The word "equity" is used in several professions and has several different meanings. In law, "equity" generally means fashioning a result that makes thing right. In other professions, such as economics, equity equates to what is fair. Even in the financial world, equity has numerous, district meanings.
When filing for Bankruptcy, you will need to determine the "equity" in your secured property, which is fairly simple to accomplish. In this context, "equity" means the difference between the fair market value of your property and the amount of claims against it. For example, if your car is worth $5,000, and your auto loan balance is $3,000, then you have $2,000 in vehicle equity.
Equity is important during a Bankruptcy case, because the Bankruptcy Code allows you to keep (or "exempt") certain property items -- up to a certain amount. Once you calculate your equity in the subject property, you can apply legal exemptions to the equity and protect the asset from your Bankruptcy Trustee or creditors.
Most debtors in Bankruptcy can protect all of their equity using legal exemptions. In Texas, you can utilize the State exemptions or Federal exemptions. These exemptions help protect your property during the
Bankruptcy process. If your equity is not protected by an exemption, the Trustee will determine whether the amount of non-exempt equity will actually benefit creditors and whether it's worth pursuing. In most cases, the Bankruptcy Trustee will not pursue or liquidate your property, as most property is exempt. Statistically, it occurs in 1 out of 25 filed cases.
When filing a consumer Bankruptcy, it is critical to properly calculate the amount of equity in your property. My office can assist you during this important process. Please call theLaw Office of Nicholas R. Westbrook at
(713) 893-6204 to schedule a free consultation. During your appointment, I can review your financial situation and explain your options. We have convenient offices in Houston and the surrounding areas. The road to financial freedom starts here.
Houston Bankruptcy Help - Law Office Of Nicholas R. Westbrook
3730 Kirby Drive #1200, Houston, TX 77098
(713) 893-6204