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Texas Bankruptcy Laws
For the purpose of filing under Texas bankruptcy laws, property is considered to be of two general classes: real
estate and personal property. Within the RE class, sub-classification is based upon "homestead" status
according to technical rules. Personal items
are sub-classified by the state legislature's opinion of necessity
subject to specific value
limitations. If equity owned is above the statutory limit, by a significant amount, trustees
ordinarily require
forfeiture of personal property.
According to Texas bankruptcy laws, the retention of all property depends on the chapter
selected. Chapter 7
requires strict compliance with various statutory rules & values. Chapter 13
contains a less direct
approach, creating, as a condition for confirmation of the plan, that the court
verify creditors receive at least as
favorable treatment under the plan as would be available if filing Chapter 7. Most valid liens
survive despite filing. Creditors may foreclose liens (with court approval) in the event of non-payment
in both Ch. 7 and 13 plans. In addition to purchase money security interests, other
liens may be created by operation of law to protect payment of child support, taxes, and emergency
hospital treatments. These statutory liens also remain largely unaffected.
Texas Bankruptcy Laws - Homesteads and Other Real
Property
Texas bankruptcy laws determine a debtor's right, title, and interest in
land. Homes used as a primary residence receive greater
protection, while secondary homes, invest property, and non-possessory
land interests are subject to
forfeiture. For more information regarding TX homestead laws, see: definition,
exempt from seizure, and exceptions.
Texas Bankruptcy Laws - Personal Property and Benefits
All assets owned must be disclosed in schedules filed, to the trustee,
and to the court. The definition of property ownership is construed broadly,
and include not only traditional assets, but also includes a wide
variety of intangible, contingent and mixed property rights. For
instance, legal rights, contract benefits in the future,
potential claims and litigation, and legal entitlements may all represent bona fide value and must be
disclosed. Only specific property may be retained according to Texas bankruptcy
laws, including:
Creditors are subject to Texas bankruptcy laws restricting
permissible collections. If the Texas
bankruptcy court lifts
an automatic stay, and permits a specific creditor to seize or liquidate property subject to a
valid lien, creditors
must also obey all state law limitations on collection practices. For more information
about permissible collections, see
legal assistance for debtors.
Also, Texas bankruptcy laws provide extensive regulation and prohibitions against
fraudulent conversions used to create exempt property
during the year before filing.
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