Texas consumers who are struggling to pay their bills may opt to file for bankruptcy. When a case is filed, a trustee will be appointed to oversee it. In Chapter 7, this person will inventory a debtor’s assets and move to liquidate any nonexempt property. In some cases, a debtor has nothing to liquidate. In such a scenario, the trustee will notify the court that it is a no asset case.
Under Chapter 13, a debtor proposes a plan to pay off creditors that must be approved by a bankruptcy judge. The trustee will also need to determine if the plan is fair before it can be put into action. Once it is approved, the debtor will start making payments until the repayment period has ended.
Regardless of what type of bankruptcy consumers opt for, they will have to file an initial petition. The petition will include information related to how much a person makes per month or what type of assets he or she has. It may also include the amount of debt an individual has and what type of debt it may be. The trustee is responsible for verifying this information or asking for more details from a debtor if necessary.
Filing for bankruptcy may allow people to obtain relief from debts that may be putting them in a tough financial situation. Debtors may be able to get a stay from creditor contact or other collection actions. Foreclosure or repossession of assets may also be prohibited while a bankruptcy case is ongoing. An attorney can guide a debtor through the process of filing for bankruptcy after outlining the eligibility requirements.