It is safe to say that most individuals file for Chapter 7 bankruptcy (or Chapter 13) after exhausting all other debt relief options. You may feel better when taking these first steps, but you still have responsibilities.
A trustee will be assigned to represent your bankruptcy estate and work with the bankruptcy court throughout your case. Under the Texas bankruptcy code, filers must communicate with their trustee when necessary, or it could compromise the bankruptcy.
What do you have to report?
Most of the interactions with trustees occur before and during legal procedures, but sometimes additional communication is needed. You will want to report any significant financial issues (losses or gains) to your trustee.
The following examples can help you understand when to communicate after your case is underway:
- If you receive or expect to receive more than $2,500 in tax refunds
- If you remember or learn that you own property not included in the bankruptcy
- If you receive property or money (divorce decree, life insurance, inheritance, etc.) within six months of filing
Further, if you receive money from rental properties (unless they are exempt), you must turn it over to the trustee. The law mandates that all reports to your trustee must be in writing.
Although filing and completing a bankruptcy is usually not as difficult as people believe, it is still a complex legal process that benefits from guidance. Even a seemingly small error or omission could result in a dismissal of your bankruptcy. As you might expect, this could turn an already troubled situation into a nightmare.
Learn more about bankruptcy procedures laws in your region of Texas to avoid making potentially costly mistakes.