Practice Areas - Bankruptcy

Bankruptcy - Chapter 7

Often referred to as a “liquidation bankruptcy,” individuals who have very minimal disposable income (income in excess of the amount of bills for necessary expenses) can file for bankruptcy relief under Chapter 7 of the United States Bankruptcy Code.  For individuals it is a popular misconception that because a Chapter 7 Bankruptcy is referred to as a “liquidation,” an individual filing a Chapter 7 Bankruptcy loses all of his/her property.  This is simply not true.  Thanks to the exemption laws in the State of Texas, individual debtors are able to take advantage of the protection provided for by the Texas Legislature under the Texas Property Code that exempts certain portions of an individual’s property from being seized by creditors to pay debts.  Some federal statues also provide exemptions that protect certain assets of a debtor from being seized as well, e.g. retirement accounts.

What are the benefits of a filing a Chapter 7?  A Chapter 7 Bankruptcy is generally a much faster process than a Chapter 13 Bankruptcy case.  In either a Chapter 7 or a Chapter 13 Bankruptcy, an individual is seeking a discharge of his/her debts.  In a Chapter 7 Bankruptcy case, individuals are usually granted a discharge of their dischargeable debts within 120 to about 180 days after the case is filed.  Before you obtain your discharge, you will attend a “meeting of creditors” which is often referred to as a “341 meeting.”  The U.S. Trustee that has been assigned to your case will review your bankruptcy forms and ask you some basic questions, and, more often than not, your creditors will not attend this meeting.  While 180 days may seem like a long period of time, Chapter 7 bankruptcy is a much faster process than a Chapter 13 bankruptcy.

What Property Do I get to Keep?

 

 


 

Terminology Help

Chapter 7 - Liquidation form of Bankruptcy.

Chapter 13 - Payment Plan form of Bankruptcy.

Chapter 11 - Business and Corporate Reorganization

Businesses - What Happens to My Business in Bankruptcy?

Individuals - What Can I Keep In Bankruptcy?

Other Important Bankruptcy Terms You Should Know.