In Converse, 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 proper 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 possible benefits.
Accordingly, it might be a good idea to consult with a Converse, 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 hard to predict the long-term consequences of any bankruptcy-related decisions, so the advice of a bankruptcy in Converse could prove invaluable.
Types of Bankruptcy in Converse, Texas
There are three basic bankruptcy schemes that are most commonly used in Converse: Chapters 7, 13, and 11. Bankruptcy is a creation of federal law, so the process for filing for bankruptcy in Converse, Texas will be roughly the same as it would be anywhere else in the U.S. 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. Varied 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 popular bankruptcy system in Converse is Chapter 13 bankruptcy. Under this system, the debtor's debts are restructured, instead of discharged. This involves creating a new repayment plan that the debtor will find manageable, given his or her income, and that will result in the creditors being paid in a decent amount of time. When a repayment plan is authorized by a court, creditors are legally barred from trying to collect under the original terms of their contract with the debtor. Chapter 11 bankruptcy is almost always used by businesses, but there is nothing that legally prevents it from being used by individuals, and its use by individuals is very rare. Chapter 11 bankruptcy requires the debtor to come up with a restructuring plan - telling the court how they propose to cut costs, fix their operations, and pay down their debts. The plan has to be approved by a majority vote of participating creditors.
One major advantage of Chapter 11 bankruptcy is that it allows businesses to continue their operations while the process plays out. Additionally, their stock can still be bought and sold.
How Can a Converse Bankruptcy Lawyer Help?
The decision to file for bankruptcy in Converse is not one to be made easily, and it definitely should not be made without first obtaining the advice of an accomplished Converse bankruptcy attorney.