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BANKRUPTCY Basically, the Texas law protects the creditors property from being seized and that is legal in Texas law. No creditor can reach certain kinds of ones property. Although the laws of the states vary widely, ones real property or part of it may be exempt from execution, that is, it cannot be sold to satisfy your creditors. One creditor may be willing to simply reduce the debt.
His agreement does not bind him. It is the right of Texas to protect its homestead. In fact, that encourages investors to the country. Also, there is a lot of land in Texas and that seems all right. Anyway, the debtor can always assign another property or assets that the lender can take. Statutes in a great many states permit one as an insolvent person to make an assignment for the benefit of the creditors.
The lender can draw up an inventory of all his properties and turn it over to an assignee who becomes a trustee. He files a bond in an amount equal to the value of ones property and undertakes to handle the claims of ones creditors. He can assign his property to him, and he publishes a notice of the assignment so that they can file their claims with him. He then sells his property and pays his various creditors with the proceeds from the sale.
The trouble with this arrangement is that ones debts are discharged only in the amount paid to the creditors. If you owe $ 100, 000 and your trustee or assignee receives only $ 75. 000 on the sale of your property, your creditors are only going to receive $ 75, 000 less your assignees expenses. You still owe at least $ 25, 000. The assignment for the benefit of creditors, therefore, is much less advantageous to you than bankruptcy. Texas remains to be the most liberal states. Yet the Texas debtor is allowed a certain portion of personal property exempt from any attachment.
The aggregate amount, which is allowed the debtor, is determined based on the debtors status (Texas Personal Property Exemptions: The Property They Cant Take). I am of the opinion of the Texas homestead exemption. I believe that it is always right to extend a debtor with the right to make a fresh start. There just needs to be a check about the intention to pay the creditors.
Perhaps the officials can check on those people who try to hide under the protection of Texas. Congress has established a carefully spelled-out procedure for you to follow. The United States courts are there to help you. The bankruptcy courts are not overcrowded. The costs of bankruptcy are easy to find out and are much less than the costs of most litigation. One might say that bankruptcy is a form of legal surgery, to be used only when necessary.
It is far from pleasant, because you are required to disclose your whole financial picture to public view, but it is widely used and very successful. Perhaps, 200, 000 petitions in bankruptcy are filed each year, the great majority if them voluntary. If you feel that bankruptcy might be the answer to a personal financial dilemma, obtain the advice of an experienced lawyer and cooperate with him. Your greatest loss may be your pride. But that loss is a small price to pay for a discharge from the burden of most of your debts and an opportunity for a completely new financial beginning. Anyway, there is a Uniform Fraudulent Transfer Act that makes sure that the debtor is not tempted to hide property before declaring bankruptcy.
This is done by the rule that any transfer of the debtors assets made within 90 days of filing bankruptcy or within a year is given to a business associate or relative is examined by the bankruptcy court (Texas Bankruptcy Laws). If you fall on really hard times and find that you cant pay your bills as they come due, you are said to be insolvent. What you should do depends on how serious your situation is. Not all creditors behave the same way. Their action in most cases will depend on your previous record of paying your bills, and, especially with small creditors, on their knowledge of your particular situation and of much business they can expect from you in the future.
Anyway, almost all creditors will be willing to wait for their money, as an alternative to suing. REFERENCES Texas Personal Property Exemptions: The Property They Cant Take. Accessed 3 August 2006 at: web United States Bankruptcy Court. Accessed 3 August 2006 at: web Texas bankruptcy lawyers specializing in debt protection and consolidation. Accessed 3 August 2006 at: web Texas Bankruptcy Laws. Accessed 3 August 2006 at: web
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Research essay sample on Personal Property Texas Law
