In Texas, consumers and businesses could accumulate excessive debts and face dire financial circumstances at any time. For this reason, a permanent solution is necessary to lower the chances of losing their home, business, or vital assets. A Round Rock Bankruptcy Lawyer can provide legal assistance and experienced guidance for these businesses and consumers.
For consumers and businesses, bankruptcy is a legal claim that lowers the risk of foreclosure, repossession, and other legal action by creditors. It is often a last effort to protect assets for consumers and a chance to prevent the total shutdown of a company. With each type of bankruptcy, the claimant must follow specific guidelines and rules. Any failure to comply with the requirements of the bankruptcy laws ends in a discharge of the bankruptcy case, and the claimant is immediately responsible for all debts listed in the claim. Once an early discharge occurs, the rights of creditors to file a legal claim against the claimant are restored.
The key to filing for bankruptcy is to know which chapter applies to the current circumstances of a consumer or business. A Round Rock Bankruptcy Lawyer can review the circumstances and determine which chapter is best suited for our client’s needs. The assessment establishes which chapter provides the greatest level of asset protection and stops unnecessary financial losses.
Chapter 7 bankruptcy is essentially the total management of all debts through liquidation. The process starts with an assessment by the court of all assets a consumer owns. The court assigns a trustee to determine which assets are used to accumulate funds to pay off debts. All deeds and titles for the selected assets are collected by the court’s trustee and sold.
Assets are sold through various means including but not limited to private sales and auctions. The proceeds are collected by the trustee and divided among creditors listed in the bankruptcy claim. Any exempted values generated from the sale are returned to the consumer.
The entire process is completed in no more than six months. During the six-month period, the consumer is protected from any legal action initiated by creditors. Typically, at the end of the case, the consumer is debt-free.
For consumers, chapter 13 bankruptcy is used to create a more structured payment plan to settle debts over a predetermined amount of time. Typically, the cases last three to five years and provide protection from legal action throughout the full duration of the claim.
The court determines the exact payment submitted each month. It is based on the consumer’s income and debts. In some cases, the payments are deducted from their wages before taxes are applied. If the consumer fails to submit payments, the court could discharge the claim.
In chapter 13, the court discharges certain debts. When debts are discharged in bankruptcy, the consumer is no longer responsible for them, and the accounts are listed as paid in full. The most common debts that are discharged are unsecured credit card debts. The court won’t discharge student or business loans that were provided by the federal government.
To qualify for chapter 13, the consumer must have an income that is greater than the median income for their household size. Income statements or tax returns are often used to provide evidence of the consumer’s income.
Chapter 11 bankruptcy is similar to chapter 13 and provides a reorganization of debts for companies and commercial enterprises. The cases allow company owners to create a new way to settle their debts while continuing to operate their business. The process requires the company owner to submit a plan for reorganizing and settling their debts through the court.
The benefits of this type of bankruptcy claim include the opportunity to become more profitable by eliminating debts faster. It also frees up capital and discharging troublesome debts. The opportunity enables the owner to eliminate certain contracts as well. The plan also helps the owner consolidate their debts and gain better control over their business and incoming profits.
Consumers who are facing overdue tax implications need a clear solution, too. An attorney can negotiate with the IRS and set up a payment plan. In some cases, the taxpayer could acquire a discount and pay less overall.
By managing overdue payments, the taxpayer could avoid a tax lien that the IRS applies to their assets. If a tax lien is applied, the IRS could seize certain assets as payment for any overdue tax payments. Among the assets that the agency can seize are the balance of the taxpayer’s bank account, real property, and financial assets.
Consumers who aren’t quite ready to file for bankruptcy could acquire settlement offers for certain debts. A bankruptcy attorney negotiates with creditors to lower the balance of the debt and obtain a settlement offer. In some cases, the settlement offer is up to fifty percent lower than the original debt value.
The meeting of creditors is a hearing in which all creditors associated with the consumer or business approve or deny inclusion into the claim. Essentially, the creditors have the right to review the plan as it pertains to their account and the balance owed to them. If the creditor denies inclusion, the consumer or business must continue to submit payments to the creditor as outlined in their contract. If the debt isn’t included in the claim, the automatic stay won’t apply to the account. The automatic stay prevents the creditors from filing a lawsuit or other legal claim to collect the money owed to them. The stay lasts throughout the full duration of the case and applies to debts included only.
Certain debts are ineligible for discharge in bankruptcy in all chapters of bankruptcy. Any overdue child support or alimony owed by the consumer isn’t discharged. Any settlements owed for personal injuries that were produced via malicious intent or driving while intoxicated aren’t eligible. All loans secured by capital or real property, student loans, and any loans that resulted from fraud aren’t discharged. The consumer or business remains responsible for any debts incurred after the bankruptcy claim is filed.
A Round Rock Bankruptcy Lawyer at The Jackson Firm in Round Rock, Texas helps consumers and businesses gain approval for their preferred chapter of bankruptcy. We offer assistance in creating reorganization plans and explain opportunities for liquidation. We also provide assistance for acquiring settlement offers with creditors that could be up to fifty percent lower than the original debt. We can help all consumers and business owners gain asset protection and an automatic stay before creditors take legal action.
In Texas, consumers and businesses who are facing legal actions such as foreclosure and repossession need a clear solution right now. The chapters of bankruptcy provide a method of becoming debt-free without significant losses. A Round Rock Bankruptcy Lawyer can provide fast legal representation for all dire financial circumstances. If you are facing these circumstances, contact The Jackson Law Firm in Round Rock, Texas.