Filing for bankruptcy can be confusing but may be beneficial to help you create a better financial future. Bankruptcy is a legal process that allows you to discharge many of the unsecured debts you have without having to repay them. If you live in Texas and have been struggling to experience financial freedom, here are some important things to know about bankruptcy.
Types of bankruptcy
There are two categories of bankruptcy that you can file if you’re having financial hardships: Chapter 13 and Chapter 7.
Chapter 13 bankruptcy helps Texas residents deal with debt by putting on a repayment plan managed by a trustee. It is designed for people who have a regular and steady source of income, and you’ll be able to keep your assets as long as you stick to your repayment schedule.
Chapter 7 bankruptcy is also called liquidation bankruptcy. This process allows you to discharge your debt and start fresh through the sale of your non-exempt assets by the trustee, with the proceeds going to creditors.
Filling out the right documents
You’ll have to submit specific documents before you can file for bankruptcy in Texas. It is necessary to complete financial information for you and your spouse if you’re filing for bankruptcy jointly. You must also submit the past three months of earning statements and pay stubs. Be sure the documentation shows all wages earned by everyone who lives in your household. Along with these documents, you must provide a list of all property that is considered exempt in the state of Texas, as well as a list of all your creditors and the amounts you owe. Include the contact information for your creditors as well.