In Texas, bankruptcy cases prevent adverse legal actions in most cases. The claims provide fast protection for assets based on the chapter chosen. The consumer chooses the chapter that is most appropriate after establishing their eligibility to file bankruptcy. A bankruptcy lawyer in Keller, TX provides details about bankruptcy cases and how consumers should file.
How Is Disposable Income Used During Bankruptcy?
Under chapter 13, the consumer must use their disposable income to pay the debts that weren’t included in the claim. The disposable income is any value left over after all monthly expenses are paid.
Under chapter 7, the consumer’s wages earned after the claim is approved belong to the consumer. There aren’t any further restrictions on assets in chapter 7.
When Does the Automatic Stay Work?
The automatic stay starts as soon as the bankruptcy case is approved. The bankruptcy feature prevents creditors from taking legal action against the consumer. It lasts for up to five years for chapter 13, and for up to six months for chapter 7.
Does Chapter 13 Protect Assets?
Certain exemptions apply in chapter 13 that prevent consumers from losing assets. The chapter is chosen when the consumer is facing foreclosure and needs to catch up their mortgage payments. The overdue balances are paid off over time and at a more affordable rate.
Who Chooses Assets for Liquidation?
The court reviews all assets owned by the filer and determines which assets will generate the highest proceeds. The primary home is protected under the homestead exemption. However, many other assets are up for grabs. The court secures all deeds and titles for the properties when the claim is approved.
All proceeds are distributed by the trustee assigned to the case. Any exempted values left over are sent to the consumer after the debt is paid off. However, the consumer has the option to rebuy some belongings such as assets sold at auction.
In Texas, bankruptcy cases offer help when consumers are facing dire financial circumstances. The consumers review chapter 7 and 13 to determine what option is most suitable for their circumstances. Consumers who need help right now can contact a bankruptcy lawyer in Keller, TX at the Law Firm of David S. Kohm today.