Bankruptcy is often seen as the last resort for low-income families in Texas. But many people don’t realize that bankruptcy can be expensive. If you can’t afford the high fees, you may have no choice but to sink even deeper into debt. Fortunately, a new bill is looking to change that.
How a new bill could help minority and low-income families
In December 2020, two senators introduced a bill that would combine Chapter 7 and Chapter 13 bankruptcy into one streamlined system. This new system could benefit minority families in many ways. First, this new system would allow people who file for bankruptcy to discharge some of their criminal fines. This could benefit minorities, who typically receive harsher sentences than their white counterparts. Second, the new system could also stop the practice of attorneys disproportionally recommending Chapter 13 to minority clients, which doesn’t allow them to discharge most of their debts.
Currently, people who file for Chapter 7 bankruptcy must pay their attorney fees up front, which can be too expensive for low-income families. The new system would offer clients a payment plan, so they can pay back their attorneys over time. This can make it easier for low-income clients to apply for bankruptcy and get their debts discharged, so they can start fresh with a clean slate.
However, the bill will have to be passed before the new system becomes law. Until then, you can hire an attorney to help you navigate the current bankruptcy system.
Are attorneys worth the extra fees?
Paying for a lawyer may not sound appealing to low-income families. However, an attorney could help you complete the bankruptcy process quickly and efficiently while avoiding making costly mistakes along the way. He or she could also help you figure out what type of bankruptcy fits your situation.