In Sinton, Texas, bankruptcy is a judicial process in which the debts of a person or business can be cleared 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 useful 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 acquire 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).
Accordingly, you should speak with a good Sinton, Texas bankruptcy lawyer. Your Sinton bankruptcy lawyer can inform you of the costs and benefits of filing for bankruptcy, and give his or her professional advice as to whether or not it's a good option, given your individual circumstances.
Types of Bankruptcy in Sinton, Texas
In Sinton, Texas, there are 3 types of bankruptcy in common use: Chapter 7, Chapter 13, and Chapter 11. Because bankruptcy is a result of federal law, the procedures governing bankruptcy in Sinton, Texas will be similar everywhere else in the U.S. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her property, and use the funds to pay creditors. While this doesn't sound like much of a relief at first glance, the upshot is that once the qualifying property is sold, and the proceeds directed to the creditors, all of the debtor's eligible debts are deemed paid in full, regardless of how much the creditors actually ended up getting. Not all of the debtor's property has to be sold off - the debtor will normally be allowed to keep things like a house, at least one car, some types of personal property, retirement accounts, and insurance policies. It should be noted that some debts are not dischargeable, and will have to be paid in full even if the debtor files for bankruptcy. This includes student loans, taxes, and criminal fines.
The other frequent bankruptcy scheme used by consumers in Sinton is Chapter 13 bankruptcy. In this system, debt is not discharged. Instead, it is restructured. This allows the debtor to have the terms of the contracts that gave rise to their debts in the first place thrown out, and replaced with new terms that call for a structured repayment plan, designed to allow the debtor to survive on whatever income they have, and allowing the creditors to get paid back eventually. Once a payment plan is authorized, creditors are not allowed to attempt to collect payment under the original agreements. Chapter 11 bankruptcy is usually 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 - basically 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.
One advantage of Chapter 11 bankruptcy is that it allows a business going through it to continue operating, and to trade its stock.
How Can a Sinton Bankruptcy Lawyer Help?
Filing for bankrtuptcy in Sinton is a huge decision with costs and benefits that must be weighed carefully. Before filing, it would be a good idea to speak with a seasoned Sinton bankruptcy attorney.