Welcome to the Law Office of Jeremy T. Wood, PLLC Frequently Asked Questions

Bankruptcy is a legal process established by federal law that helps individuals and businesses eliminate or repay their debts under the protection of the bankruptcy court. It provides relief to debtors overwhelmed by financial obligations while ensuring fair treatment of creditors.

The primary purposes of bankruptcy are to:

• Give honest debtors a “fresh start” by relieving most debts
• Allow for the orderly repayment of debts when possible
• Provide immediate protection from creditor collection activities
• Fairly distribute a debtor’s assets among creditors when necessary

Determining if bankruptcy is appropriate for your situation depends on several factors. You might consider bankruptcy if:

• You’re facing overwhelming debt that you cannot reasonably repay
• You’re experiencing harassment from creditors or collection agencies
• You’re at risk of losing your home to foreclosure
• Your wages are being garnished
• You’re using credit cards to pay for basic necessities
• You’re considering withdrawing from retirement accounts to pay debts

However, bankruptcy isn’t always the best solution. It may not be right for you if:

• Most of your debts are non-dischargeable (like recent taxes or student loans)
• You could reasonably pay off your debts within 2-3 years with budgeting
• You have valuable non-exempt property you don’t want to lose
• You recently made large purchases on credit or took cash advances

The best way to determine if bankruptcy is right for you is to schedule a free consultation with our office. We’ll analyze your specific financial situation and help you understand all available options.

For individuals and small business owners, there are three main types of bankruptcy:

Chapter 7: Liquidation Bankruptcy

• Often completed in 3-6 months
• Eliminates most unsecured debts like credit cards and medical bills
• May require surrendering non-exempt assets (though most clients can keep most or all property through exemptions)
• Best for those with limited income and primarily unsecured debts
• Subject to means test qualification based on income

Chapter 13: Repayment Plan

• 3-5 year structured repayment plan
• Allows you to keep all property while repaying some or all debts
• Excellent for stopping foreclosure and catching up on mortgage payments
• Can reduce car loans and other secured debts in some cases
• Available to individuals with regular income

Chapter 11: Business Reorganization

• Primarily for businesses or individuals with substantial debt
• Allows business to continue operating while restructuring debts
• More complex and typically more expensive than other types
• Includes special Subchapter V provisions for small businesses

During your consultation, we’ll help determine which chapter is most appropriate for your specific circumstances.

In most cases, you will not lose your home when filing bankruptcy in Texas. Here’s why:

Chapter 7 Bankruptcy:

• Texas has one of the most generous homestead exemptions in the country, protecting the entire value of your home regardless of price (with some acreage limitations)
• As long as you’re current on your mortgage payments, you can typically keep your home in Chapter 7
• You must continue making mortgage payments during and after bankruptcy to avoid foreclosure

Chapter 13 Bankruptcy:

• Chapter 13 is specifically designed to help save homes from foreclosure
• Allows you to catch up on missed mortgage payments over 3-5 years
• Stops foreclosure proceedings as soon as you file
• May allow you to eliminate second mortgages in some cases

Important considerations about your home in bankruptcy:

• You must stay current on mortgage payments going forward
• If you have significant equity above the exemption limits (rare in Texas), a Chapter 13 filing may be better to protect that equity
• Recent home purchases may have different considerations

We’ll carefully evaluate your specific situation regarding your home during your consultation.

While bankruptcy filings are public records, in practice, most people never find out about your bankruptcy unless you tell them. Here’s what you should know:

Who will definitely know:

• Your creditors (they receive formal notice)
• The bankruptcy court and trustees
• Your co-signers on any loans

Who might find out:

• Employers, if wage garnishment was in effect or if you work in certain financial or security positions
• Landlords conducting credit checks
• Anyone who runs a credit report on you in the next 7-10 years
• Anyone who searches bankruptcy court records (uncommon)

Who probably won’t know:

• Friends and family (unless you tell them)
• Neighbors
• Coworkers
• The general public

Bankruptcy filings aren’t publicized in newspapers or other media. While technically public, someone would need to specifically search court records to find your bankruptcy filing. Most people never experience social stigma because others simply don’t find out.

We take your privacy seriously and will discuss any specific concerns during your confidential consultation.

No, most bankruptcy filers keep all or most of their property. Thanks to Texas’s generous exemption laws, the majority of our clients don’t lose any assets. Here’s what you should know:

In Chapter 7 bankruptcy:

• Texas exemptions protect many assets, including:
  • Your home (unlimited value, with acreage limits)
  • Vehicles (up to $15,000 value per person in household)
  • Household goods, clothing, and personal items
  • Retirement accounts (generally 100% protected)
  • Tools of your trade
  • Certain insurance policies
• Non-exempt property could potentially be sold by the trustee to pay creditors
• You can often “buy back” non-exempt items of particular importance

In Chapter 13 bankruptcy:

• You keep all of your property, even non-exempt assets
• Your repayment plan accounts for the value of any non-exempt assets
• You essentially “pay for” the right to keep non-exempt property through your plan

During your consultation, we’ll conduct a thorough review of your assets and explain which exemptions apply to your situation. We’ll also develop strategies to maximize your property protection before filing if necessary.

Yes, you can absolutely rebuild your credit after bankruptcy. Many of our clients find that their credit scores begin to improve within 12-18 months after filing. Here’s how bankruptcy affects your credit and how to rebuild:

Credit Impact:

• Chapter 7 bankruptcy remains on your credit report for 10 years
• Chapter 13 bankruptcy remains on your credit report for 7 years
• Initial impact on your credit score can be significant if your score was high
• If your credit was already damaged by late payments, collections, etc., the additional impact of bankruptcy may be minimal

Rebuilding Steps:

1. Create a budget and live within your means
2. Start an emergency fund to avoid future credit reliance
3. Get a secured credit card from a reputable bank
4. Make small purchases and pay the balance in full each month
5. Consider a credit-builder loan from a credit union
6. Become an authorized user on a responsible family member’s account
7. Monitor your credit reports regularly and dispute any errors
8. Be patient – improvement takes time but happens consistently

Timeline for Improvement:

• 6-12 months: Small improvements as you establish new credit
• 1-2 years: Significant improvement possible with responsible habits
• 2+ years: Many clients qualify for conventional mortgages
• 4-5 years: Credit scores can return to pre-bankruptcy levels or better

Many clients tell us they have better credit two years after bankruptcy than they had in the years before filing, largely because bankruptcy eliminates the debt burden that was preventing them from improving their finances.

As part of our service, we provide guidance on rebuilding your credit after your bankruptcy is complete.

I exclusively practice bankruptcy law at the federal level. I do not handle any other areas of law, nor do I practice any State law in Texas. My expertise is specifically focused on helping clients navigate the federal bankruptcy system.

While I exclusively practice bankruptcy law at the federal level, I understand that many clients face state court lawsuits from creditors before filing bankruptcy. For this reason, I have established a formal agreement with another attorney who will represent my clients who are sued by creditors in state court prior to their bankruptcy filing. This ensures you receive appropriate legal representation for your state court matter while we prepare your bankruptcy case. I’d be happy to provide you with a referral to this attorney as part of our services.

I am admitted to practice in the Southern and Eastern Federal District of Texas. I hold law licenses in New York and the District of Columbia.