These are hard times for most of us. unemployment may lead to the inability to pay all bills in full and on time. Bills may pile up. Medical expenses are an unpleasant part of life but can be staggeringly high. While we all want to live up to our obligations and promises, a time may come when we have no choice but to make a fresh start. This point may have to be the hard choice of bankruptcy. If you are in Texas, a Plano Texas bankruptcy attorney can be your friend through this difficult process. a skillful attorney can educate you on the types of bankruptcy, suggest the type that is best for you, and walk you through the process. If you need a Plano bankruptcy lawyer, don’t just throw a dart at the phone book. Do some research to find the best one for your needs. All forward-thinking bankruptcy lawyers have a web site that tells you what they do and how they do it. Be discerning in your choice. Make sure the web site is clear about the differences between the three types of bankruptcies. These are Chapter 7, Chapter 11, and Chapter 13.

With a Chapter 7 bankruptcy, you can quickly rework your finances through the discharge of most of your unsecured debts. The most commonly discharged debts through Chapter 7 are credit cards and medical bills. There are a some categories of debts that are not erased by Chapter 7. These include student loans, child support, alimony, and most taxes. If your mortgage payments and car payments are current, you may be able to keep your residence, your car, and your retirement money and life insurance cash value during this process.

Chapter 11 is a rare type of bankruptcy for individuals. It is normally reserved for businesses, partnerships, and other business entities. Unlike Chapter 7 in which the assets of the corporation are liquidated to pay the creditors, when a business files for Chapter 11 bankruptcy, it can continue to conduct business while it reorganizes its finances. While the bankruptcy is being processed, the owner retains possession of the business and can continue to run it, but this debtor is held to standards of a fiduciary. The debtor may, as needed, reject or cancel contracts. Also, during this time, all litigation is put on hold, and no further lawsuits can be filed against the business.

Chapter 13 is a third alternative for the individual. It may prove attractive to the person who wants to honor his or her debt obligations as well as can be done. An individual opting for Chapter 13 suggests a three-to-five year plan to pay off the creditors. Following this written agreement, the debtor agrees to begin repayment within thirty to forty-five days. This period is a safe period during which the creditors stop all collection activities, giving the debtor a chance to stop and catch his breath. During the bankruptcy process the creditors must carry out all collection activity through the bankruptcy court.

Bankruptcy should not be undertaken on a whim because the stigma of a bankruptcy stays with the person or the business for up to ten years.