Some Texas residents may know that the United States Supreme Court ruled in May that funds that were not distributed to creditors while a debtor was in Chapter 13 bankruptcy must be returned to the debtor by the trustee if the bankruptcy is converted to Chapter 7. This ruling clarifies what has become a difference of opinion among bankruptcy courts.
Many people living in Texas struggle with high levels of debt. These individuals may seek various types of debt relief, including credit counseling, debt settlement and other types of repayment plans. While these efforts sometimes work, many people find that filing for Chapter 7 bankruptcy is a good option. More importantly, some individuals realize that filing for bankruptcy is something that they should have done sooner rather than later.
The last time a major change was made to bankruptcy laws was in 2005, when new regulations were passed that made it more difficult for people to file. Due to the stigmata that tends to be associated with filing for bankruptcy, it was considered by many to be a good move. However, while individuals in Texas and elsewhere may feel branded for filing, businesses use it regularly and are lauded for doing so.
People considering filing bankruptcy in Texas should be aware that only certain types of bankruptcy allow for tax debt relief. In addition, only certain kinds of federal tax debt are eligible for relief. Understanding how various types of bankruptcy work is important to understanding what tax options may be available. Chapter 7 bankruptcy may be a viable option, but Chapter 13 may be one's only recourse.
When a small business owner chooses to file for bankruptcy in Texas, they may fear for the future of their business. Whether or not a business owner is able to keep their business after bankruptcy depends on the type of business they have and the type of bankruptcy they file for.
For some Texas residents, bankruptcy protection may be the only answer for debt relief. However, the question of which type of bankruptcy to file can be difficult due to the differences between them.
Many people may have questions about what kinds of property they can keep when declaring bankruptcy in Texas. Depending on what type of bankruptcy someone files, certain assets may be exempt from collection activity.
Texas debtors who are considering bankruptcy may wonder what chapter 7 bankruptcy entails. The chapter, also known as liquidation, involves the selling off some of the debtor's property and assets in order to pay a small portion of the owed debt. Texas law does exempt certain categories of property from liquidation, so although debtors may lose some property, they will also be allowed to retain some as well.
A Texas bankruptcy case does not begin until a petition is filed, and it is important to complete some preliminary steps before filing. Chapter 7 is ideal for liquidation purposes, allowing many unsecured debts to be discharged. However, this is reserved for those who are in a financial state that requires legal action when pursuing a fresh start. Those with sufficient means are not eligible for Chapter 7, and eligibility is determined through means testing.
Texas residents who are in debt might benefit from learning about the different benefits of filing Chapter 7 bankruptcy. This option is often referred to as the liquidation chapter of the U.S. Bankruptcy Code. Chapter 7 bankruptcy allows debtors to discharge the debts listed on their bankruptcy schedule. However, when a person files, a court appointed trustee is tasked with collecting and selling all non-exempt property belonging to the debtor.