Galveston Bankruptcy Lawyers

Bankruptcy is a legal process that provides individuals and businesses facing overwhelming financial challenges an opportunity to reorganize or discharge their debts under federal law. For those in Texas, this legal process can offer a fresh start, allowing them to regain control of their financial situation. However, navigating the complexities of bankruptcy requires a clear understanding of how it works, the options available, and its potential effects.

For individuals, bankruptcy can provide relief from creditor harassment, wage garnishments, and the threat of foreclosure or repossession. Filing for bankruptcy can help eliminate unsecured debts like credit cards and medical bills or create a manageable repayment plan through Chapter 13. Businesses, on the other hand, may use bankruptcy to reorganize their operations, pay down debts, and continue functioning. The impact on a business depends on its goals and the type of bankruptcy filed, such as Chapter 11 for reorganization or Chapter 7 for liquidation.

Types of Bankruptcy and How They Work

There are several types of bankruptcy, each tailored to meet the specific needs of individuals or businesses. Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. It involves selling non-exempt assets to repay creditors, with the remaining eligible debts discharged. This option is generally suited for individuals or businesses with limited income and significant debt they cannot repay.

Chapter 13 bankruptcy allows individuals with a steady income to reorganize their debts and repay them over three to five years. This process can help debtors keep important assets like their home or car while catching up on missed payments. Chapter 11 bankruptcy is primarily used by businesses to restructure their debts while continuing operations. This type of bankruptcy allows a company to propose a plan to repay creditors over time, preserving its business and workforce.

The Bankruptcy Process in Texas

Filing for bankruptcy involves several steps, beginning with a thorough evaluation of your financial situation. In Texas, this means gathering all relevant financial documents, such as income statements, a list of assets and liabilities, and a complete record of debts. The next step is completing credit counseling from an approved agency, a requirement under federal law.

Once these preliminary steps are complete, the appropriate bankruptcy petition is filed with the court. Filing immediately halts creditor actions, including collection efforts and lawsuits. From there, the court appoints a trustee to oversee the case and manage the distribution of assets or the repayment plan, depending on the bankruptcy chapter chosen. Throughout the process, the individual or business must comply with court orders and attend hearings as necessary.

The Impact of Bankruptcy on Credit and Financial Future

One of the most significant concerns about filing for bankruptcy is its impact on credit. A bankruptcy filing can remain on a credit report for up to ten years, depending on the chapter filed. However, it is important to note that many individuals and businesses emerge from bankruptcy in a stronger financial position than before. With proper planning and responsible financial practices, rebuilding credit is achievable.

For businesses, the ability to restructure and focus on sustainable operations can pave the way for long-term success. For individuals, bankruptcy can provide the breathing room needed to manage finances effectively and move forward without the burden of unmanageable debt.

Our firm offers the following services:

• Filing Motions from Relief of Stay
• Preparing Reaffirmation Agreements
• Filing Objections to Confirmation in Chapter 11, 12, and 13 cases.
• Filing Motions for Adequate Protection
• Filing Proofs of Claim
• Filing Responses to Objections to Creditor’s Proof of Claim
• Filing Motions for Valuation
• Filing Adversary Complaints Contesting Dischargeability
• Initiating Preference Litigation
• Filing Motion to Dismiss

Common Mistakes People Make When Facing Bankruptcy

When facing bankruptcy, it’s easy to become overwhelmed by the process and make decisions that may hurt your case. Bankruptcy is a serious legal matter that requires careful planning and understanding of the law. At Zendeh Del & Associates, PLLC, our Galveston Bankruptcy Lawyers are here to help guide you through each step, ensuring you avoid common pitfalls that could delay or complicate your bankruptcy case. Let’s take a closer look at some of the mistakes people often make when dealing with bankruptcy.

Not Fully Understanding the Process

One of the most common mistakes people make when facing bankruptcy is not fully understanding how the process works. Many people assume that filing for bankruptcy will immediately eliminate all of their debts, but this is not always the case. Different types of bankruptcy, such as Chapter 7 and Chapter 13, offer different forms of relief, and each comes with its own set of rules. Failing to understand these differences can lead to frustration down the road. It’s crucial to consult with a bankruptcy lawyer who can explain the process in detail and help you choose the right path for your situation.

Hiding Assets or Inaccurately Reporting Financial Information

Another serious mistake people make is attempting to hide assets or providing inaccurate information on bankruptcy forms. This can lead to severe consequences, including the dismissal of your case, the loss of property, or even criminal charges in some instances. Honesty is always the best policy when it comes to bankruptcy. It’s important to disclose all your assets, income, and debts during the process. Attempting to hide or misrepresent your financial situation will only hurt you in the long run. Our Galveston Bankruptcy Lawyers can assist you in making sure that your paperwork is completed accurately and honestly.

Waiting Too Long to File for Bankruptcy

Waiting too long to file for bankruptcy is another mistake that many people make. Some people try to hold off on filing, hoping that their financial situation will improve on its own. However, this often leads to additional debt, more creditor harassment, and a more complicated bankruptcy case. The sooner you file for bankruptcy, the sooner you can begin to work toward a fresh financial start. If you’re feeling overwhelmed by debt, don’t wait to seek legal help. The sooner you take action, the better chance you have of getting the relief you need.

Not Seeking Professional Help Early Enough

Many individuals who are struggling with debt hesitate to seek professional legal help until it’s too late. It’s important to speak with a bankruptcy lawyer early in the process, so you understand all of your options. By the time some people seek help, they may have already taken steps that hurt their case, such as selling property or making large purchases. Bankruptcy laws are complex, and without the right guidance, it’s easy to make decisions that complicate the process. A skilled bankruptcy lawyer will help you navigate the legal system and give you the best chance at a successful outcome.

Making Large Purchases or Taking on More Debt Before Filing

A mistake that people often make before filing for bankruptcy is taking on additional debt or making large purchases. When you file for bankruptcy, the court will review your financial history, and any large purchases made shortly before filing could be seen as fraudulent. Taking on more debt can also make your case more complicated. If you’re considering bankruptcy, it’s important to avoid taking on new credit or making purchases you cannot afford. Consult with one of our Galveston Bankruptcy Lawyers before making any financial decisions that could affect your case.

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