The specifics of the circumstances that bring an individual or a corporate enterprise to the point of weighing the option of pursuing bankruptcy protection vary dramatically. Some people spend themselves deeply into the red because they gained easy access to credit. Others who have lived within their means struggle to keep up with financial obligations when a fickle economy leaves them abruptly and unexpectedly unemployed. For businesses, the potential pitfalls seem almost limitless. Overspending on labor, infrastructure, and marketing can undercut an otherwise successful enterprise, and a shift in consumer preference can leave an established company in the dust.
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Regardless of the contributing factors, the parties seeking bankruptcy protection are united by a strong desire to bring the stressful tribulations of financial insolvency to a legal and satisfactory close. For businesses, the mechanisms available to accomplish this offer two distinct models; in the first form a company must liquidate its assets, shut its doors, and use the proceeds from the sale of those items to satisfy creditors; in the second form it can reorganize the corporate structure and negotiate modified repayment plans with creditors.
Why Exemptions
The paths for individuals and families are similar to those for companies, in large part, but there are concerns that are not shared. The foremost example of this being that a corporate entity that fails does not have any ongoing needs upon closure, whereas a private debtor and his or her family must be able to meet living expenses and is likely to have emotional attachments to a number of items. As a concession to those needs, both federal and Texas bankruptcy law offer an exemption scheme that prevents specified possessions from being seized and/or sold to satisfy amounts due to creditors.
Some Texas Bankruptcy Exemptions
Debtors who file for bankruptcy in Texas have the option to choose whether they wish to utilize the federal exemption scheme or instead to use that available to them under Texas law. Determining which alternative is best can be difficult without the assistance of a skilled and experienced bankruptcy attorney, so it is wise to consult with legal counsel on the matter. Some of the exemptions under Texas law are:
1 acre homestead in town 100 acres (for individual) 200 (for families) outside incorporated areas 2 firearms 1 vehicle per member of the family with a driver's license Pension funds Home furnishings and family heirlooms (with a fixed dollar amount)
For More Information
For more information about the potential benefits of a bankruptcy filing in your unique situation, there is no substitute for consulting with the experienced Galveston County bankruptcy lawyers of Gipson & Norman.
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