Once you become involved in a bankruptcy there are all kinds of terms that you are going to hear. One of the first category of terms involves the different types of bankruptcies that may be available to you to apply for.
You may hear the term straight bankruptcy. What this refers to is the Chapter 7 bankruptcy which is sometimes called the no asset bankruptcy. In most cases this is the easiest form of bankruptcy to go through because there are no assets normally involved, and if there are these are common assets such as a home and vehicle. In many cases these are assets that have been secured by collateral. Which means that the lender has some sort of collateral in place, in the event that you do not pay on the loan for that asset. For example, for your vehicle the lender may be able to repossess your vehicle if you do not pay for it and this is classed as the collateral.
During a bankruptcy you are assigned a trustee and it is the trustee’s responsibility to see how much money can be paid to creditors that qualify. Most often items that have collateral on them in a Chapter 7 bankruptcy are considered underwater, which means that the trustee would not be interested in forcing of the sale of the properties so the creditors could be paid.
Each type of bankruptcy there is, there are certain qualification rules which you have to meet. By choosing a good Houston bankruptcy attorney you will have all of the advice that you need to not only choose which bankruptcy you can qualify for but also to help you through the entire bankruptcy proceedings.