Brownsville Texas Bankruptcy Legal Blog

The inability to meet financial obligations is something that many Texas residents experience at one time or another. Some people are able to recover from these circumstances, but others cannot. In those cases, they may consider filing for Chapter 7 bankruptcy, but worry they may lose the money in their bank and retirement accounts.

Losing these accounts could be a real concern for some people. Fortunately, a large number of filers do not have to worry. The goal of bankruptcy is not to leave an individual or family with no means of financial support. However, if the balance of a bank account is above a certain amount, at least a portion of it could be used to repay creditors.

Perhaps a Texas resident has spent several years accumulating certain assets but then falls on hard financial times. With the debt continuing to mount, he or she decides to look into filing a Chapter 7 bankruptcy in an effort to correct the situation. However, if a person owns certain assets, this may not be the right move.

This type of bankruptcy is commonly referred to as the "liquidation" bankruptcy. The trustee sells the filer's property and uses the proceeds to pay creditors. Fortunately, not all of a person's property is sold since the law acknowledges that people need some assets in order to live. When filing a Chapter 7, the law allows filers to retain property that falls under the category of exempt.

Few people here in Texas, or elsewhere for that matter, have the financial resources needed for extensive, and expensive, hospital care. A sudden serious illness or injury can wipe out a person's finances in no time. That medical debt can follow him or her for months or years. Eventually, not being able to pay that debt could result in one or more lawsuits from medical providers.

Not knowing what to do when this happens could cause a Texas resident a great deal of stress and frustration. Taking certain steps could help relieve some of that stress and frustration and provide a way forward. First, it would be a mistake to ignore the lawsuit. The court could enter a default judgment against him or her that allows the medical provider to begin collection efforts.

When Texas residents experience financial difficulties, they often feel as though they lost control of their lives. Choosing to file for Chapter 7 bankruptcy protection can help them regain some sense of control and receive a fresh financial start. However, they may continue experiencing that same stress during the proceedings since their fate often rests in the hands of a bankruptcy trustee.

The first thing to know about this individual is that he or she does not work directly for the U.S. Bankruptcy Court. These people are independent contractors, usually accountants or attorneys, who receive their caseloads from the Office of the United States Trustee, which is a division of the U.S. Justice Department. Their duties include reviewing a filer's petition for accuracy and completeness, analyzing the filer's financial situation, and looking for irregularities, such as potentially fraudulent transfers.