Todayâ€™s weak economy has created difficult financial conditions for many individuals over the past few years. Jobs are being lost along with healthcare benefits which is putting even home living arrangements at risk. As bills stack up and the choice becomes keeping food on the table or paying bills, it is easy to understand how individuals and families can get into financial straits. For many people, bankruptcy seems as if it is a viable option when things get that bad; however, lawyers in Bryan Texas caution that it is important to understand how the process works and determine if it is the best option before filing for bankruptcy.
What Is Bankruptcy?
Bankruptcy allows an individual or company to receive Federal protection against lawsuits as well as other money collection efforts and penalties from lenders. It gives debtors a chance to reorganize finances and liquidate property to pay off debt if necessary . Some items may be excluded from repayment depending on the type of property and its value, which is considered â€œdischargeable debt.â€
For those who qualify, it is a useful way to recover financially; however, it should not be considered as a means to avoid financial obligations. Bryan TX lawyers advise bankruptcy does provide easier repayment terms to help a debtor avoid payment penalties and fees; it also helps avoid litigation to recover monies that are owed.
Different Types of Bankruptcy
Bankruptcy law is divided into various chapters, each based on different qualifications and whether the filing party is an individual or a business. The two most frequently filed forms are Chapter 7 and Chapter 13; lawyers in Bryan typically see individuals and small businesses exercising these two options.
- Chapter 7 – Available to individuals or businesses, Chapter 7 involves the liquidation of collateral property to reduce debt; unsecured property is usually excluded. This option is available to those who cannot afford to start a regular, protected payment plan due to lack of income for whatever reason, as those with income usually file Chapter 13. Chapter 7 is usually a short-term resolution of 3 to 6 months.
- Chapter 13 – This type of bankruptcy differs from Chapter 7 as the individual or business has some type of income and wants to pay off any debit either by liquidating property as a means of repayment or retain property in order to establish a feasible payment schedule. Debt limits do apply and missed or late payments on secured property can be included in the payment plan to avoid repossession. Chapter 13 usually involves a 3 to 5 year resolution.
- Others – Chapters 10, 11, and 12 are bankruptcy categories that are much more specific as to which individuals and companies can file this way. These categories also apply to those with more owed debt and unsecured property than the limits in Chapters 7 and 13.
Certain Bankruptcy Considerations
When filing for bankruptcy, each type requires different handling regarding property liquidation, payment determination, and other legal matters. Loans, liens, different types of ownership and debt, and determination of included and excluded property must be identified prior to filing in order to choose the best option; therefore, the services of lawyers in Bryan TX is highly recommended to correctly interpret all such details.
When overwhelmed with debit, bankruptcy can allow for debt to be restructure and payments to begin again. Bankruptcy lawyers in Bryan Texas offer advice to clients about the best way to find relief from financial difficulties with an appropriate bankruptcy plan. It does offer a way to repay debt without the pressure of lawsuits or additional penalties; it is definitely not a path to walk away from money that is owed. When applied to the appropriate circumstances, it may indeed be the best choice for many people facing financial difficulties.
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Looking for lawyers in Bryan TX? Call Hoelscher, Lipsey, Elmore & Poole at (979) 846-4726 for valuable legal service from experienced attorneys!