We practice only consumer and small business bankruptcy. Several options are available depending on the situation.

Chapter 7 

 When the problem is simply more credit card and unsecured debt than can be repaid under the current budget, a Chapter 7 may be the right option. A Chapter 7 is officially called a Liquidation. It is designed to “discharge” ( best thought of as a forgiveness) debt while allowing a debtor to keep the house and car. Debt such as the house and car must be current. Neither the Court nor the creditors can take these exempt assets as long as payments to the lienholders are paid.  It is important to properly prepare a budget and review issues of transfers and fraud prior to filing a Chapter 7. If filed incorrectly, a case might be dismissed,  have the discharge blocked, or in some cases criminal charges investigated.

Chapter 13 

In other cases, a reorganization is in order. A bankruptcy reorganization is used to pay debts that cannot be discharged in a chapter 7, such as many IRS taxes. Also, it is used to give debtors time and ability to catch up arrears on secured debts such as cars and homes. This bankruptcy calls for monthly payments to a court-appointed Trustee which are then distributed to creditors. The Plan of repayment can extend payouts, lower interest rates, and even lower the total amount to be paid. A Chapter 13 Plan may last from 36 to 60 months. Unsecured debt may be paid as little as 1% or as much as 100%.

Many small businesses need help with bank loans, equipment loans, taxes, and vendor. Oftentimes, a Chapter 13 reorganization can give the business enough breathing room to survive. Business Chapter 13 cases can be complicated. They need the attention of an experienced attorney.

Chapter 12

Family Farmers and Family Fishermen (which encompasses shrimp fishing) may file for reorganization under Chapter 12. Mr. Smith has filed more Chapter 12 cases than any other attorney in the Southern District of Texas.

Chapter 11

This is a Reorganization for both individuals and businesses that cannot fit into the limits or requirements of Chapter 12 and 13. Chapter 11 is designed for larger cases and can be more time-consuming and expensive than the other reorganizations.

Bankruptcy Law can be complex. Make sure you talk with someone with the necessary education and practical experience to guide you through it.