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Farmer files Chapter 7 bankruptcy in Texas to stop sale of assets

One of the worst hit sectors by the recent recession was the agriculture industry. The farming business can be difficult during these times since it was an already unpredictable field to begin with. Unfortunately, farmers are susceptible to changes in climate and other circumstances which could destroy their entire crop, which can be a financially challenging dilemma. One farmer, now living in Texas, found himself facing this type of situation and decided to file for Chapter 7 bankruptcy protection.

The farmer had initially filed for Chapter 11 bankruptcy in July 2010, which reorganized the debts owed. However, the farmer lost protection of the Chapter 11 bankruptcy which caused the farm property to be scheduled for auction in late July. This prompted one of the man's creditors to initiate a sheriff's auction of the property in order to satisfy a judgment in 2010 for $1 million. The judge barred the farmer from filing another Chapter 11 petition for at least 180 days; however he did not prohibit the farmer from filing a Chapter 7 bankruptcy.

The filing of the Chapter 7 bankruptcy stopped the auction of the property. Although this type of filing for a business permanently shuts the business down, it also gave the farmer time to plan his next move before having to be forced off his property by a sheriff's auction. Additionally, this type of bankruptcy will eliminate all debts owed by the business, which allows the farmer to obtain a new start.

However, when filing a Chapter 7 bankruptcy in Texas it is important to properly fill out the legal paperwork necessary to complete the process. Even the smallest mistake can cause the bankruptcy petition to be thrown out by the court. Also, it is essential to have a good understand of applicable laws in order to make the right decisions regarding exemptions and other important aspects.

Source: agweek.com, "Grabanski stops sale of his ND assets by filing Chapter 7 bankruptcy," Mikkel Pates, July 30, 2013

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