Chapter 7 bankruptcy is one of several ways in which a person under the burden of overwhelming debt can obtain relief. As many Tyler, Texas, residents may be aware, in a typical Chapter 7 filing, all non-exempt assets of a debtor are liquidated in order to repay debtors. After those debts are repaid, the individual obtains a discharge from all debts, except for certain financial obligations -- such as child support, alimony and certain non-dischargeable taxes.
When someone is suffering with overwhelming debt, one of the best ways to obtain debt relief is by filing for bankruptcy. In many cases, a debtor may be able to prevent liquidation of all personal assets in order repay creditors, but in some situations creditors may demand that a debtor liquidate all assets in order to repay debt. Such cases are handled according to the guidelines of Chapter 7 of the United States Bankruptcy Code and such types of bankruptcy filings are known as Chapter 7 bankruptcy filing.
Chapter 7 bankruptcy proceedings, popularly known as liquidation proceedings, are often the hardest financial decision a Texas resident could make. Filing for bankruptcy under liquidation proceeding often leads to losing some of the most important financial assets for the debtor. It can also be a major blow to one's self confidence and self-esteem.
Many Smith County residents may be aware that in 2005, federal lawmakers made certain changes to the U.S. Bankruptcy Code. Those changes were included in the Bankruptcy Abuse Prevention and Consumer Protection Act. The purpose of the act was to discourage people from abusing the option of bankruptcy. One of the most significant changes was an increase in filing fees. Some critics have said the increase in fees has created a big problem.
Due to the recent economic problems and the slow rate of economic recovery, people from all over the country, and even here in Texas, may find it difficult to reorganize their finances and get their lives back on track. Financial pressure may culminate in different kinds of debt like rent, unpaid credit card bills and loan repayments. In order to give people a second chance at recovery, avoid creditor harassment and protect their assets, Chapter 7 bankruptcy can be a viable solution.
Under Texas law, Federal Rules of Bankruptcy Procedure often quoted as the bankruptcy rules govern the statutory requirements in filing for bankruptcy procedures. Dedicated courts are made in the state in order to cater to such bankruptcy proceedings.
There are many reasons why Texas residents may encounter hard times financially. Medical bills, the costs associated with the loss of a loved one, credit card debt, and many other causes can bring financial ruin to individuals and families. Those who may have found themselves buried in debt may want to consider filing for bankruptcy. Chapter 7 of the bankruptcy code has certain unique advantages, and when a debtor has qualified for Chapter 7 through a means test, several doors may open up, which can help an individual with the heavy burden of debt.
Not many Texans are free of debt. In fact, not many students graduate debt free, and those who do are considered lucky. For example, consider the situation of a woman who earned her degree in 2003 without incurring any debt. She got married, bought a house and a car and everything seemed to be going well. However, she then lost her job in 2008.
When debt becomes too heavy a burden, many Texas residents seek relief by liquidating assets. Bankruptcy with asset liquidation in order to repay creditors is known as Chapter 7 bankruptcy. To file for Chapter 7 bankruptcy, certain criteria must be fulfilled.
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.