Bankruptcy in Texas is a legal procedure through which some of the debts of an individual or a business are discharged (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult process. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good Texas bankruptcy attorney can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your particular case.
Types of Bankruptcy in Texas
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in Texas will be the same as anywhere else in the United States. There are 2 basic types of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy usually used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
In Texas, Chapter 7 bankruptcy is referred to as "liquidation." The court will conduct an accounting of all of the debtor's assets, and determine which ones should be sold to help pay off the debts. Many classes of property, such as homes and cars, are exempt from this requirement, and therefore don't have to be sold. Once all of the eligible property is sold off, and the proceeds given to the creditors, the rest of the debt is discharged. Chapter 13 bankruptcy involves restructuring, rather than discharging, one's debt. Basically, the court structures a debt repayment plan meant to allow the debtor to pay off his or her debt in manageable installments, while allowing the debtors to eventually collect at least some of what is owed to them.
Chapter 11 bankruptcy is normally used by businesses, rather than individuals. Much like Chapter 13, it involves reorganization of debts. It compels the debtor to come up with a reorganization plan, but this plan has to be approved by a majority vote of participating creditors. Once it is approved, the company is obligated to carry it out.
How Can a Texas Bankruptcy Lawyer Help?
Because bankruptcy is a huge financial and life decision, it is not one to be made without as much information as possible. A Texas bankruptcy lawyer can help give you this information, and advise you as to whether or not bankruptcy is a prudent course of action, given your individual situation.
Interesting Facts About Texas
Texas has a population of over 25 million people and is the second largest state by population and geographic size. Large industries like agriculture drive the state's economy. The Texas region was previously under Spanish colonial rule; at one point its official name was "Nuevo Reino de Filipinas: La Provincia de Texas".
A popular saying is "Everything is bigger in Texas". This is true even of the state's judicial court system, which is one of the most complicated in the entire U.S. This is because at each level, courts may be subdivided into separate civil and criminal branches. For example, most states only have a Supreme Court at the highest level; however, Texas has two courts of last resort, the Texas Court of Criminal Appeals and the Texas Supreme Court for civil cases.
The state of Texas maintains a special branch of law enforcement called the Texas Ranger Division. The Texas Rangers are commonly cited in popular media and have played a major role in many famous Texas criminal cases. A famous Texas civil case is Van Orden v. Perry (2005), which involved a Constitutional challenge of "religious symbols" located in front of the capitol building in Austin.
At times it may be necessary to hire a lawyer in Texas in order to navigate the multi-layered judicial system. Texas lawyers are skilled at processing claims in the different types of state courts. Working with a lawyer can help ensure that your legal needs are properly met.