Chapter 7 Bankruptcy Process Many articles feature the pros and cons of chapter 7 bankruptcy in Texas, its exemptions or the duration of chapter 7 bankruptcy but fail to highlight the process of bankruptcy. To give advice on the bankruptcy process a spokesperson from Busby & Associates gave comments on the subject. Before anything is done in respect of paperwork what is required of the person who is filing for chapter 7 bankruptcy? The spokesperson responded, “each consumer or small business owner before filing chapter 7 bankruptcy in Texas is required in accordance to the 2005 Bankruptcy Act to go for credit counselling. This counseling must take place within six month before filing for bankruptcy. The credit counselling looks at a budget analysis of the person’s financial situation. The counselling is conducted by a non-profit company”. When asked if there were other requirements before the filing, the spokesperson responded that there was a means test that had to be conducted. “The means test analyses an individual’s income and expenses to see if they qualify for filing under chapter 7 or chapter 13 bankruptcy. The court looks at the average income for the six months leading to the filing and compares it with the median income for Texas. The median income for Texas is an average of income for the state of Texas. If the income is below the median income for Texas, the person filing can proceed in filing under chapter 7. However, if they exceed the Texas median then the rest of the means test will determine whether they are eligible to file under chapter 7 or if they should file under chapter 13 bankruptcy”. He further clarified that the means test basically established one’s eligibility for either chapter 7 or chapter 13 bankruptcy. The process thereafter would be gathering paperwork. The Busby & Associates spokesperson listed the following as necessary to be included in the filing documents. Itemizing ones: Current income sources Major financial transactions in the last two years Monthly living expenses Secured and unsecured debts Property – this included real estate and all assets and possessions
He further pointed out that the collection of tax returns for the past two years was necessary as well as deeds to real estate, car titles and documents for any loans taken. Thereafter, the person would be ready to file bankruptcy. There would be need to determine which property is exempt as per Texas exemptions. A two page petition and other forms would need to be filed; “these forms basically ask the individual to describe their current financial status and recent financial transactions. But, if creditors or the judge feel that the individual has not been totally honest or forthcoming regarding their bankruptcy filing, this will negatively impact the person’s petition”. At the end of the process, the individual is required to complete a financial management instructional course. About the company: Busby & Associates are a law firm of attorneys with a renowned track record of filing four thousand bankruptcies in thirteen years. For more information follow the link on Busby-Lee. Contact Information: Address:
Busby & Associates 2909 Hillcroft Suite 350 Houston Texas 77057
Toll Free:
1-800-DIVORCE
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