Blogs
A reader of our blog asked a very good question regarding guarantees and our post regarding the use of bankruptcy to terminate commercial leases. Our response is below.
Our blog can be found at http://shenwick.blogspot.com/ and the post titled Commercial leases in New York City, COVID-19, Recent Protests and a Strategy to End or Terminate Commercial Leases, dated SUNDAY, JULY 12, 2020 can be found at https://shenwick.blogspot.com/2020/07/commercial-leases-in-new-york-city....
First, if a commercial lease has a guarantee, terminating the lease without addressing the underlined guarantee, is of no value to the commercial tenant.
Second, there are two types of guarantees with respect to commercial leases, there is a general guarantee (“Guarantee” ) which generally requires that the principal of the tenant guarantee the payment of base rent, additional rent and the performance of any requirements under the lease by the tenant.
Third, the second type of guarantee is known as a Good Guy Guarantee (“GGG”), which requires the principal of the tenant to pay rent or additional rent until the tenant vacates the space, returns the keys to the landlord and leaves the space in a broom clean condition. Many GGG have a term limit, in which the good guy guarantee expires after a certain number of years, such as 2 to 3 years if there is no default under the lease.
Fourth, after being retained to terminate a commercial lease with a guarantee, we request a copy of the guarantee and review its terms to determine if it is a guarantee, a GGG or a guarantee that has terminated for some reason such as time.
Fifth, we then ask for financial statements from the guarantor, including a balance sheet and income statement.
Sixth, we then engage in asset protection planning for the guarantor to make it more difficult for the landlord to obtain possession of the guarantor's assets if there is a default under the lease or no settlement with the landlord.
Seventh, we then begin negotiations with the landlord, providing the landlord with the pro forma bankruptcy petition for the tenant and financial information regarding the guarantor. Often times we will also prepare a pro-forma bankruptcy petition for the guarantor, although a bankruptcy filing by the guarantor is always a last resort.
Eighth, we aim to convince the landlord that by doing a workout and releasing the tenant and the guarantor, the landlord will regain possession of its premises sooner, the landlord will save on landlord tenant and bankruptcy legal fees. The exercise is similar to that which we do when there is no guarantor, but with a guarantor there is another degree of difficulty or complexity, which is not insurmountable. Additionally, based on the time value of money, a dollar paid to the landlord today has greater value than the landlord being paid over three years and a bankruptcy filing by the guarantor.
Ninth, if we are unable to do a work out with the landlord, then the tenant can file a Chapter 7 bankruptcy and the guarantor can file either a chapter 7 bankruptcy ( liquidation) or Chapter 13 bankruptcy where the landlord will be paid back over three to five years or a Subchapter V Chapter 11 bankruptcy for the guarantor (the landlord would be paid over 3 years).
While we cannot guarantee success, we have used these strategies successfully in the past and for the right tenant and guarantor they are a very effective way to terminate a commercial lease. Jim Shenwick 212 541 6224 [email protected]
IRS Means Never Having to Say….Anything The IRS is not like most creditors. (Your probably knew that.) The IRS in bankruptcy is not like most creditors in bankruptcy, either. Knowing what debts have been cleared (discharged) by your bankruptcy is easy for most debts. For credit cards, loans (including payday loans, who want you to […]
The post IRS Means Never Having to Say…. by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.
IRS Means Never Having to Say….Anything The IRS is not like most creditors. (Your probably knew that.) The IRS in bankruptcy is not like most creditors in bankruptcy, either. Knowing what debts have been cleared (discharged) by your bankruptcy is easy for most debts. For credit cards, loans (including payday loans, who want you to […]
The post IRS Means Never Having to Say…. by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.
This story Cancel Student Loans In Bankruptcy? You May Not Qualify Forbes July 16, 2020 originally appeared
https://www.forbes.com/sites/zackfriedman/2020/07/16/student-loans-bankr...
-------
Cancel Student Loans In Bankruptcy? You May Not Qualify
Zack Friedman
Can you discharge your student loans in bankruptcy? A new proposal says yes, but not everyone qualifies.
Here’s what you need to know.
Student Loans
Rep. Mary Gay Scanlon (D -PA) introduced new legislation today that would make it easier for you to discharge student loans in bankruptcy if you are struggling financially and have been impacted by Covid-19. Here’s the good news: the COVID-19 Student 5 Loan Relief Act of 2020 would apply to both private student loans and federal student loans, and be available to all Americans impacted by Covid-19.
Discharge student loans: the fine print
Now, here’s the fine print: you may not qualify to discharge your student loans in bankruptcy under this proposal. According to the bill, to qualify:
your income has been reduced due to the Covid-19 pandemic; or
the primary income earner in your family died; or
you have become permanently disabled
Most Popular In: Personal Finance
Second Stimulus Check Income Limit Will Likely Be Higher Than $40,000
New Stimulus Package May Be Introduced Next Week
Proposal: Discharge Student Loans For Those Harmed By Pandemic And Recession
Now, lets’ break down the first requirement based on the language on the bill. The legislation requires a reduction in income due to Covid-19. What does this mean? Here’s what the bill says. It’s not enough that your income simply declined. Specifically, to qualify to discharge your student loans in bankruptcy
If you make less than this pre-tax income...your income must decline by at least this percentage...
< $75,000 Income: at least 20% decline
$75,000 - $125,000 Income: at least 30% decline
$125,000+ Income: at least 40% decline
Plus, the relevant time period is “beginning January 21, 2020 and extending until 60 days after the duration of the Covid-19 emergency or the duration of the Covid-19 outbreak or as a result of the COVID-19 outbreak.” Even if you wouldn’t qualify under this specific proposal, you still may be able to discharge your student loans in bankruptcy through the normal course based on your financial situation. Traditionally, unlike mortgages or credit card debt, student loans cannot be discharged in bankruptcy. There are exceptions, however, namely if certain conditions regarding financial hardship are met.
Cancel student loan debt
This latest bankruptcy legislation is part of an ongoing effort to provide more student loan relief, particularly as as result of Covid-19. For example, Student Debt Crisis, a leading student loan advocacy not-profit, recently sent Sen. Elizabeth Warren (D-MA) a petition for student loan forgiveness with 1.2 million signatures. Warren, who proposed student loan forgiveness for 95% of Americans, has been a proponent of student loan forgiveness and student loan debt cancellation. Scanlon’s legislation would make it easier by amending Chapter 11 of the U.S. Bankruptcy Code, although the requirements to qualify may be challenging for some. Student loan forgiveness has been a hot topic in Congress, particularly in the wake of the Covid-19 pandemic. For example, former Vice President Joe Biden reiterated his support for student loan forgiveness and his support to discharge student loans in bankruptcy. Other members of Congress have proposed legislation to forgive student loans, although none have become law.
Will student loans be included in the new stimulus?
Maybe. It’s unlikely that this bill or a similar bill to discharge student loans in bankruptcy will be included in the new stimulus. The new stimulus package may be introduced next week. Currently, the focus includes second stimulus checks, state and local aid, unemployment benefits or a return-to-work bonus and liability protection due to Covid-19 for businesses. However, don’t expect student loan forgiveness to be included. However, Congress may extend student loan relief under the Cares Act, or Congress could allow the student loan relief to expire as planned on September 30, 2020. That said, student loans have not been the focus among Republicans (who control the Senate) among other high priority issues. There is bipartisan support to make student loans dischargeable in bankruptcy, but there may not be consensus to act until after the election in the next Congress.
This post appeared in the New York Times on 7/17/20
https://www.nytimes.com/2020/07/17/business/dealbook/bankruptcy-filings-...
--------
The Eye of the Bankruptcy Storm
Chesapeake Energy was among the companies to file for bankruptcy protection in recent weeks.Credit...Brett Carlsen/Reuters
July 17, 2020Updated 7:28 a.m. ET
Want this delivered to your inbox each day? Sign up here.
The pendulum swings back toward fear
As the pandemic persists, more and more companies have filed for bankruptcy protection, following in the footsteps of Hertz, J. Crew and Neiman Marcus. But financial restructuring advisers — the bankers and lawyers who help troubled companies repair their balance sheets or slog through Chapter 11 — say that they expect filings to accelerate. If anything, we’re now in the lull before the storm.
About 3,600 companies filed for Chapter 11 in the first half of 2020, more than any year since 2012, according to the American Bankruptcy Institute. The past few weeks have brought filings by the fracking pioneer Chesapeake Energy, the Japanese home goods company Muji USA and the retailer New York & Company.
Image
But cases dropped last month. Why? Advisers cited the federal government’s programs for stabilizing the economy and credit markets, as well as efforts by companies to bolster their cash by drawing down their credit lines and issuing new bonds. (Businesses worldwide have sold $2.1 trillion worth of bonds so far this year, up 50 percent from the year before.) Earlier-than-expected reopenings have bolstered some businesses’ performance, allowing them to bring in some sales — critical to servicing their debts.
Yet as coronavirus cases surge again, an uptick in filings may follow. The rise in infections brings the prospect of renewed lockdowns and shakes consumer confidence, testing companies’ abilities to survive another spell of little to no revenue. “We’re starting to see the pendulum swing back toward fear again,” William Hardie, a managing director in Houlihan Lokey’s financial restructuring group, told DealBook’s Michael de la Merced.
And what comes next could be ugly. Many companies that saved themselves by borrowing more money are now in a bind: They have mortgaged nearly all their available assets, leaving little wiggle room.
• Creditors are willing to give companies concessions on existing debt covenants — especially since they don’t want to recognize any of their loans as impaired, hurting their own balance sheets — but if borrowers need more money, they may find lenders are unwilling or unable to front the cash.
Where to expect the next wave: While retailers and energy companies have dominated the first wave, restructuring experts say the next round of filings could hit the travel industry hard, including airlines, hotels and firms that lease planes to carriers.
More companies will be taken over by lenders, who will convert their loans into equity. So far, advisers say, talks between debtors and creditors have been sanguine, with relatively few of the disagreements that often complicate Chapter 11 cases. “There’s no finger-pointing,” Mr. Hardie said. “Everyone realizes this is no one’s fault.”
ImageThe C.D.C. has extended a ban on cruise ships until Sept. 30.Credit...Alexandre Meneghini/Reuters
Deciding on whether or not you should file for bankruptcy is a tough call. Some may even tell you to declare bankruptcy only as a last resort. But before giving in to the stigma, consider all possible angles in approaching your financial issues.
The main reason why bankruptcy laws were even created was to provide debtors a chance at a fresh start. Unlike what most people think, bankruptcy is not a punishment for borrowers who were unable to handle their financial resources. In fact, the top reasons why bankruptcy declarations are considered by families is the loss of income and huge medical debt.
Factors Leading to A Bankruptcy Filing
If you find yourself in any of the scenarios described below, then you should think about filing for bankruptcy as one of your legal options.
- Sudden medical conditions. If you have an injury or health problem, it can be difficult or even impossible to perform any gainful activity. On top of that, you’ll have to worry about health expenses piling up due to your illness. If you file bankruptcy, you get a chance at discharging those medical bills as ordered by the bankruptcy judge.
- The threat of property foreclosure. The possibility of losing your home is scary. But if you consider filing Chapter 7 bankruptcy, you can temporarily stop foreclosure and even have unpaid mortgages discharged, or possibly keep your home permanently if you’re eligible for a Chapter 13 bankruptcy filing.
- Creditor harassment. If your lenders demand payments night and day and threaten to seize your most valued assets, then bankruptcy can give you the good night’s rest you wanted. How, you might ask? Through an “automatic stay”, which is an order issued by the bankruptcy court that requires all your creditors to stop collecting anything from you.
- Living on credit card payments. If you can afford food, medicine, clothing, and shelter only by maxing out your credit limit, or if you can only pay outstanding credit loans using another credit card, then declaring bankruptcy gives you a second chance with the possibility of wiping nonsecured credit card debts.
If you find yourself in any of the situations above, you’re a good candidate for a bankruptcy case. Before proceeding, ask yourself these questions: Is it possible to negotiate a reduction of the loan amount? Can I expect my financial status to improve anytime soon? Are there other sources of debt payments I haven’t considered? If you answered YES to most of these questions, then it might still be possible to take control of your situation. However, if your issues have been a major source of stress, then talking to a lawyer experienced in bankruptcy, such as those from Northwest Debt Relief Law Firm should be considered.
There are plenty of debt relief solutions to choose from, such as but not limited to filing bankruptcy, reaching out to an agency offering free credit counseling, considering debt consolidation or debt settlement, or researching debt management programs. Regardless of which direction you take, it is highly recommended to get advice from a legal representative who has worked with bankruptcy filings in the past.
How Northwest Debt Relief Law Firm Can Help
During a consultation with our bankruptcy lawyer, you will be guided in choosing the right type of bankruptcy to file, which are called Chapters. One popular option for personal bankruptcies is Chapter 7. This is intended for filers who are unable to pay loans due to a low income (defined as earning less than the median income in your State) and wipes out credit card debt, medical bills, lawsuits, lease obligations, and personal loans. For those with higher income, filing Chapter 7 can be done by passing a “means test” conducted by the court trustee through an examination of income sources and expenses.
If you do have a constant source of income, your lawyer may advise you to file a Chapter 13 bankruptcy, also called the “wage earner’s bankruptcy”. It gives you an opportunity to tweak the details of your current loan agreements and extend payments under a new repayment plan. If you are facing the possibility of foreclosure, it can also save your home. However, keep in mind that not all debts get discharged. Your student loan, unpaid child support or alimony, and taxes due will remain in your file.
Your bankruptcy attorney will also discuss with you what happens once your bankruptcy case is closed. This will cover your concerns about your credit score, credit report, future property purchases, making payments for non-exempt assets, and facing secured debtors. Though a bankruptcy option appears challenging, remember that its ultimate goal is to give you relief from your debts. Start your journey towards this goal by calling a law firm specializing in bankruptcy law such as the Northwest Debt Relief Law Firm. Schedule your free consultation with our bankruptcy attorneys and get a grip on your financial future.
.fusion-fullwidth.fusion-builder-row-1 a:not(.fusion-button):not(.fusion-builder-module-control):not(.fusion-social-network-icon):not(.fb-icon-element):not(.fusion-countdown-link):not(.fusion-rollover-link):not(.fusion-rollover-gallery):not(.fusion-button-bar):not(.add_to_cart_button):not(.show_details_button):not(.product_type_external):not(.fusion-quick-view):not(.fusion-rollover-title-link):not(.fusion-breadcrumb-link) , .fusion-fullwidth.fusion-builder-row-1 a:not(.fusion-button):not(.fusion-builder-module-control):not(.fusion-social-network-icon):not(.fb-icon-element):not(.fusion-countdown-link):not(.fusion-rollover-link):not(.fusion-rollover-gallery):not(.fusion-button-bar):not(.add_to_cart_button):not(.show_details_button):not(.product_type_external):not(.fusion-quick-view):not(.fusion-rollover-title-link):not(.fusion-breadcrumb-link):before, .fusion-fullwidth.fusion-builder-row-1 a:not(.fusion-button):not(.fusion-builder-module-control):not(.fusion-social-network-icon):not(.fb-icon-element):not(.fusion-countdown-link):not(.fusion-rollover-link):not(.fusion-rollover-gallery):not(.fusion-button-bar):not(.add_to_cart_button):not(.show_details_button):not(.product_type_external):not(.fusion-quick-view):not(.fusion-rollover-title-link):not(.fusion-breadcrumb-link):after {color: #f25000;}.fusion-fullwidth.fusion-builder-row-1 a:not(.fusion-button):not(.fusion-builder-module-control):not(.fusion-social-network-icon):not(.fb-icon-element):not(.fusion-countdown-link):not(.fusion-rollover-link):not(.fusion-rollover-gallery):not(.fusion-button-bar):not(.add_to_cart_button):not(.show_details_button):not(.product_type_external):not(.fusion-quick-view):not(.fusion-rollover-title-link):not(.fusion-breadcrumb-link):hover, .fusion-fullwidth.fusion-builder-row-1 a:not(.fusion-button):not(.fusion-builder-module-control):not(.fusion-social-network-icon):not(.fb-icon-element):not(.fusion-countdown-link):not(.fusion-rollover-link):not(.fusion-rollover-gallery):not(.fusion-button-bar):not(.add_to_cart_button):not(.show_details_button):not(.product_type_external):not(.fusion-quick-view):not(.fusion-rollover-title-link):not(.fusion-breadcrumb-link):hover:before, .fusion-fullwidth.fusion-builder-row-1 a:not(.fusion-button):not(.fusion-builder-module-control):not(.fusion-social-network-icon):not(.fb-icon-element):not(.fusion-countdown-link):not(.fusion-rollover-link):not(.fusion-rollover-gallery):not(.fusion-button-bar):not(.add_to_cart_button):not(.show_details_button):not(.product_type_external):not(.fusion-quick-view):not(.fusion-rollover-title-link):not(.fusion-breadcrumb-link):hover:after {color: #224882;}.fusion-fullwidth.fusion-builder-row-1 .pagination a.inactive:hover, .fusion-fullwidth.fusion-builder-row-1 .fusion-filters .fusion-filter.fusion-active a {border-color: #224882;}.fusion-fullwidth.fusion-builder-row-1 .pagination .current {border-color: #224882; background-color: #224882;}.fusion-fullwidth.fusion-builder-row-1 .fusion-filters .fusion-filter.fusion-active a, .fusion-fullwidth.fusion-builder-row-1 .fusion-date-and-formats .fusion-format-box, .fusion-fullwidth.fusion-builder-row-1 .fusion-popover, .fusion-fullwidth.fusion-builder-row-1 .tooltip-shortcode {color: #224882;}#main .fusion-fullwidth.fusion-builder-row-1 .post .blog-shortcode-post-title a:hover {color: #224882;}
The post Am I A Good Candidate for Bankruptcy? appeared first on Vancouver Bankruptcy Attorney | Northwest Debt Relief Law Firm.
Bankruptcy exemptions help debtors keep some of their property from being seized by the court. In Texas, you may file for exemptions in your homestead, personal property, personal accounts, or vehicles. If you are married, additional exemptions apply.
In bankruptcy filings, all non exempt assets are placed in a bankruptcy estate and managed by the court’s appointed trustee. Bankruptcy exemptions allow filers to keep a portion of their properties without having to think about paying off debts owed to lenders. Knowing which properties fall under bankruptcy protection depends on the filing chapter of the bankruptcy petition and the state where you filed your case.
You need to review state bankruptcy laws and check whether federal bankruptcy exemptions apply before filing bankruptcy. What is unique in Texas is that a filer may choose to apply either state or federal exemptions when they file for bankruptcy.
In Texas, you may file for exemptions in your homestead, personal property, personal accounts, or vehicles. In addition, for married couples, each may claim exemption for properties jointly owned, allowing them to double the exemption limit.
Conditions for Homestead Exemption
Under Texas exemption laws, an individual’s residence may be excluded from the bankruptcy estate if it is less than 10 acres and is situated in a city, town, or village, or if the total property area is less than 100 acres in the country. Under the same laws, families may apply for double the area limit, with homes measuring 200 acres or less being exempted.
A debtor may also choose to sell the home and liquidate his asset. In such a case, under the Texas Property Code, the exemption still applies within the first six months after it was sold.
Bankruptcy Exemptions for Motor Vehicles
Texas bankruptcy laws allow a filer to have the full value of a motor vehicle exempted from bankruptcy. Moreover, for individuals or families owning more than one vehicle, every licensed family member is entitled to have one vehicle listed for exemption.
If you have a family member owning a vehicle but has no license, you may still file for exemption as long as the vehicle is operated by a licensed third party..
Exempted Personal Properties for Individuals and Families
All assets and properties other than your real estate are considered part of your personal property.
Individuals without a family may have their personal properties exempted from the bankruptcy estate if the total asset value does not exceed $50,000. In contrast, for families, the head may file for a higher exemption limit of not more than $100,000.
Examples of personal properties which you may be filed for exemption are the following: pets, farm animals and livestock, clothing, food, home furnishings, household goods, family heirlooms, jewelries (as long as these does not make up more than 25% of exemptions), athletic or sport equipment, bicycles, firearms (not more than two), heath aids, religious books such as Bibles, and even burial plots.
A bankruptcy trustee can help you determine the value of your personal properties and help decide which can be filed for exemption.
Pensions, Retirement, and Health Savings Account Exemptions
Borrowers may also request to have their pensions and retirement accounts protected from creditors under the state bankruptcy law. Under the Texas Insurance Code, exempted accounts include the following:
- Retirement funds or accounts enjoying special tax exemptions under the U.S. Tax Code
- Retirement and pension benefits for district and county employees, municipal and state employees, elected officials, teachers, firefighters, police officers, and judges
- Survivors benefits for firefighters, law enforcement officers, and emergency medical employees
- Tax-deferred retirement benefits
- Life, health, accident, or annuity benefits
- Uniform group benefit insurance for Texas employees
- Group insurance for Texas public school employees
- Texas state college or university employee benefits.
Non Exempt Debts
Although claiming exemptions can ease your hardship and help manage your remaining finances, take note that under the Bankruptcy Code, student loans, child support owed, or unpaid alimony will not be discharged by the bankruptcy court. You still have to pay back your debt to the creditor.
Aside from going through the non-exhaustive list of exemptions above, determining which properties are exempted and which are non-exempt under Texas laws may be done by bankruptcy trustees who are appointed by the country to oversee estates. It may also be done by bankruptcy attorneys hired to litigate a case. Your lawyer will also explain to you all applicable Texas laws and provide you with much needed credit counseling.
If you need help understanding exemptions and bankruptcy filing, you may consult with a Texas bankruptcy attorney Allmand Law Firm, PLLC. Our lawyers are experienced to provide legal counsel in bankruptcy cases and will help protect your assets by maximizing the exemption laws.
Contact our law firm here and schedule your free initial consultation.
The post Bankruptcy Exemptions in Texas appeared first on Allmand Law Firm, PLLC.
Bankruptcy exemptions help debtors keep some of their property from being seized by the court. In Texas, you may file for exemptions in your homestead, personal property, personal accounts, or vehicles. If you are married, additional exemptions apply.
In bankruptcy filings, all non exempt assets are placed in a bankruptcy estate and managed by the court’s appointed trustee. Bankruptcy exemptions allow filers to keep a portion of their properties without having to think about paying off debts owed to lenders. Knowing which properties fall under bankruptcy protection depends on the filing chapter of the bankruptcy petition and the state where you filed your case.
You need to review state bankruptcy laws and check whether federal bankruptcy exemptions apply before filing bankruptcy. What is unique in Texas is that a filer may choose to apply either state or federal exemptions when they file for bankruptcy.
In Texas, you may file for exemptions in your homestead, personal property, personal accounts, or vehicles. In addition, for married couples, each may claim exemption for properties jointly owned, allowing them to double the exemption limit.
Conditions for Homestead Exemption
Under Texas exemption laws, an individual’s residence may be excluded from the bankruptcy estate if it is less than 10 acres and is situated in a city, town, or village, or if the total property area is less than 100 acres in the country. Under the same laws, families may apply for double the area limit, with homes measuring 200 acres or less being exempted.
A debtor may also choose to sell the home and liquidate his asset. In such a case, under the Texas Property Code, the exemption still applies within the first six months after it was sold.
Bankruptcy Exemptions for Motor Vehicles
Texas bankruptcy laws allow a filer to have the full value of a motor vehicle exempted from bankruptcy. Moreover, for individuals or families owning more than one vehicle, every licensed family member is entitled to have one vehicle listed for exemption.
If you have a family member owning a vehicle but has no license, you may still file for exemption as long as the vehicle is operated by a licensed third party..
Exempted Personal Properties for Individuals and Families
All assets and properties other than your real estate are considered part of your personal property.
Individuals without a family may have their personal properties exempted from the bankruptcy estate if the total asset value does not exceed $50,000. In contrast, for families, the head may file for a higher exemption limit of not more than $100,000.
Examples of personal properties which you may be filed for exemption are the following: pets, farm animals and livestock, clothing, food, home furnishings, household goods, family heirlooms, jewelries (as long as these does not make up more than 25% of exemptions), athletic or sport equipment, bicycles, firearms (not more than two), heath aids, religious books such as Bibles, and even burial plots.
A bankruptcy trustee can help you determine the value of your personal properties and help decide which can be filed for exemption.
Pensions, Retirement, and Health Savings Account Exemptions
Borrowers may also request to have their pensions and retirement accounts protected from creditors under the state bankruptcy law. Under the Texas Insurance Code, exempted accounts include the following:
- Retirement funds or accounts enjoying special tax exemptions under the U.S. Tax Code
- Retirement and pension benefits for district and county employees, municipal and state employees, elected officials, teachers, firefighters, police officers, and judges
- Survivors benefits for firefighters, law enforcement officers, and emergency medical employees
- Tax-deferred retirement benefits
- Life, health, accident, or annuity benefits
- Uniform group benefit insurance for Texas employees
- Group insurance for Texas public school employees
- Texas state college or university employee benefits.
Non Exempt Debts
Although claiming exemptions can ease your hardship and help manage your remaining finances, take note that under the Bankruptcy Code, student loans, child support owed, or unpaid alimony will not be discharged by the bankruptcy court. You still have to pay back your debt to the creditor.
Aside from going through the non-exhaustive list of exemptions above, determining which properties are exempted and which are non-exempt under Texas laws may be done by bankruptcy trustees who are appointed by the country to oversee estates. It may also be done by bankruptcy attorneys hired to litigate a case. Your lawyer will also explain to you all applicable Texas laws and provide you with much needed credit counseling.
If you need help understanding exemptions and bankruptcy filing, you may consult with a Texas bankruptcy attorney Allmand Law Firm, PLLC. Our lawyers are experienced to provide legal counsel in bankruptcy cases and will help protect your assets by maximizing the exemption laws.
Contact our law firm here and schedule your free initial consultation.
The post Bankruptcy Exemptions in Texas appeared first on Allmand Law Firm, PLLC.
Bankruptcy exemptions help debtors keep some of their property from being seized by the court. In Texas, you may file for exemptions in your homestead, personal property, personal accounts, or vehicles. If you are married, additional exemptions apply.
In bankruptcy filings, all non exempt assets are placed in a bankruptcy estate and managed by the court’s appointed trustee. Bankruptcy exemptions allow filers to keep a portion of their properties without having to think about paying off debts owed to lenders. Knowing which properties fall under bankruptcy protection depends on the filing chapter of the bankruptcy petition and the state where you filed your case.
You need to review state bankruptcy laws and check whether federal bankruptcy exemptions apply before filing bankruptcy. What is unique in Texas is that a filer may choose to apply either state or federal exemptions when they file for bankruptcy.
In Texas, you may file for exemptions in your homestead, personal property, personal accounts, or vehicles. In addition, for married couples, each may claim exemption for properties jointly owned, allowing them to double the exemption limit.
Conditions for Homestead Exemption
Under Texas exemption laws, an individual’s residence may be excluded from the bankruptcy estate if it is less than 10 acres and is situated in a city, town, or village, or if the total property area is less than 100 acres in the country. Under the same laws, families may apply for double the area limit, with homes measuring 200 acres or less being exempted.
A debtor may also choose to sell the home and liquidate his asset. In such a case, under the Texas Property Code, the exemption still applies within the first six months after it was sold.
Bankruptcy Exemptions for Motor Vehicles
Texas bankruptcy laws allow a filer to have the full value of a motor vehicle exempted from bankruptcy. Moreover, for individuals or families owning more than one vehicle, every licensed family member is entitled to have one vehicle listed for exemption.
If you have a family member owning a vehicle but has no license, you may still file for exemption as long as the vehicle is operated by a licensed third party..
Exempted Personal Properties for Individuals and Families
All assets and properties other than your real estate are considered part of your personal property.
Individuals without a family may have their personal properties exempted from the bankruptcy estate if the total asset value does not exceed $50,000. In contrast, for families, the head may file for a higher exemption limit of not more than $100,000.
Examples of personal properties which you may be filed for exemption are the following: pets, farm animals and livestock, clothing, food, home furnishings, household goods, family heirlooms, jewelries (as long as these does not make up more than 25% of exemptions), athletic or sport equipment, bicycles, firearms (not more than two), heath aids, religious books such as Bibles, and even burial plots.
A bankruptcy trustee can help you determine the value of your personal properties and help decide which can be filed for exemption.
Pensions, Retirement, and Health Savings Account Exemptions
Borrowers may also request to have their pensions and retirement accounts protected from creditors under the state bankruptcy law. Under the Texas Insurance Code, exempted accounts include the following:
- Retirement funds or accounts enjoying special tax exemptions under the U.S. Tax Code
- Retirement and pension benefits for district and county employees, municipal and state employees, elected officials, teachers, firefighters, police officers, and judges
- Survivors benefits for firefighters, law enforcement officers, and emergency medical employees
- Tax-deferred retirement benefits
- Life, health, accident, or annuity benefits
- Uniform group benefit insurance for Texas employees
- Group insurance for Texas public school employees
- Texas state college or university employee benefits.
Non Exempt Debts
Although claiming exemptions can ease your hardship and help manage your remaining finances, take note that under the Bankruptcy Code, student loans, child support owed, or unpaid alimony will not be discharged by the bankruptcy court. You still have to pay back your debt to the creditor.
Aside from going through the non-exhaustive list of exemptions above, determining which properties are exempted and which are non-exempt under Texas laws may be done by bankruptcy trustees who are appointed by the country to oversee estates. It may also be done by bankruptcy attorneys hired to litigate a case. Your lawyer will also explain to you all applicable Texas laws and provide you with much needed credit counseling.
If you need help understanding exemptions and bankruptcy filing, you may consult with a Texas bankruptcy attorney Allmand Law Firm, PLLC. Our lawyers are experienced to provide legal counsel in bankruptcy cases and will help protect your assets by maximizing the exemption laws.
Contact our law firm here and schedule your free initial consultation.
The post Bankruptcy Exemptions in Texas appeared first on Allmand Law Firm, PLLC.
Bankruptcy exemptions help debtors keep some of their property from being seized by the court. In Texas, you may file for exemptions in your homestead, personal property, personal accounts, or vehicles. If you are married, additional exemptions apply.
In bankruptcy filings, all non exempt assets are placed in a bankruptcy estate and managed by the court’s appointed trustee. Bankruptcy exemptions allow filers to keep a portion of their properties without having to think about paying off debts owed to lenders. Knowing which properties fall under bankruptcy protection depends on the filing chapter of the bankruptcy petition and the state where you filed your case.
You need to review state bankruptcy laws and check whether federal bankruptcy exemptions apply before filing bankruptcy. What is unique in Texas is that a filer may choose to apply either state or federal exemptions when they file for bankruptcy.
In Texas, you may file for exemptions in your homestead, personal property, personal accounts, or vehicles. In addition, for married couples, each may claim exemption for properties jointly owned, allowing them to double the exemption limit.
Conditions for Homestead Exemption
Under Texas exemption laws, an individual’s residence may be excluded from the bankruptcy estate if it is less than 10 acres and is situated in a city, town, or village, or if the total property area is less than 100 acres in the country. Under the same laws, families may apply for double the area limit, with homes measuring 200 acres or less being exempted.
A debtor may also choose to sell the home and liquidate his asset. In such a case, under the Texas Property Code, the exemption still applies within the first six months after it was sold.
Bankruptcy Exemptions for Motor Vehicles
Texas bankruptcy laws allow a filer to have the full value of a motor vehicle exempted from bankruptcy. Moreover, for individuals or families owning more than one vehicle, every licensed family member is entitled to have one vehicle listed for exemption.
If you have a family member owning a vehicle but has no license, you may still file for exemption as long as the vehicle is operated by a licensed third party..
Exempted Personal Properties for Individuals and Families
All assets and properties other than your real estate are considered part of your personal property.
Individuals without a family may have their personal properties exempted from the bankruptcy estate if the total asset value does not exceed $50,000. In contrast, for families, the head may file for a higher exemption limit of not more than $100,000.
Examples of personal properties which you may be filed for exemption are the following: pets, farm animals and livestock, clothing, food, home furnishings, household goods, family heirlooms, jewelries (as long as these does not make up more than 25% of exemptions), athletic or sport equipment, bicycles, firearms (not more than two), heath aids, religious books such as Bibles, and even burial plots.
A bankruptcy trustee can help you determine the value of your personal properties and help decide which can be filed for exemption.
Pensions, Retirement, and Health Savings Account Exemptions
Borrowers may also request to have their pensions and retirement accounts protected from creditors under the state bankruptcy law. Under the Texas Insurance Code, exempted accounts include the following:
- Retirement funds or accounts enjoying special tax exemptions under the U.S. Tax Code
- Retirement and pension benefits for district and county employees, municipal and state employees, elected officials, teachers, firefighters, police officers, and judges
- Survivors benefits for firefighters, law enforcement officers, and emergency medical employees
- Tax-deferred retirement benefits
- Life, health, accident, or annuity benefits
- Uniform group benefit insurance for Texas employees
- Group insurance for Texas public school employees
- Texas state college or university employee benefits.
Non Exempt Debts
Although claiming exemptions can ease your hardship and help manage your remaining finances, take note that under the Bankruptcy Code, student loans, child support owed, or unpaid alimony will not be discharged by the bankruptcy court. You still have to pay back your debt to the creditor.
Aside from going through the non-exhaustive list of exemptions above, determining which properties are exempted and which are non-exempt under Texas laws may be done by bankruptcy trustees who are appointed by the country to oversee estates. It may also be done by bankruptcy attorneys hired to litigate a case. Your lawyer will also explain to you all applicable Texas laws and provide you with much needed credit counseling.
If you need help understanding exemptions and bankruptcy filing, you may consult with a Texas bankruptcy attorney Allmand Law Firm, PLLC. Our lawyers are experienced to provide legal counsel in bankruptcy cases and will help protect your assets by maximizing the exemption laws.
Contact our law firm here and schedule your free initial consultation.
The post Bankruptcy Exemptions in Texas appeared first on Allmand Law Firm, PLLC.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.