If you own a small business, a bankruptcy can become more complicated. Filing Chapter 7 bankruptcy works just like personal filing–an Automatic Stay allows your business to dissolve without facing the collection efforts of those that you owe money or services. However, it’s possible to keep your business and still receive bankruptcy protection. Chapter 11 bankruptcy is designed for businesses that want to continue repaying their debts with reduced payments. Your business could qualify for up to six years to repay existing debts. The process is complex, and your debts must be under $2 million dollars to qualify. [3] There are many other details such as making a list of your top 20 creditors, meeting with debtors, scheduling a conference with them, appointing a trustee and making all business records available for financial examination.

You can file Chapter 13 bankruptcy if you are the sole proprietor of your business. You’ll have to file this type of business bankruptcy as if you were just filing a personal bankruptcy. All other Chapter 13 regulations apply. Contact us online today, or call us at (512) 643-6763 for a business bankruptcy evaluation.

[3] Justice.gov: OPERATING GUIDELINES AND REPORTING REQUIREMENTS FOR DEBTORS IN POSSESSION AND CHAPTER 11 TRUSTEES

www.justice.gov/sites/default/files/ust-regions/legacy/2013/01/10/ch11_guidelines_reporting_req.pdf

One of the first things our lawyers do when you contact our firm is determine whether you qualify for Chapter 7 bankruptcy, which can eliminate all your debt. When it’s impossible to pay your bills–you’ve lost your job, your business has failed, you’ve been sued or have a mountain of debt–you could qualify for Chapter 7 bankruptcy.

There are several different options for declaring bankruptcy depending on whether you own a business, whether your debts are secured or unsecured, whether child support and alimony are involved and other factors. That’s why it’s so important to contact an attorney first to see what choices you have. Each case is different based on your own circumstances, but the general rules of bankruptcy include the following points:

Secured and Unsecured Debt

• Secured and Unsecured Debt Secured debt includes loans guaranteed by collateral such as mortgages, car loans and other types of loans secured by collateral. These debts must usually be discharged through Chapter 13 bankruptcy where you re-organize your finances and make partial payments to satisfy some of your debts for three to five years.

Exemptions

• Exemptions Homestead exemptions are money and property that you can keep even if you’re required to repay part of your debts or sell property to repay your creditors.

Dealing with Other Issues

• Dealing with Other Issues Bankruptcy often occurs when other family problems arise such as trial separations, divorce, failure or sale of the family business and the death of a family member. Important issues that affect bankruptcy include child support, spousal support, immigration status and divisions of assets. Our family law practice also handles these related family law matters, so contact us today, or call us at (512) 643-6763 for further information about how these issues can affect both spouses when thinking about bankruptcy.

Mandatory Credit Counseling

• Mandatory Credit Counseling Before you can file for bankruptcy with the court, you must take a Texas-approved credit counseling course so that you better understand your finances, bankruptcy options and the responsible use of credit. [1]

Automatic Stays

• Automatic Stays Once you contact our office and determine that you want to file for bankruptcy, our team will contact all your creditors, which immediately stops all collection efforts until everything is resolved in court. This Automatic Stay stops wage garnishments, repossession proceedings, court cases and collection calls.

As you can see from the above list, there are many complex issues to consider when you file for bankruptcy. That’s why it’s so important that you contact our office today or call us at (512) 643-6763. The Jackson Law Firm of Williamson County, Texas, and surrounding areas including Cedar Park and Round Rock offers guidance, support and expert knowledge of bankruptcy and family law.

If the “means” test determines that you make enough to pay off part of your debts, you’ll have to file Chapter 13. Your debtors will study your finances and propose a three-to-five year repayment plan, apportioning certain percentages to each debtor. If you stick to this repayment plan, all your remaining debts will be canceled. You can also choose to file Chapter 13 bankruptcy instead of Chapter 7 if you want to prevent foreclosure and keep your home and family cars or keep other property or treasured family mementos that exceed the value of the Texas homestead exemption limit. In a Chapter 13 bankruptcy, you can make up missed mortgage payments and reinstate the original terms of the mortgage. [2] If you want to keep certain types of property, contact us online today, or call us at (512) 643-6763. We’ll see what can be done to safeguard your livelihood and lifestyle. Chapter 13 bankruptcies can provide the following benefits:

• You can keep some or all of your property including exempt and nonexempt items.
• You can file Chapter 13 bankruptcy at any time–repeatedly–if your circumstances change.
• Your home is protected from foreclosure proceedings as long as you follow the terms for repaying your mortgage.
• Debtors can be separated by class where different classes receive different repayment percentages.
• You get more time to repay mandatory debts such as child and spousal support and back taxes.
• You get the same protection against debt collectors as Chapter 7 filers including freedom from unauthorized contact, wage garnishment and lawsuits.

A Chapter 13 bankruptcy lawyer in Cedar Park or Round Rock who serves the city and surrounding areas can help you make sense of the bankruptcy laws and get the best deal possible based on your income, debts and other factors.

[2] Texasbankruptcylaw.com: Texas Chapter 13 Bankruptcy Information

www.texasbankruptcylaw.com/chapter13.html

There is a “means” test that compares your income with your debts and living expenses to determine if you can pay part of your debts. If you can’t afford to cover living expenses and pay your debts, you qualify for Chapter 7 protection. Chapter 7 bankruptcies enjoy the following financial benefits:

• Your debts are mostly eliminated except for student loans, certain medical bills, alimony, child support and secured items for which you sign a “Reaffirmation Agreement,” which means that you agree to make the payments to keep certain types of property.
• The process is usually over within three to six months.
• As soon as you file,you get immediate protection from your creditors; they’re not allowed to continue their collection efforts by phone, mail, email, legal action or personal collection efforts.
• You can keep all your wages and any new property that you acquire after filing Chapter 7 bankruptcy.
• You can file bankruptcy no matter how small your debt is because there’s no minimum debt required.

Contact us today online or by calling (512) 643-6763 to see if you qualify for Chapter 7 bankruptcy, which eliminates almost all of your existing debts. A Chapter 7 bankruptcy lawyer in Round Rock who serves the city and surrounding areas in Williamson County can help you get the fastest possible bankruptcy protection and stop annoying collection efforts.

Although bankruptcy gives you a fresh financial start, there are times when alternatives to bankruptcy might be a better choice. If you want to keep your home or business, it might be more beneficial to work with your debtors, take out a consolidation loan or second mortgage, sell your business’s accounts receivable invoices or get a loan by using other forms of collateral. Regardless of your strategy, it’s always best to contact a bankruptcy lawyer in Williamson County to understand all the risks and alternatives to bankruptcy.

In certain cases, you can bankrupt U.S. federal taxes. Most people think that taxes can’t be eliminated by filing for bankruptcy, but that’s not always true. Many taxes can be discharged, but the rules are complex and depend on your financial situation and whether you filed your taxes on time or within four years of declaring bankruptcy. [4]

The Jackson Law Firm can help you determine whether any back taxes you owe are dischargeable through bankruptcy protection. Making sense of business and personal bankruptcy, back taxes and dischargeable and non-dischargeable debts is complex, but our team of Williamson County bankruptcy lawyers can simplify filing for bankruptcy and help you choose the right kind of bankruptcy protection. 

[4] Irs.gov: Declaring Bankruptcy | Internal Revenue Service

www.irs.gov/businesses/small-businesses-self-employed/declaring-bankruptcy

One of the benefits of Chapter 7 is that you can eliminate your debt. People qualify for Chapter 7 bankruptcy usually when it’s impossible for them to repay their debts based on their incomes. If you qualify for Chapter 7 protection, you can bankrupt all your outstanding debts and get a fresh start.

In Texas–and other states–the state government sets limits on what your creditors can take. This is done by setting exemptions for certain kinds of property that creditors aren’t allowed to attach. In Texas, a creditor cannot garnish your current wages for a consumer debt except for court-ordered child and spousal support and back support payments. Other property that your creditors can’t take includes:

• The house and land where you live
• Family cemetery plots
• The following personal property valued up to $30,000 in total for a single person or $60,000 for a family:Jewelry up to $15,000 for a single person or $30,000 for a family
• Home furnishings
• Athletic and sporting equipment such as bicycles, SCUBA gear, etc.Farm or ranch equipment and tools
• One vehicle for each adult family member with a driver’s license
• Pets
• Clothing
• Tools, equipment and incidentals used in your business
• Food and household supplies
• Social Security benefits
• Two firearms
• Jewelry up to $15,000 for a single person or $30,000 for a family
• Home furnishings
• Athletic and sporting equipment such as bicycles, SCUBA gear, etc.
• Farm or ranch equipment and tools
• One vehicle for each adult family member with a driver’s license
• Pets
• Clothing
• Tools, equipment and incidentals used in your business
• Food and household supplies
• Social Security benefits
• Two firearms

Contact us today at (512) 643-6763 if you have any questions about exemptions. If you really want to protect property that’s valued over the limit, choose Chapter 13. However, some people keep their personal belongings by doing nothing. Your creditors might obtain judgments if you do nothing, but many creditors concentrate solely on attaching cash from employment, your bank accounts and highly valued property like boats. Most creditors don’t want to bother with hunting down your belongings and estimating the value of personal property. It’s risky, but you might be allowed to keep your precious mementos–and even valuable personal property–by doing nothing. If your creditors do go after your personal property, you can stop them at that time by declaring bankruptcy.