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Dallas Bankruptcy Attorney
Special Note:
*As a result of the new bankruptcy law, Michael Wald is not offering bankruptcy advice to debtors at this time.
When a person can no longer afford to pay his or her debts, bankruptcy is frequently an option. There are several different types of bankruptcies. In a Chapter 7 bankruptcy, the person's debts are wiped out. That is to say, the person no longer has to pay those debts. In any type of bankruptcy, a client is allowed to keep all of his or her exempt property. A client gets to choose between the exemptions provided by federal law or the exemptions provided by state law. Generally speaking, in Texas the exemptions provided by state law are greater, and, therefore, Texas exemptions are chosen. These exemptions allow a client to retain their house, a car for both husband and wife, all tools of the trade, $30,000.00 per person, a bible, various farm animals, and other miscellaneous personal property. In addition, all "qualified" retirement plans are exempt and not required to be paid out to those to whom money is owed. Qualified retirement plans include, for example, 401(k)'s and individual retirement accounts, or IRA's.
If a client has property in excess of the exempt property, it is divided among those people to whom money is owed on a pro rata basis. Various classes of creditors are allowed, and each class can have a different distribution of the remaining assets.
In a Chapter 13 or Wage Earner Plan type of bankruptcy, the client achieves something similar to a debt consolidation. The client is given a period of up to 5 years to take a portion of their wages and use them towards paying as much of their debt as approved by the court in a plan that they propose to and must be approved by the judge. At the end of the 60 months, any remaining debt is wiped out.
Businesses can also do a Chapter 11 bankruptcy, which is similar to a Chapter 13 bankruptcy for an individual except that they are characterized by what is called the "debtor in possession." That is to say that there is no Trustee that takes over the client's finances and bill payments as there are in Chapter 7 and Chapter 13 bankruptcies. Instead, the business presents a plan that is approved by the judge and then the business itself is in charge of executing the plan.
Michael Wald handles Chapter 7 and Chapter 11 bankruptcies on a regular basis and would be glad to assist anybody who needs one or counsel anybody considering one.
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