In Texas, consumers and business owners start a bankruptcy claim to avoid legal action such as foreclosure and repossession of assets. The claims provide an automatic stay for the claimant that stops all legal action started by creditors. A local attorney can answer questions about chapter 7 bankruptcy in Denton, TX.
Does the Consumer Get to Choose Which Assets Are Sold?
No, the court reviews the consumer’s assets, and they determine which assets should be sold according to state exemptions. Typically, the primary home and the consumer’s car are exempt from liquidation. However, the attorney can provide further insight into which assets are covered under the exemption laws.
Does the Consumer Have to Attend Credit-Counseling Courses?
Yes, all consumers must complete the credit-counseling courses at least six months before they intend to file for any form of bankruptcy. The program must be approved by the state, and the claimant should acquire a certificate of completion to show that they completed the course according to the prerequisites outlined in bankruptcy laws. Most programs are free or available at a low cost.
Is Income Information Necessary for the Claimant?
Yes, the state must assess the claimant’s income to determine if liquidation is available to them. In some cases, the state may require chapter 13 instead if the claimant has an income that exceeds the state average based on their household size. If their income indicates that they could pay off the debts, they may need a new repayment plan instead of liquidation.
Is the Claimant Involved in the Liquidation Process?
Outside of providing deeds and titles to their assets, the claimant isn’t involved in the process. The state assigns a trustee to manage the sale of all assets and the distribution of the funds to their creditors.
In Texas, consumers and business owners file for bankruptcy when they are facing overwhelming debts. Chapter 7 provides an opportunity to settle their debts by selling off their assets and using the proceeds to pay their creditors. Claimants who have questions about chapter 7 bankruptcy in Denton, TX can contact the Law Firm of David S. Kohm right now.
