Bankruptcy is a legal process allowing an individual or business to have some or all of their debt excused. It is almost always considered as a last resort because it can have some negative long-term consequences which must be considered, even if you eventually decide that they are outweighed by the benefits. Bankruptcy is a formation of federal law, and goes through federal courts. Therefore, the process governing bankruptcy in Texas will be roughly the same as it is everywhere else in the U.S. But individual courts have different rules for what property is exempt, so you should consult a local Brenham, Texas before you file.
Chapter 7 Bankruptcy in Brenham, Texas
There are 2 typical forms of bankruptcy in Brenham, Texas. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This typically includes homes, vehicles, insurance policies, and retirement accounts. These do not have to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is cleared. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Brenham, Texas is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Brenham, Texas
Chapter 13 bankruptcy in Brenham, Texas is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 does not excuse debt, but restructures it instead. Typically, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is typically manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Brenham, Texas
Which Bankruptcy type to file under depends strongly on the facts of each distinct case. If you have a stable stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a stable income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
Regardless of your situation, you should speak with an attorney in Brenham, Texas who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.