Bankruptcy is a legal process allowing an individual or business to have some or all of their debt absolved. 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 ultimately decide that they are outweighed by the benefits. Bankruptcy is a creation of federal law, and goes through federal courts. Therefore, the procedure governing bankruptcy in Texas will be roughly the same as it is anywhere else in the U.S. But individual courts have different rules for what property is exempt, so you should consult a local Cleburne, Texas before you file.
Chapter 7 Bankruptcy in Cleburne, Texas
There are 2 main types of bankruptcy in Cleburne, Texas. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 involves liquidation of some of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This normally includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is absolved. But some types of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Cleburne, Texas debts are not dischargeable, you might want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Cleburne, Texas
Chapter 13 Bankruptcy in Cleburne, Texas is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each particular case. Chapter 13 does not absolve debt, but restructures it instead. Normally, 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 normally manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Cleburne, Texas
This depends entirely on the facts of your individual case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
Of course, you should always seek the counsel of an experienced local Cleburne, Texas bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your individual situation.