In Texas today, almost no one is immune to financial challenges. In fact, the mayor of one Texas town recently made headlines when she filed for Chapter 7 bankruptcy.
Back in 2003, as a university student, the future mayor took out several thousand dollars in student loans. On some of these loans, she had an aunt and uncle co-sign. At some point, however, her relationship with them became problematic, with both sides eventually filing lawsuits against each other. The loan -- just one issue among several claims -- grew during this time to roughly twice its original balance due to compounding interest.
In her Chapter 7 paperwork, the mayor indicated she had debts of nearly $25,000 and just over $1,500 in assets. Chapter 7 bankruptcy allows filers to liquidate their assets in exchange for relief from their debts; however, because Texas's bankruptcy laws are relatively favorable to consumers, it's often possible to protect many assets from being liquidated. The mayor's bankruptcy attorney indicated that he does not expect she will have to liquidate any assets in the Chapter 7 process.
With experienced legal representation, Chapter 7 bankruptcy can be a powerful took to help struggling Tyler residents obtain a fresh financial start. And despite popular opinion regarding the drastic nature of liquidation, Chapter 7 is in fact the most often sought form of bankruptcy protection in the country today. Particularly for those interested in pursuing Chapter 7, a legal professional can help consult on whether any assets will qualify for exemptions.
Source: KSAT.com, "Somerset mayor files for bankruptcy after dispute with family over unpaid student loan," Dillon Collier, April 25, 2018