Arlington Personal Loan Debt Attorney

Lawyers in Tarrant County Helping Clear Personal Loans Through Bankruptcy

Being overwhelmed by debt is one of the worst feelings in the world. When you have mountains of bills that you cannot pay, it is understandable that you would feel trapped, scared, alone, and hopeless. This is true whether the debts are related to credit cards, medical bills, payday loans, an unaffordable mortgage note, or any combination of these types of obligations.

At Acker Warren P.C., we help individuals and businesses throughout North Texas pursue relief from their debts through bankruptcy. We have helped hundreds of clients obtain a fresh start, and you can rely on our experience to help you do the same. Along the way, we have learned that, in the midst of their confusion regarding their debts, many debtors often forget about personal loans provided by friends and loved ones. Leaving off personal loans in bankruptcy documents can have a dramatic effect on both the process and the debtor's life going forward.

Understanding Personal Loans

Credit is generally offered to consumers in the form of lines of credit, installment loans, credit cards, home equity loans, and more. However, when a person's financial situation deteriorates, he or she may be forced to rely on personal loans due to a poor credit score and an inability to qualify for the more traditional types of credit.

A personal loan is any money lent personally to an individual by someone with whom the individual has a personal relationship. This could be a parent, sibling, partner, significant other, or friend. Most personal loans start out as a good-faith attempt to help the individual through a tough time, but the nature of personal loans—and the relationships around them—generally mean that they must be handled carefully, especially if the individual is considering bankruptcy.

From the perspective of the bankruptcy court, a personal loan is usually unsecured, meaning that there is no collateral for the loan. It also means that personal loans are typically dischargeable in a Chapter 7 bankruptcy. If the debtor files for Chapter 13 bankruptcy, the person who gave the loan will need to file a proof of claim in order to have the personal loan included among the debts to be repaid. Including a personal loan on a Chapter 13 repayment plan can be complicated, and our team can help with all of the relevant details.

The Importance of Full Disclosure

When you are considering filing for bankruptcy, you do not get to pick and choose which debts you would like to have addressed. You must list all of your debts and obligations, including any loans given by your parents, siblings, or friends. It might be embarrassing to have personal loans listed in your bankruptcy filing. Being embarrassed, however, is much better than facing penalties for perjury, which is what could happen if you knowingly leave personal loans off of your bankruptcy documents. In addition, if you do not list your personal loan, it will not be discharged, and the party who gave you the loan could take legal action to collect the debt from you despite the bankruptcy.

A Personal Note on Personal Loans

One of the unique considerations of a personal loan in bankruptcy is that you might still want to have a relationship with the party who gave you the money in the first place. Listing the loan among your debts in your bankruptcy documents will help protect you from future legal action, but there is no law that says you cannot go back and make things right with your family member or friend.

Once the bankruptcy proceedings are complete and you start to get back on your feet financially, you have the option to voluntarily repay a personal loan. Doing so could help you ease the strain that a financial obligation—albeit no longer a legal obligation—can put on a personal relationship.

Schedule a Free Consultation Today

If personal loans are contributing to your overwhelming debt load and you are considering filing for bankruptcy, contact our office to get the guidance you need. Call 817-752-9033 for a free consultation with a skilled attorney at Acker Warren P.C. today. We provide bankruptcy and debt-relief solutions for individuals and businesses in Arlington, Fort Worth, Tarrant County, Dallas County, Parker County, and the surrounding communities.