In Big Spring, Texas, bankruptcy is a judicial process in which the debts of a person or business can be excused or restructured. This allows the debtor to climb out of a financial hole, and move on with a clean slate, which is often more economically feasible than requiring the debtor to pay off everything they owe. Remember, though, that bankruptcy should not be viewed as a fitting way to get out of debt that you don't feel like paying back. It is meant to serve as an option of last resort for people and businesses faced with debt that they will probably never be able to pay back. The decision to file for bankruptcy can result in negative consequences, such as damaged credit ratings, which must be seriously weighed against the probable benefits.
Accordingly, it might be a good idea to consult with a Big Spring, Texas bankruptcy attorney. Your lawyer will be able to counsel you about your options, including alternatives to bankruptcy, if such alternatives exist in your case. Whatever the result, it is often challenging to anticipate the long-term consequences of any bankruptcy-related decisions, so the advice of a bankruptcy in Big Spring could prove invaluable.
Types of Bankruptcy in Big Spring, Texas
There are 3 bankruptcy tactics that are largely used in Big Spring: Chapter 7, Chapter 13, and Chapter 11 bankruptcy. Bankruptcy is governed by federal law, so the procedures in Big Spring, Texas are very similar to what they will be anywhere else in the United States. Chapter 7 bankruptcy involves liquidation of many of the debtor's assets in order to pay off as much of the debt as possible. This sounds harsh, but there is an upside: once the liquidation is complete, the debts are legally viewed as having been paid in full, whether or not the full amount was covered by the liquidation. Liquidation involves selling some personal property, and using the funds to pay off debt. Numerous types of property are exempt from liqudiation, and therefore may not need to be sold. They include homes, cars, and insurance policies, among others. You should know that some types of debt cannot be discharged in Chapter 7 bankruptcy, including taxes, student loans, and child support.
The other largely used bankruptcy system in Big Spring is Chapter 13 bankruptcy. This allows a debtor to repay most or all of their debts in a structured manner. It reorganizes the debt into lower periodic payments that, with a bit of frugality, the debtor should find manageable. This allows the debtor to continue to earn a living, and allows the creditors to eventually collect what they are owed. Once a repayment plan is authorized by the bankruptcy court, creditors are legally barred from seeking repayment under the terms of the arrangements that gave rise to the debt in the first place, and will instead have to accept payment under the new plan. Chapter 13 bankruptcy is typically a better option for people who have a steady income. Chapter 11 bankruptcy is generally used by businesses, though it can be used by individuals (which is quite rare). Chapter 11 bankruptcy requires that the debtor come up with a reorganization plan - typically telling the court how they propose to cut costs, streamline their operations, and pay their debts. This plan must be authorized by the participating creditors through a simple majority vote.
During the Chapter 11 process, a business can typically continue its operations, and the stock can be traded, even if it is de-listed from a major stock exchange.
How Can a Big Spring Bankruptcy Lawyer Help?
Filing for bankruptcy in Big Spring is a very important decision, and should not be made easily. Before filing, one should consult with a seasoned Big Spring bankruptcy attorney for assistance.