TLC Law, PLLC

The point of filing for bankruptcy is to give you time to get your sh** together and start clean. However, not all debts can be discharged. Further, you might want to keep some debt, as explained below. Secured debts Secured debts are debts with an asset, such as a home or car, as collateral. Your mortgage is a secured debt, as is your car note. As part of Chapter 7 (and to some extent Chapter 13) bankruptcy, assets subject to a secured debt are subject to forfeiture and sale. The proceeds of the sale will go to the secured creditors. When the bankruptcy concludes, your secured debt is discharged. But, in some circumstances, you might want to keep the secured debt. Why on earth would you want to keep debt and not have it discharged? Because keeping that debt will ensure you have the underlying property, your house or car for instance. This is a tricky choice to make and one that is not always available (see our blog post on exemptions for more info). But, when the law permits it, s...

You might know that bankruptcy is a federal construct, handled in federal courts and governed by federal law. But you might not realize how much state laws can influence a chapter 7 bankruptcy . State law has a crucial role to play in terms of property; namely, the states have come to various conclusions regarding which property you can exempt from the claims of creditors and which property you cannot. What is so important about these “exemptions.” Exemptions are pretty powerful. Think of it this way. In a Chapter 7, you have what is called the bankruptcy estate, which includes assets such as: your house, guns, vehicles, computer, cash etc. that you own as of the date of the filing of the bankruptcy petition . Without an exemption all of these things could be surrendered to the government to pay your creditors. Exemptions are your shield protecting certain categories of assets from being surrendered. Texas allows its debtors to choose between either the federal or the state exemption...