“New” Houston bankruptcy laws

“New” Houston bankruptcy laws

Before filing any case of bankruptcy, it’s vital that the legal rights are understood properly. The bankruptcy rules or laws help by protecting the possible financial ruin that companies and businessmen suffer and also protect them from the abusing of the creditors. The law helps in the consumers and the businesses to obtain the liquidation. By this law the personal assets and the business assets are protected.

In the case of liquidation the debtor’s debts will be nearly discharged by the courts. On the other hand to protect the person’s asset a plan of structured repayment is provided. The new law has been made just to reduce the increased number of bankruptcy filings that are fraudulent. The way to achieve this is by making the applying process more difficult for the above average income people for bankruptcy.

This is done by giving a high value to collateral that includes cars, houses, and other items, which ultimately inflates the debtor asset’s overall value. The credits are to be paid more if the worth of the debtor is more. There are also strict residency needs and requirements so that the filers could be prevented to moving into a state that is more lenient on bankruptcy laws.

There are certain limits in between the elapsing of filings. The old law has no time limits in between cases chapter 7 and chapter 13, but the new law forces the debtor for an eight year gap in between chapter 7 cases. For four years between the chapter 7 and 13 cases. Two years for chapter 13 cases. Thus the new bankruptcy laws are put forth in the best possible manner and to avoid controversial circumstances.