Many people living in Texas struggle to pay their bills. While some financial difficulties are temporary, other individuals and families find it impossible to catch up. In these cases, bankruptcy may be an appropriate option.
There are two primary kinds of consumer bankruptcy in the United States. In Chapter 7, a debtor liquidates his or her assets for distribution to creditors, after which the court clears all remaining dischargeable debt. The other option is Chapter 13, in which the debtor may keep some assets but enters into a long-term debt repayment plan. At the conclusion of the plan, the court discharges any remaining debt.
Because a Chapter 13 bankruptcy takes longer and does not require the liquidation of assets, rules for both creditors and debtors can be complicated. In 2017, some guidelines for creditors were changed.
Creditors will now have to file claims on a bankruptcy estate more quickly than in previous years, and debtors will be able to take specific steps, such as removing a judicial lien, more efficiently. These new rules require creditors to be more proactive in taking action once a debtor files for bankruptcy. The impact of these changes on debtors may depend on a number of factors, including whether or not the debtor has significant secured assets.
The complexity of Chapter 13 cases may be overwhelming for some debtors. These individuals may benefit from speaking with a bankruptcy attorney. The lawyer could review a client's case and make recommendations as to the type of bankruptcy that makes the most sense for him or her. In addition, a lawyer may be able to protect the client's interests in cases where a creditor raises challenges during bankruptcy proceedings.