It doesn't take a genius to recognize that debt can create stress. While some debts are necessary and can be handled with ease, some Texans find themselves facing insurmountable debt. The reasons can vary greatly, from unexpected medical expenses, a lost job or if an individual suddenly has to care for an aging relative. Regardless of the reasons, when overwhelming debt takes hold, Texans can find their financial well-being crushed, and they may despair for their financial future.
Many debt holders concern themselves with the rights their creditors may have. Creditors do have some rights to protect themselves in the event that a debtor is unable to pay his or her debt. Transactions may be made secured, where a debtor puts up collateral, and creditors can seek attachment, where they are given title to certain property. When this tactics fail to succeed, creditors may seek an involuntary bankruptcy against a debt holder.
Just as a debtor would have to file a petition to initiate bankruptcy proceedings, so too would creditors seeking an involuntary bankruptcy. However, if creditors succeed on their petition, then a debtor may be forced to liquidate, or sell, his or her assets in order to pay off outstanding debts. Alternatively, creditors can seek to have a debtor's debts reorganized in a fashion that will allow outstanding debts to be paid off.
Those facing exorbitant debts need to ensure that they protect themselves, as creditors oftentimes overstep their bounds. In the example of an involuntary bankruptcy petition, for example, debtors can take legal action if the petition was filed in bad faith. Those who are being harassed by creditors can speak with a legal advocate to learn more about how to protect themselves, their legal rights, and how to best pursue debt relief options that may be available to them.
Source: FindLaw, "Creditors' Rights and Collection Options," accessed on March 12, 2017