In Waxahachie, 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 fitting 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).
Therefore, it is a good idea to talk with an veteran bankruptcy lawyer in Waxahachie, Texas. They will be able to advise you on the likely legal and financial consequences of filing for bankruptcy, and help you determine if it's the right option for your. Because this determination depends heavily on the facts of each distinct case, the counsel of a Waxahachie bankruptcy attorney cannot be replaced.
Types of Bankruptcy in Waxahachie, Texas
There are three basic bankruptcy schemes that are most commonly used in Waxahachie: Chapters 7, 13, and 11. Bankruptcy is a creation of federal law, so the process for filing for bankruptcy in Waxahachie, Texas will be roughly the same as it would be anywhere else in the U.S. Chapter 7 bankruptcy involves liquidation of part of the debtor's assets to pay off as much of his or her debt as possible. Once the liquidation is done, and the proceeds given to the creditors, the rest of the debt is discharged. Liquidation is essentially selling assets to the highest bidder. Only some of the debtor's assets have to be sold, and numerous classes of property are exempt, meaning that the debtor can keep them, including homes, cars, insurance policies, and retirement accounts. It should be noted that certain types of debt cannot be discharged through Chapter 7 bankruptcy, including student loans, child support payments, criminal fines, and recent taxes.
The other form of bankruptcy most frequently used in Waxahachie is Chapter 13. It allows a person to pay off their debt over an extended period of time, often consolidating it into one periodic payment. In this system, the amount of money the debtor owes is not actually reduced, but the payment of the debt is made far more manageable. This gives the debtor some breathing room, allowing him to continue to earn a living while slowly paying down his debts, and gives some security to creditors that they will eventually collect all or most of what they're owed. 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.
A major advantage of Chapter 11 bankruptcy is that businesses can continue their operating while going through the process. Also, they can continue to buy and sell their stock.
How Can a Waxahachie Bankruptcy Lawyer Help?
The decision to file for bankruptcy in Waxahachie is not one to be made easily, and it definitely should not be made without first obtaining the advice of an efficient Waxahachie bankruptcy attorney.