned by the business. Chapter 7 closes the business permanently.

Bankruptcy Chapter 13

Anyone making too much income to qualify for Chapter 7 can restructure their debt through Chapter 13. This bankruptcy chapter is also useful for those who want to protect unexempt assets from being sold.

Basic elements in Chapter 13 bankruptcy in Fort Worth include the following:

• Instead of liquidating assets to pay the debt, the debt is restructured.
• A monthly repayment plan is developed to pay back part or all the debt.
• The repayment plan usually lasts for three or five years.
• Filers in Chapter 13 keep all their property.
• After the payment plan has been successfully completed, any remaining eligible debt is discharged.

Chapter 13 doesn’t offer a grace period. Missed or late payments carry consequences.

Chapter 11

Individuals can use Chapter 11, but this chapter is generally more applicable to businesses. Chapter 7 requires a business to sell all its assets and close its doors. Chapter 11 bankruptcy allows a business to stay open while repaying creditors. Chapter 11 is similar to a more complicated Chapter 13. Assets are not sold. Instead, the business and debts are reorganized.

Basic elements in Chapter 11 bankruptcy include the following:

• There is no minimum income or maximum debt requirements.
• The business accounts for its assets and liabilities
• A proposed reorganization plan is presented to creditors for approval.
• The plan can then be confirmed by the court.

Chapter 11 is complex and can be quite convoluted for a small business. In 2020, Subchapter V was added to the Chapter 11 bankruptcy code. Small businesses can use this less complex section of Chapter 11 to continue serving customers and clients while reorganizing their business

Chapter 12

Fort Worth has a rich history in agriculture. There are more than 900,000 acres of agricultural land in the Fort Worth area. More than 800,000 are in crops while 80,000 are in pasture. Farming is still a means for many to make their living. This bankruptcy is specifically for “family farmers” and “family fishermen” who are under financial distress despite having a regular income. Chapter 12 allows these farmers and fisherman to restructure their debts into a payment plan.

Chapter 15

Our economy has become increasingly global in the last 50 years. Addressing the need to create a mean Chapter 15, added to the U.S. Bankruptcy Code in 2005, reflects the nature of a global economy. Some bankruptcy cases involve other countries. A foreign debtor with assets in more than one country would use Chapter 15.

Chapter 9

Municipalities (cities, towns, counties, school districts) can file for bankruptcy through Chapter 9 bankruptcy. Towns and cities declaring bankruptcy are uncommon, but it does happen. From Stockton, CA to Prichard, AL, and up to Central Falls, RI, towns and other jurisdictions have filed for bankruptcy.

Legal Counsel for Fort Worth Bankruptcy Options

Bankruptcy is not a personal failing. Bankruptcy is an opportunity to reclaim your financial footing. While it might not be right for everyone, the various chapters available might hold the answer to relieving the immense pressure you feel. Debt does more than take a financial toll. The mental and emotional damage is just as devastating.

You owe it to yourself to learn whether bankruptcy is the release valve you need. Our attorneys at the Law Offices of March M. Childress can answer your questions, guiding you through the pros and cons in your unique circumstances. 

Contact us today to schedule a consultation. Call (817) 497-8148 to get started.