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Common Concerns & Questions About Bankruptcy

Texas Chapter 7 bankruptcy trustee collects part payment

On Behalf of | Aug 20, 2014 | Chapter 7 |

While an individual or a business facing insurmountable financial challenges has the option of filing for bankruptcy, the type of bankruptcy petition can vary based on the circumstances. A Chapter 7 bankruptcy, as Tyler, Texas, residents probably know, requires debtors to meet certain criteria relating to their income level. Such a debtor can either be an individual or a business, although in some cases the debt may have originated from personal, as well as business activities.

A bankruptcy trustee appointed to supervise the liquidation bankruptcy cases of Amarillo, Texas, based Big State Remodeling, as well as that of the company’s owner, recently reported the receipt of a partial payment. The amount received will go partly towards corporate debt and personal debt. Nonetheless, corporate creditors may still have to wait for repayment, with a local bank set to collect a large part of the received sum to fulfil an existing lien on the company’s receivables.

According to the trustee, the case may see the transfer of more funds towards corporate debt, while the amount received relating to the owner’s liquidation case might only increase marginally depending on the approval of a settlement plan. The original bankruptcy plan documents indicated that the total debt was in excess of $3 million, while available assets were worth between $1.3 million and $1.8 million. The amount received thus far is $125,000.

Per Texas law, certain personal property, such as vehicles, are exempt, which means they cannot be used to fulfil debt obligations. In the present case, however, the trustee has objected to exemptions on as many as four automobiles and a motorcycle. In the event the owner defaults, some of the vehicles may be seized by the trustee. In addition, the owner also faces monthly payments of $10,000 as contributions to the bankruptcy fund.

Source: Amarillo Globe News, “Trustee collects $125K to pay creditors in Big State bankruptcy,” Karen Smith Welch, Aug. 7, 2014

Source: Amarillo Globe News, “Trustee collects $125K to pay creditors in Big State bankruptcy,” Karen Smith Welch, Aug. 7, 2014