Texas Bankruptcy Blog : Texas Bankruptcy Lawyer & Attorney : Fears Nachawati law Firm : Chapter 7, Chapter 13, Consumer Bankrutpcy : Dallas, Fort Worth, Austin, Houston, San Antonio

There is a common myth that gambling debts cannot be discharged in bankruptcy. The truth is that gambling debts usually receive the same treatment as any other unsecured debt, like credit cards or medical bills. However, under some unusual circumstances, a bankruptcy court may find that a gambling debt cannot be discharged.

Gambling debts commonly appear as credit card charges or cash advances. An important factor in the discharge of this debt is whether there was an intent to repay the debt when the charge or advance was incurred. If the debtor had no intent to repay the obligation, the credit card company may object to the discharge of this debt on the basis of fraud. Courts have generally been reluctant to listen to this objection by a creditor unless there is strong evidence of fraud. For instance, a debtor who takes out a $10,000 cash advance at the casino, even though he is recently unemployed and overwhelmed by debt, and who files bankruptcy the next day will likely have the hall-marks of fraud.

Most gambling debts in bankruptcy are not as cut and dry as the above example. If the credit card company objects, the bankruptcy court will hold a hearing. The court may look to the debtor’s past credit card transactions, any attempt to repay the obligation, and the records and testimony of the debtor to determine the existence of a fraudulent intent.

All gambling losses must be disclosed by the debtor on the Statement of Financial Affairs. This disclosure is a mandatory requirement and the intentional failure to disclose this information may result in a finding that the gambling debt cannot be discharged, or worse, the court may deny any discharge in the case as a result of the debtor’s misrepresentation. It is particularly important to disclose recent gambling losses to your attorney prior to the filing of your bankruptcy case. Recent credit card charges or cash advances can be problematic to any bankruptcy case; and especially troublesome if related to gambling debt.

Bankruptcy courts can be very forgiving to the honest, although perhaps foolhardy debtor, and very unsympathetic to the dishonest. Honesty and full disclosure is especially important in a case involving gambling debts. Discuss these debts with your bankruptcy attorney and provide all the requested documentation. The success of your bankruptcy case depends on it!

For free legal advice on gambling debt and other bankruptcy issues, contact the Texas bankruptcy lawyers of Fears | Nachawati today. You can email us or phone us toll free at 1.866.705.7584.

A joint petition for bankruptcy is a single bankruptcy petition filed together by a husband and a wife. Only individuals who are legally married on the date they file for bankruptcy can file a joint petition. Unmarried partners must each file for bankruptcy separately.

Note that there is no legal requirement that both spouses file for bankruptcy. It is possible for one spouse to file for bankruptcy individually.

If you are considering filing for bankruptcy, contact the Texas bankruptcy lawyers of Fears | Nachawati today for free legal assistance. To speak with an experienced Texas bankruptcy attorney, email us or phone us toll free at 1.866.705.7584.

When you file for bankruptcy, an automatic stay is put in place that stops all debt collection proceedings against you. Under bankruptcy laws, wage garnishment is considered a collection proceeding. Therefore, when you file for bankruptcy, all wage garnishments against you will stop – including IRS wage garnishments.

If your wages are being garnished and you are considering filing for bankruptcy, contact the attorneys of Fears | Nachawati today for free legal advice. To receive free legal assistance from a Texas bankruptcy lawyer, email us or phone us toll free at 1.866.705.7584.

Federal law guarantees open access to the courts and permits self representation in lawsuits, including bankruptcy proceedings. However, the most important question is not “can you,” but “should you” represent yourself in a bankruptcy case.

Proceeding pro se (Latin meaning “for himself”) in a bankruptcy case is like navigating a mine field while blindfolded. Is it possible to be successful? Sure! Will your bankruptcy case blow up? Probably. Books and internet resources simply cannot substitute for competent legal advice. Below are a few reasons why a pro se bankruptcy is a bad idea:

Reason 1: The Federal Bankruptcy Code is complex.

Reason 2: The Federal Rules of Bankruptcy Procedure are complex (and changing as of December 1, 2009).

Reason 3: The bankruptcy court’s local rules are complex.

Reason 4: The applicability of state law to federal bankruptcy law is complex, including state exemption laws, state criminal laws, and state collection laws.

Reason 5:  The bankruptcy trustee will examine your case more closely since you are not represented by counsel. The trustee will likely put you at the end of the 341 meeting docket to have extra time to review your bankruptcy case and ask questions.

Reason 6: Most skilled bankruptcy attorneys will not step into the middle of a pro se case when things go wrong.

Reason 7: Are you really qualified to answer important questions, like: “When should you file?” “What chapter should you file?”

Reason 8: Most courts will not allow a pro se bankruptcy debtor to file documents electronically through the court’s internet ECF system.

Reason 9: You can be audited by a CPA firm selected by the Department of Justice.

Reason 10: Occasionally the pro se case is such a chaotic mess that the debtor is forced to dismiss the bankruptcy and later re-file with the assistance of an attorney. That’s two bankruptcies on your credit report for the price of one!

Reason 11: If you are reaffirming a debt, you must appear in open court and answer the bankruptcy judge’s questions.

The upside of representing yourself is saving a few dollars. The downside is a considerable risk to your property, your future finances, and, in extreme cases, your liberty. Don’t risk your family’s well-being! Let an experienced bankruptcy attorney guide you through your bankruptcy case.

For free legal advice from a Texas bankruptcy lawyer, contact Fears | Nachawati today. Simply email us or phone us toll free at 1.866.705.7584.

Under the new bankruptcy laws, tax debt is treated the same way for both Chapter 13 and Chapter 7 bankruptcy.

In order for a tax debt to be discharged under Chapter 13 bankruptcy, five specific criteria must be met:

1. The tax return was due at least three years ago: The due date for the return must be at least three years before the bankruptcy petition was filed.
2. The tax return was filed at least two years ago: The return must have been filed a minimum of two years before the bankruptcy petition was filed.
3. The tax assessment is at least 240 days old: The IRS must have assessed the tax a minimum of 240 days before the bankruptcy petition was filed.
4. The tax return was not fraudulent: The return must not be frivolous or fraudulent.
5. The tax payer did not commit tax evasion: The bankruptcy petitioner must not be guilty of evading tax laws.

Note also that before a Chapter 13 bankruptcy will be granted, the petitioner must prove that they filed their four previous tax returns with the IRS. The petitioner must also provide the bankruptcy court with a copy of their last tax return.

For free legal advice about Chapter 13 bankruptcy, contact the Texas bankruptcy lawyers of Fears | Nachawati today. Simply email us or phone us toll free at 1.866.705.7584.

A person can go into bankruptcy in one of two ways. The most common way is for the person to voluntarily file a petition for bankruptcy. The second way a person can become bankrupt is for their creditors to ask the court to issue an order declaring that the person is bankrupt. This second method, involuntary bankruptcy, is rarely used, however.

In either case, the process is administered by a Trustee in Bankruptcy. You start by completing an application and providing it to the Trustee along with several other pieces of required information and documentation.

The Trustee will then assess your situation and help you determine whether bankruptcy is the most suitable option for you. If it is, the Trustee will prepare the legal documents for you to sign. Once the legal papers are signed and filed with the Superintendent of Bankruptcy, then you are officially bankrupt.

For free legal advice about Texas bankruptcy, contact the law firm of Fears | Nachawati today. To speak with one of our experienced Texas bankruptcy lawyers, simply email us or phone us toll free at 1.866.705.7584.

If you’re considering filing for bankruptcy, you may feel like the you’re the only one. You’re not alone. In fact, more than one million people filed for bankruptcy in 2008.

There is a misconception that filing for bankruptcy is about “cheating the system.” The truth is, however, most people who file for bankruptcy do so after a life-changing event that puts them in financial constraints.

Filing for bankruptcy is not a sign of personal failure. More often than not, a person files for bankruptcy because circumstances beyond their control have caused them to fall further and further behind on their bills.

One of the most common reasons for filing for bankruptcy is a serious illness. Other reasons include job loss and divorce. These three reasons account for more than 90% of all bankruptcy filings. In these cases, an already difficult situation is compounded by mounting debt and worries over foreclosure and repossession.

Bankruptcy helps individuals who have found themselves in financial straits by wiping the slate clean. Bankruptcy can give you a fresh start, and many people who have filed for bankruptcy have gone on to get their life back in order and earn back their good credit.

If you are considering filing for bankruptcy, contact Fears | Nachawati today for free legal assistance. To speak with one of our Texas bankruptcy lawyers, simply email us or phone us toll free at 1.866.705.7584.

The Associate Press is reporting that Citigroup Inc. will suspend foreclosures and evictions for 30 days. This moratorium will provide temporary relief for about 4,000 borrowers during the holiday season. Other lenders are expected to follow suit continuing a tradition that began last year for suspending foreclosures during the holiday season.

Thanks a lot.

A report release earlier this month by the U.S. Department of the Treasury indicates that many of the nation’s largest mortgage lenders are not doing enough to lower the numbers of home foreclosures. In one case the report found that after eight months of participating in the Home Affordable Modification Program (HAMP) Bank of America had registered a dismal 15 percent of the more than 1 million delinquent borrowers who are potentially eligible.

The HAMP, introduced in March 2009, provided guidelines for lenders to modify a home mortgage, such as capitalizing arrearages, extending a mortgage to 40 years and reducing the interest rate, until the payments get down to 31 percent of a borrower’s income.

One reason for the low numbers of loan modifications is that it is labor-intensive, according to John Rao, an attorney with the National Consumer Law Center. Mr. Rao testified to Congress earlier this year that lenders are not compensated for the labor-intensive process of a modification, whereas they are compensated for the extra work in foreclosing on a home. In other words, there is no real incentive to help the homeowner. Some lenders have delayed the loan modification process until the homeowner is forced to file bankruptcy and then add thousands of dollars in interest and costs to their home loans.

For homeowners that would benefit from a loan modification and a chapter 7 bankruptcy, lenders are especially reluctant to give permanent loan modifications, often offering interim loan modifications that last only two to three months. If the homeowner files for bankruptcy, the lender will often withdraw any workout plan leaving the homeowners further in debt.

The road to saving your home and easing your monthly debt obligation can be a perilous journey. It is best to use an experienced bankruptcy attorney to guide you through this difficult path. Until Congress decides to offer an effective program that offers real relief, bankruptcy can be a powerful option for saving your family’s home. 

For free legal advice from a Texas bankruptcy lawyer, contact Fears | Nachawati today. Simply email us or phone us toll free at 1.866.705.7584.

As soon as you file for bankruptcy, an automatic stay is put in place that prevents your creditors from collecting on your debts – which means that the harassing phone calls will stop.

The automatic stay is essentially a temporary injunction. It halts creditors from taking any further action to collect the debts you owe them for as long as your bankruptcy case is pending.

An automatic stay gives the debtor some breathing room. While the stay is in place, collectors cannot call you and all foreclosure, repossession and wage garnishment actions are stopped. The stay basically freezes the debt collection activities, giving you time to proceed with your bankruptcy filing and get your finances back in order.

Note, however, that a creditor can petition the court to be granted relief from the stay. In order to be granted this relief, the creditor must make a showing that the stay does not give them adequate protection or that their interest in a certain piece of property will be in jeopardy.

To receive free legal advice on Texas bankruptcy, including your protections under the automatic stay, contact Fears | Nachawati today. Simply email us or phone us toll free at 1.866.705.7584 to receive free legal assistance from a Texas bankruptcy lawyer.

Whether or not you can keep your credit cards after you file for bankruptcy is up to the credit card company to decide.

When you file for bankruptcy, you must list any existing credit card balances. Those balances, because they are unsecured debts, will be wiped out by bankruptcy. The credit card company will then cancel your credit card.

However, you can choose to reaffirm your debt, which means you agree to pay the debt even though you could have it canceled by bankruptcy. Also, you may be able to keep a credit card that has a zero balance. Again, though, this decision is up to the credit card company.

The Bankruptcy Judges Division of the Administrative Office of the United States Courts has published a 77 page Ebook and nine short online videos to explain the bankruptcy process. The series entitled “Bankruptcy Basics” provides basic information to debtors, creditors, and to the general public on different aspects of the federal bankruptcy laws. It also provides a basic explanation of the different bankruptcy chapters and answers commonly asked questions.

The nine part video series includes the following topics:

Part 1: Introduction - Bankruptcy is a legal process that provides relief to many individuals who can no longer pay all of their debts.

Part 2: Types of Bankruptcy - There are three main types of bankruptcy cases for individuals, the most common of which are chapter 7 and chapter 13.

Part 3: Limits of Bankruptcy - Some debts cannot be discharged in a bankruptcy.

Part 4: Filing for Bankruptcy - In order to file for bankruptcy, an individual must take a credit counseling course and accurately complete and file a number of documents.

Part 5: Creditors' Meeting - Every debtor is required to appear at a creditors' meeting conducted by a trustee who asks the debtor questions about the debtor's financial condition and gives creditors the opportunity to do the same.

Part 6: Bankruptcy Crime - A debtor must be honest and accurate in dealing with the court or face serious consequences, including being charged with a bankruptcy crime.

Part 7: Court Hearings - In some cases, a debtor may be required to appear at hearings before a bankruptcy judge.

Part 8: The Discharge - Debtors are usually able to discharge most or all of their debts. Once a debt is discharged, a creditor may not attempt to collect it from the debtor.

Part 9: Legal Assistance – Debtors are strongly encouraged to find competent legal counsel.

Please be advised that while the court’s resources are excellent sources for general information, the courts cannot give legal advice, and your unique situation will certainly require the advice of a competent bankruptcy attorney.

For free legal assistance from a Texas bankruptcy attorney, contact Fears | Nachawati today. Simply email us or phone us toll free at 1.866.705.7584.

There are specific limits set on how often an individual can file for bankruptcy. For Chapter 7 bankruptcy, you have to wait eight years after a previous Chapter 7 filing before filing again and six years after a previous Chapter 13 filing.

For Chapter 13 bankruptcy, you must wait two years after a previous Chapter 13 filing before you can file again and four years after a previous Chapter 7 filing.

There is no minimum amount of debt you must have in order to file for bankruptcy. What qualifies as unmanageable debt for one person may be completely manageable for another. It depends on your personal financial situation.

However, it is important to keep in mind that it does cost money to file for bankruptcy, so it might not make sense to file if you have only a few hundred dollars worth of debt.

Note also that while there is no minimum threshold for filing bankruptcy, there is a limit set on the maximum amount of debt you can have to file for Chapter 13 bankruptcy. In order to be eligible to file for Chapter 13 bankruptcy, you must have less than $336,900 in unsecured debt and less than $1,010,650 in secured debt.

To receive free legal advice from a Texas bankruptcy attorney, contact Fears | Nachawati today. You can email us or phone us toll free at 1.866.705.7584.

The case of In re Bourguignon, Ch. 7 Case No. 09-00766-TLM (Bankr. D. Idaho Sep. 23, 2009) provides yet another unfortunate example of the importance of obtaining sound advice before filing a bankruptcy case. On March 10, 2009, Christian and Tarra Bourguignon opened a 529 college savings plan for their daughter. The couple contributed $14,500 into the plan and the girl's grandmother put in another $40,000.

Approximately two weeks after opening the 529 account Christian and Tarra Bourguignon filed for chapter 7 bankruptcy.

The bankruptcy trustee claimed that the entire 529 account was property of the estate and subject to turnover to pay the Bourguignon’s creditors. The debtors proposed several reasons that the college savings funds are protected. The court first dispensed with a preliminary argument from the debtors that section 541(c)(2) of the bankruptcy code protects the entire account as a qualifying trust. The bankruptcy court found that Christian Bourguignon is the owner of the account, and "the College Account does not contain the requisite anti-alienation and anti-assignment provisions required under nonbankruptcy law and recognized by § 541(c)(2)."

The bankruptcy court next turned to the debtors' main argument: that the funds are excluded under Section 541(b)(6) because they were deposited within 365 days of the bankruptcy filing date. The bankruptcy court found that funds deposited in a 529 account are fully protected if deposited more than 720 days before the filing date; are protected up to $5,475 if deposited between 365 and 720 days; and are not protected at all if deposited within 365 days of the bankruptcy filing. The court also stated that the source of the funds (in this case the child's grandmother) did not matter, and ordered the debtors to turn over the entire college savings account ($54,500 plus interest) to the trustee for payment to creditors.

There are three important lessons to be learned from this case:

• First, grandparents and other relatives should be careful when contributing to college savings plans if there is a risk of the account owner filing a Chapter 7 within two years of the contribution;
• Second, if you are experiencing financial difficulty, it is important to discuss any significant transfer of money with a qualified professional; and
• Third, it is important to discuss all of the aspects of your finances with an experienced bankruptcy attorney prior to filing your case.

To receive free legal advice on bankruptcy, contact Fears | Nachawati today. Simply email us or phone us toll free at 1.866.705.7584 to speak with an experienced Texas bankruptcy attorney.

There is no requirement that married couples have to file for bankruptcy together. A husband or a wife can file bankruptcy separately.

If most of the debts belong to only one spouse, then it may be the best choice for that spouse to file for bankruptcy alone.

However, most spouses own at least some property jointly and have the same debts. In these cases, the creditors can still go after the non-filing spouse for repayment of the debt.

The precise effect that bankruptcy will have on the non-filing spouse depends on the marital property laws in the state where you live.

For free legal advice on bankruptcy, contact Fears | Nachawati. To speak with one of our experienced Texas bankruptcy lawyers, email us or phone us toll free at 1.866.705.7584.

A recent study by Fidelity Investments found that many young working Americans are growing more conservative in their behavior towards financial matters and employment decisions. The Fidelity Generation Y study investigated the attitudes and behaviors of more than 1,000 employed Americans ranging from 22 years to 33 years old. The Fidelity study found:

• Over 70 percent of Gen Y workers are very concerned about their finances with daily money management and budgeting as their biggest focus;
• Most Gen Y individuals are using mobile technology to stay updated on their cash flow situations;
• 41% say the economic crisis has made their generation more conservative; and
• More show a reluctance to “job hop” with one in four indicating the intent to remain with a current employer until retirement, up from 14 percent of those surveyed in early 2008;

Fidelity Investments reports that:

“The change in the mindset of young workers has been remarkable," said Brad Kimler, executive vice president of Fidelity's Consulting Services business. "Their attitudes and views toward their employer and finances are now more conservative and reflective of their parents' generation[.]”

So what is your financial attitude? Most people who go through bankruptcy emerge with a greater understanding of their monthly finances and a resolve to manage their financial life better. Most people are more conservative and careful with their finances after bankruptcy, slowly improving their credit scores and making wise decisions that lead to home ownership, retirement savings, and financial well-being.

Congress wants the bankruptcy debtor to succeed in the future. The bankruptcy laws require a debtor to go through a credit counseling session and a class on personal financial management. Surprisingly, most bankruptcy debtors are eager to take these classes.

If you are eager for a new beginning free of overwhelming debt, consult with an experienced bankruptcy attorney and consider your options for a better financial future.

To speak with a Texas bankruptcy lawyer for free, contact Fears | Nachawati today. Simply email us or phone us toll free at 1.866.705.7584.

Non-custodial parents facing mounting debts sometimes turn to bankruptcy as a way to get out from under their financial burdens. However, child support is not dischargeable in bankruptcy.

In fact, the Bankruptcy Reform Act of 1994 in part provides greater protection for debts owed to children and former spouses. These “domestic support obligations,” as they are sometimes referred to, are given high priority over other debts by the courts.

Also, if you owe back child support payments, you will still be responsible for those payments even if you successfully file for bankruptcy.

While bankruptcy will not relieve a parent of current or back child support obligations, it may still be a way to get back on track with your payments. By discharging other unsecured debts, such as credit card bills, you will free up money that can be put towards your domestic support obligations. 

To learn more about whether bankruptcy is the right option for you, contact the Texas bankruptcy lawyers of Fears | Nachawati for free legal advice. Simply email us or phone us toll free at 1.866.705.7584.

Many professionals, including bankruptcy attorneys, will advise a debtor who is unable to pay monthly debts to “investigate your options.” So how many “options” does a person have when there is not enough money to pay the bills? The answer is: three. 

The first is the “Do Nothing” option. Debtors who engage in this option hope that by avoiding phone calls and collection letters the debt will somehow just disappear. That is the same magic that makes a two year old become invisible when she closes her eyes. Obviously if you won’t see it, the collection companies can’t see it.

The “Do Nothing” option is the worst option of all because the debt does not disappear. In fact, the debt becomes bigger with increased fees and interest. Additionally, the debt collection efforts become more aggressive and may result in harassing telephone calls to family, neighbors, or your employer. Finally, you will likely be sued, your property seized or your income garnished.

The second option is “Negotiation.” Many debtors have had positive experience with this option which may include direct negotiation with the creditor for better terms, or help through a third party like a credit counselor or an attorney. Unfortunately, many people do not realize the consequences of negotiation which may include a resulting tax debt, negative items on a credit report, increased debt through fees and default interest rates, and substantial third party fees. It is well documented by the media and state attorney generals that many debtors that attempt the Negotiation option (e.g. credit counseling, debt settlement, debt negotiation, etc.) end up in worse financial shape because they opted for debt negotiation. If you elect the Negotiation option, hire a qualified and experienced professional.

The final option is “Bankruptcy.” Many professionals describe Bankruptcy as the “final option,” but in truth it may be the best option when you cannot pay your bills. Bankruptcy can give an honest debtor breathing room to reorganize debt without the pressures from collection agencies. Bankruptcy can also legally discharge debt without increased fees or tax consequences. At the end of a bankruptcy case the debtor can go forward with a “fresh start” and new financial beginning.

If your family is struggling with more month than money, it is time to examine your options. In the end, choose the option that is best for your family. Speaking with a qualified bankruptcy attorney can answer many of your debt questions.

For free legal advice from a Texas bankruptcy lawyer, contact Fears | Nachawati today. You can email us, or phone us toll free at 1.866.705.7584.

Payday loans, also known as cash advances, are short-term loans made at a high interest rate. Payday loans are typically made for a relatively small amount of money, but because of the high interest rate, the debt can quickly spiral out of control.

In most cases, payday loans are dischargeable in Chapter 7 bankruptcy. Payday loans are a form of unsecured debt, and virtually all unsecured debts are discharged in Chapter 7 bankruptcy.

For free legal assistance with Chapter 7 bankruptcy, contact the bankruptcy lawyers of Fears | Nachawati today. To speak with one of our Texas bankruptcy attorneys, email us or call our toll free number at 1.866.705.7584.

Some, but not all, tax debts are dischargeable in Chapter 7 bankruptcy. In order to have your tax debts discharged under a Chapter 7 bankruptcy, you must meet all five of the following conditions:

1. The debts are income taxes. Taxes other than income tax, such as fraud penalties, cannot be discharged in bankruptcy.
2. You filed a tax return for the debt you want to discharge at least two years before filing for bankruptcy.
3. The tax debt is at least three years old.
4. You pass the 240-day rule. This rule requires that your tax debt was assessed by the IRS at least 240 days before you filed for bankruptcy, or, alternatively, that the debt has not yet been assessed.
5. You have not committed tax fraud or willful tax evasion.

Note that you cannot discharge a federal tax lien under Chapter 7 bankruptcy. If the IRS already recorded a tax lien on your personal property before you filed for bankruptcy, then the tax lien will remain in place. The upshot is that you have to pay off the lien before you are allowed to sell the property.

For free legal advice on tax debts and other issues related to Chapter 7 bankruptcy, contact Fears | Nachawati. To speak with one of our Texas bankruptcy lawyers, simply email us or phone us toll free at 1.866.705.7584.

Yes, you can still purchase a home after filing for bankruptcy. Bankruptcy does not create any type of legal barrier to home ownership. As long as you are otherwise creditworthy, you can buy a house after you have filed for bankruptcy.

Also, the property you acquire after you file for bankruptcy, such as a new home, is not subject to the claims of your pre-filing creditors. You can purchase a home without fear that your past creditors will try to repossess it from you in order to fulfill your old debts.

As mentioned above, the issue really boils down to whether mortgage lenders see you as creditworthy. Most everyone needs a loan in order to be able to afford to buy a house. These days, bankruptcy typically ceases to have a real effect on your credit within about two years after you file. That means that within 24 months, many people who have filed for bankruptcy will qualify for a loan on as favorable of terms as they would have had they not filed for bankruptcy.

To learn more about the legal effects of bankruptcy, contact the bankruptcy lawyers of Fears | Nachawati today for free legal advice. Simply email us or phone us toll free at 1.866.705.7584.

Texas residents have the right to file for a Chapter 7 bankruptcy to help get rid of excessive debts.

You will need to fill out a packet of forms when you file your Bankruptcy petition in the Northern District of Texas. One of the forms in a Chapter 7 bankruptcy will ask you to list all unsecured debts you want discharged. By listing creditors such as credit cards, medical bills and utility bills under unsecured debts you will get these debts discharged. It is one of the best ways to get rid of overzealous creditors who call you day and night.

It is important that all forms be filled out accurately to assure that you all unsecured debts will be discharged and you will no longer be responsible to pay the debts. Once the bankruptcy court discharges your Chapter 7 bankruptcy, you will no longer be responsible to pay your unsecured debts. It will give you the break you need for a fresh start.

If you are considering bankruptcy, please contact law firm, Fears | Nachawati, toll free at 1.866.705.7584 or by e-mail at info@fnlawfirm.com for a free consultation and further information on what qualifies as an unsecured debt.

Under a 1992 decision by the U.S. Supreme Court called Dewsnup v. Timm, a second mortgage or lien stripping can only be accomplished in a Chapter 13 bankruptcy. Chapter 13 is intended for people with regular income or earnings to pay back a portion of their debts over time approved by the bankruptcy court.

In the Northern District of Texas, the process begins by filing a petition for Chapter 13 bankruptcy. You must also file a plan with the court to repay creditors all or part of the money that is owed to them using your future income. Depending on your income a repayment plan can take three or five years. In order to remove an unsecured second mortgage, the fair market value of the home must be less than the balance owed on the first mortgage.

The plan must be approved before it can take effect. If the bankruptcy court grants the motion, it will issue an order directing the holder of the second deed of trust to remove the lien from the home. The type of loan you hold does not matter during this process.

For a free consultation to see if you qualify for the removal of a second mortgage on your home, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or e-mail us at info@fnlawfirm.com.