The Lone Star State Suffers

Texas is well known for its rich oil history, but recession-weary residents of the Lone Star state are struggling to pay those climbing prices at the pump along with the rest of the nation.  Bankruptcies filed in 2008 hit record levels with over 44,000 in Texas alone, and nearly 93% of those filed by consumers.    It is estimated that 1.4 million consumer bankruptcies will be filed in the U.S. in 2009, the surge triggered by the foreclosure crisis and economic downturn.

Competent Legal Advice a Must in Texas

The Federal Bankruptcy Law involves processes, procedures and evaluations which can be complex and confusing, including major revisions made in 2005.  Seek the advice of a Texas law firm with specific long-term experience in Texas bankruptcy matters.  Check references, if possible.  A competent Texas attorney will help you weigh your different options, make informed decisions, help you protect the security of your family and reduce your stress, while facing the realities of the situation. 

Filing a Chapter 13 Bankruptcy in Texas

Generally, all consumers considering bankruptcy in Texas will file either a Chapter 7 (liquidation) or Chapter 13 bankruptcy.  Chapter 13 provides for your creditors to be paid back all or a portion of the debt owed, over a period of three to five years.  Chapter 13 is often used in Texas to prevent a foreclosure of a home or repossession of a car.  Texas filers who do not pass the Chapter 7 “means test” will be required to file Chapter 13 or remove themselves from the bankruptcy process entirely. 

Paying Debts Outside of Your Texas Bankruptcy

Certain debt payments may be considered preferential and the Texas Bankruptcy Trustee carries “avoidance power” to overturn certain transfers or obligations made by the debtor prior to or during bankruptcy.  Examples include:

·         Property transferred or paid during relevant time period before bankruptcy

·         Something passed from the bankruptcy to a creditor

·         Payment occurred at a time when the bankrupt consumer/business was insolvent

·         One creditor is given advantage over another creditor

·         Creditor suspected or should have suspected that the bankrupt consumer/business was insolvent

Texas Bankruptcy Alternatives

Contact your creditors to try to work out payment arrangements that you can manage.  Contact the non-profit Consumer Credit Counseling service to get help with a manageable repayment plan.  Sell as many assets as you can and pay down your debt to a manageable level.  Debt consolidation may be considered, but approach this option with caution to make sure it actually helps your situation.

Final Thoughts on Texas Bankruptcy

Texans continue to suffer, as the State’s economy struggles to recover.  Decisions you make and actions you take now can have a positive or negative effect on the outcome of your bankruptcy proceedings.  The U.S. Bankruptcy Court cautions that “Bankruptcy has long-term financial and legal consequences -- hiring a competent attorney is strongly recommended.” Click here to find Texas attorney resources in your area. 

• If you are at risk of filing for bankruptcy or already in the process, Submit Your Case for a Free Review from a Bankruptcy Attorney in Texas.

Contact Texas Bankruptcy Attorneys

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