Not all bankruptcy laws are created equal. While the United States Bankruptcy code is a federal law, the federal government grants each of the 50 states the ability to deviate from the code with its own set of laws. Therefore, bankruptcy laws vary from state to state on a limited basis. Specific, these laws revolved around the issues of exempt assets in bankruptcy proceedings. In Texas, the state allows bankruptcy filers the option to choose from the state or federal government's list of exemption laws. The following are the top 10 exemption bankruptcy laws.
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In the state of Texas, there is a personal property exemption cap when filing for bankruptcy. This cap is determined based on the debtor's financial status. Single adults who are not members of a family are entitled to his or her property with a fair market value of no more than $30,000. This law is exclusive of liens. For adults who are members of a family, this cap increases to $60,000 but still is exclusive of liens. There are several categories from which the property owner can allocate his or her exemption cap these categories include home furnishings, food, farm vehicles, ranch vehicles, clothing, athletic equipment, motor vehicles, farm animals, pets, life insurance, and current wages. In the event the debtor has yet to receive personal services commissions, only 25 percent of the commission can go toward the allocation cap. In the event the debtor has jewelry, only 25 percent of the commission can go toward the allocation cap. Self-employed individuals do not qualify for the current wages exemption. These debtors are considered independent contractors are subject to the personal services exemption as explained in law number three. Personal wages for employed individuals who do not work for themselves are completely exempt in Texas. A limited protection Texas bankruptcy law protects the debtor from a writ of garnishment against any employer of the debtor. Additionally, the bankruptcy court cannot order an employer to relinquish the employee's paychecks, retirement, or other similar assets to the court. However, once these assets are handed over to the employee/debtor, they are subject to the Texas bankruptcy laws. Any health aids prescribed for the debtor, debtor's spouse, or debtor's dependents are exempt from the bankruptcy regardless of the item's value. The debtor enjoys unlimited exemptions when it comes to insurance benefits. This law includes any insurance policy in which the debtor is listed as the beneficiary. A debtor who serves in the U.S. military may enjoy additional property exemptions if the court determines the debt is "materially affected by reason of military service." Any court stay ruled under this law is good for the length of the debtor's military service plus three months.
Filing for bankruptcy protection in Texas is a serious personal and financial decision. Before filing any paperwork, speak with an attorney who can best explain all the Texas bankruptcy laws and how you can benefit from them. Failing to do so can end up costing you significantly more in the long run.
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