Keeping All Your Property in a Bankruptcy Filing
When you file for protection under Chapter 7 of the bankruptcy laws, you have the opportunity to permanently discharge many debts in exchange for the transfer of some of your property to the bankruptcy trustee. Some debts, such as child support, cannot be discharged by law, and others, including student loan payments and some tax arrearages, are extremely difficult to discharge. With respect to your property, you can choose the exemptions under state or federal law (but you can’t mix and match). Of course, under the 2005 revisions to the bankruptcy laws, you’ll need to pass a “means test” to qualify for Chapter 7.
As a practical matter, though, most people who file for Chapter 7 bankruptcy don’t have to turn any assets or cash over to the bankruptcy court. These filings are generally known as “no-asset bankruptcies.
What Is a “No-Asset” Chapter 7 Bankruptcy?
If you can protect all of your property using the state or federal bankruptcy exemptions, your Chapter 7 petition will be considered a “no-asset” filing. In Chapter 7 bankruptcies where property is turned over the trustee, that property is sold, with the proceeds used to pay some of the debts to creditors. If the bankruptcy court determines that all your assets are exempt under bankruptcy laws, they will send a notice out to your creditors, notifying them that they won’t receive any payments in the bankruptcy proceeding. That simplifies the process for creditors, who then don’t need to file a proof of claim showing how much you owe them. However, if the court subsequently discovers unknown or unreported assets, the trustee will notify creditors andnew proofs of claim can be filed.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. I am currently communicating with clients by phone, text messaging or videoconferencing. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.
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