There is a wealth of information out there about Chapter 7 bankruptcy, but sometimes it helps to start at the very beginning. By understanding just what Chapter 7 bankruptcy is and what it can and can’t do for you, you can take the next step toward deciding whether filing Texas bankruptcy is the right move for your financial future.
Chapter 7 Bankruptcy Basics
Chapter 7 bankruptcy is a process of wiping out unpayable debts through liquidation. A bankruptcy trustee is appointed who collects your available assets, sells those which can be sold, and uses the resulting funds to pay back those debts that can be paid in a certain order established in the bankruptcy code. Once there are no funds remaining for repayment, any outstanding debts are discharged through the court, and you are free of the obligation.
Now, that is the simple explanation. There are countless exceptions, peculiarities, and tiny details that make each case totally unique. Not all debts can be discharged in bankruptcy, among them student loan debts and many taxes, so if you face certain types of debt this strategy will not help you. In addition, Texas law provides a number of exemptions specific to bankruptcy.
If that already sounds more confusing, it is because it is. Chapter 7 helps many people get out from underneath crushing debt, but the labyrinth of paperwork, exemptions, exceptions, and rules surrounding the process can be bewildering. Retaining the services of a qualified bankruptcy lawyer to help navigate these turbulent waters is always the best bet.