In Fort Bend County, Texas, bankruptcy is a judicial process in which the debts of a person or business can be eliminated or restructured. This allows the debtor to climb out of a financial hole, and move on with a clean slate, which is sometimes more economically efficient than requiring the debtor to pay off everything they owe. Bankruptcy should be treated as an option of last resort, and should not be viewed as a proper way to get out of debt that you just don't feel like paying. Bankruptcy can have severe consequences, including but not limited to damage to your credit rating. A bad credit score can impact your ability to obtain loans in the future, to rent an apartment, and possibly even your ability to get hired at some jobs (as some employers now run credit checks on prospective employees).

Therefore, it is prudent to consult with an experienced Fort Bend County, Texas bankruptcy attorney, who can advise you of the costs and benefits of bankruptcy. Because the decision to file for bankruptcy depends very heavily on the facts of each individual case, the advice of a Fort Bend County bankruptcy attorney cannot be substituted.

Types of Bankruptcy in Fort Bend County, Texas

There are three basic bankruptcy schemes that are most commonly used in Fort Bend County: Chapters 7, 13, and 11. Bankruptcy is a creation of federal law, so the procedure for filing for bankruptcy in Fort Bend County, 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 proceeds 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.

Under Chapter 13 bankruptcy in Fort Bend County, most of the debtor's debt is not discharged. Instead, the bankruptcy court, working with the debtor and participating creditors, work out a payment plan that allows the debtor to pay off most of his or her debts over a prolonged period of time, thus theoretically making the debt far more manageable. Once a payment plan is approved by the court, creditors are prohibited from attempting to collect payment under their original agreements that gave rise to the debt in the first place. Though accessible to individuals, Chapter 11 bankruptcy is generally used by businesses. Like Chapter 13, Chapter 11 requires the restructuring of debts. Under this system, the debtor must come up with a plan to reduce debt, cut costs, and improve operations. Once this plan is presented, it is submitted to the participating creditors, who must approve it by a majority vote before it can be implemented.

One main 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 Fort Bend County Bankruptcy Lawyer Help?

The decision to file for bankruptcy in Fort Bend County is not one to be made lightly, and it certainly should not be made without first obtaining the advice of an accomplished Fort Bend County bankruptcy attorney.