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

During a Chapter 13 bankruptcy the debtor develops a plan to repay all or part of his debts through installments.  Once the bankruptcy court confirms the plan, the debtor is obligated to make payments over three to five years.  A lot can happen during those years, and sometimes a debtor is unable to pay the plan installment payments.  Fortunately the bankruptcy laws provide the Chapter 13 debtor considerable flexibility when facing changed financial circumstances.

If your inability to pay the plan installments is due to a temporary interruption in pay (lay off, change in employment, etc.) or an unexpected financial emergency (car repairs, medical expenses, etc.), you may be able to obtain a suspension of payments for a couple of months.  A suspension only delays your plan payments, so your plan will be extended to make these payments up in the future.  Since a Chapter 13 plan cannot extend past 60 months, suspending plan payments may only work for certain below-median income cases that are not initially scheduled as 60 month plans.

Modifying your Chapter 13 plan is another option, especially if your financial change is not temporary and you will continue to have difficulty paying your plan installments.  When you propose to modify the terms of your Chapter 13 plan, the bankruptcy court will scrutinize your financial records to determine what you can pay and whether creditors will receive more if your case was converted to Chapter 7 (a liquidation bankruptcy).

Since a Chapter 13 bankruptcy is a voluntary case, you can always dismiss your bankruptcy case.  If your case is dismissed prior to discharge, you will typically not be barred from re-filing and receiving a discharge in the future.  However, there are certain exceptions that may apply, and dismissal is usually a last option.  Consult with your bankruptcy attorney.

If your change of circumstances prevents you from affording any payment to creditors, you may opt for voluntary conversion to Chapter 7.  One benefit of conversion is that any debt incurred since your Chapter 13 filing date can be included in the Chapter 7 case. 

A hardship discharge is an option if your change in circumstances was beyond your control (job loss, illness, disability, etc.) and a Chapter 13 modification is not a solution.  A hardship discharge will end the Chapter 13 case prematurely and eliminate the remaining scheduled payments.  Hardship discharges are only granted for the most extreme cases.

If you find yourself unable to pay your Chapter 13 plan installments, speak with your bankruptcy attorney immediately.  While there are options for dealing with a financial change, delaying action will only make matters worse.  Speak with your attorney and be proactive in dealing with your finances.

When a debtor files a bankruptcy case, notices of the meeting of creditors is sent to all the creditors of the debtor.  The meeting of creditors is also called the trustee’s meeting and the 341 meeting (after section 341 of the bankruptcy code which compels the meeting).  This notice informs the creditor, among other things, that the debtor has filed a bankruptcy; of contact information for the debtor’s attorney and the trustee assigned to the case; and of the date, time and place of the meeting of creditors.

While notices are sent to all of your creditors the odds are that no creditor will appear at your meeting of creditors.  If a creditor does show up, it is almost always a local creditor, like a local bank seeking information regarding a secured loan, or individual creditor.  It is rare to see a representative of a national creditor at a meeting of creditors. 

The main reason that creditors do not appear at the meeting is that creditors are not allowed much time to ask questions of the debtor.  What the creditor can gain from the meeting does not justify the expense of sending a representative.  The bankruptcy trustee conducts a busy docket of bankruptcy debtors and is required to question each debtor.  Consequently, the trustee will only allow a few minutes for any creditor questions, and will not permit any “fishing expeditions” from a creditor.  A creditor who needs more time for questioning the debtor can schedule a private examination called a “section 2004 exam.”  Section 2004 exams are extremely rare.

Most individual creditors who appear at a meeting of creditors do so because they do not understand the process.  Individual creditors usually believe that their attendance is important to maintain their claim against the debtor.  The questions are generally inane, like: “Are you going to pay me?” or “You promised to pay me, right?”  The trustee cannot give legal advice to creditors, so without an attorney the individual creditor is usually left floundering.

When a creditor is represented by an attorney, the questions generally concern the debtor’s schedules of assets, liabilities, income, and expenses.  These questions may seek to uncover inconsistencies in the schedules.  Questions that go beyond the schedules may be objected to by your attorney.  The trustee will not permit the creditor to engage in a deposition of the debtor with the trustee acting as judge.

If you expect a creditor to attend your meeting of creditors, discuss the matter with your attorney.  While the ordinary bankruptcy case will not have creditors in attendance at the meeting, every case is unique.  Discussing your case with your attorney is the first step in being prepared for creditors at the meeting.

While it is common for a husband and wife to file a joint bankruptcy, in some cases it may be beneficial for only one spouse to file.  When one spouse files for bankruptcy protection, the other spouse is not automatically joined into the case.  The husband and wife are treated separately and individually, although there are some consequences to the non-filing spouse, both positive and negative. 

Filing separately can have several advantages to a husband and wife who have separate property and debts.  It is especially appropriate when there is a large debt that only one spouse is liable to pay, and the parties are able to either protect their marital property through exemptions or by virtue of the non-filing spouse holding the property as non-joint property.  Property in which the debtor has no ownership interest is generally not property of the debtor’s bankruptcy estate and beyond the reach of the bankruptcy court. 

While the bankruptcy automatic stay will stop collection action against the debtor, this protection does not apply to protect a non-debtor.  In a Chapter 7 case, a creditor may still collect on a joint debt from the non-filing spouse.  In a Chapter 13 case, the bankruptcy code imposes a co-debtor stay that generally prohibits collection on joint debts during the bankruptcy. 

Likewise, the discharge order at the end of the case will only apply to bankruptcy debtor.  The discharge does not prevent collection on any joint debt from the non-filing spouse.  Most joint debts are the result of a contract or the agreement of the husband and wife to pay a debt, however in some limited cases a statute or other circumstances may make both parties liable for a debt.  If you have any questions concerning whether you or your spouse is liable for a debt, consult with your attorney. 

Property may be protected during the property through state or federal law exemptions, or the property may be excluded from the bankruptcy estate when the bankruptcy debtor has no ownership interest.  Property that is held jointly and cannot be protected by exemption laws may be at risk for turn-over to pay creditors in a Chapter 7 case. 

The decision to file bankruptcy for one or both spouses can require a complex analysis of the separate and joint property and debts of each spouse.  Every case is different and while some cases gain a benefit from filing jointly, other cases receive a greater benefit from a separate bankruptcy.  If you are in a situation where a separate bankruptcy filing may benefit your family, consult with an experienced bankruptcy attorney and discuss your options.  The federal bankruptcy laws offer many choices for individuals needing debt relief and your attorney can help you decide the best financial decision for your family.

Occasionally a client is under a misconception that a Chapter 7 bankruptcy discharge will erase all creditor interests in secured property.  In other words, after the bankruptcy there is no house loan or car loan, and the debtor is able to keep the house or car.  

A Chapter 7 discharge acts as a permanent court injunction prohibiting the collection of debts incurred prior to filing the bankruptcy case.  The discharge order stops creditor action against the debtor personally - no more lawsuits, phone calls, or collection letters.  However, the creditor may pursue any legal claim against a debtor's property. 

To understand a collection action against a debtor's property (called an "in rem" action), let's examine a typical auto loan.  The creditor and the debtor enter into a contract wherein the debtor personally promises to make payments on the loan and the creditor promises to not repossess the car as long as these payments are made. The loan is secured by the auto and a lien is recorded with the state.  When a debtor receives a bankruptcy discharge, the creditor is prohibited from collecting on the contract, but the discharge does not (generally) extinguish the lien.  Consequently, the creditor can repossess the auto at the end of the bankruptcy case when done in accordance with state law.  The creditor may not sue the debtor to recover money on the contract. 

The general rule is that secured property must be paid for or returned to the creditor.  For this reason a reaffirmation agreement is often used during a Chapter 7 bankruptcy case.  A reaffirmation agreement is a new contract in which the debtor agrees to continue personal liability on a secured loan and the creditor agrees to not repossess the property.  The reaffirmation agreement continues the personal liability of the debtor, despite the bankruptcy discharge.  Reaffirmation agreements are only available to Chapter 7 debtors and the agreement must be executed before the bankruptcy discharge is entered.  The debtor can revoke the agreement with 60 days after the agreement is signed. 

Failure to timely execute a reaffirmation agreement causes the automatic stay to be lifted and the property is longer a part of the bankruptcy case.  The property then be repossessed by the creditor, even though you are current on the loan.  This situation recently was discussed last year in the Ninth Circuit Court of Appeals case Dumont v. Ford Motor Credit Company 

If you have an auto loan, home loan, or other secured property you want to keep after your Chapter 7 bankruptcy, discuss your options with an experienced attorney.  The federal bankruptcy laws offer many options for protecting property and your attorney can help you select the right decision for you and your family.

While the Bankruptcy Code does not permit a bankruptcy court to modify the terms of a home mortgage, a second mortgage that is entirely unsecured may be stripped away during a Chapter 13 bankruptcy.  For example, if you own a home that is presently worth $200,000 and the first mortgage balance is 200,001, any additional mortgage lien may be stripped away since that debt is not secured by any value in the home.  The debt is reclassified as unsecured, is treated as unsecured during the bankruptcy, and is subject to discharge at the end of the case.  However, if the debtor does not successfully complete the Chapter 13 case, the lien stripping benefit is lost. 

The most important part of the lien stripping process is obtaining an accurate valuation of the property.  Most courts agree that the appropriate time for valuing the property is at the time of the Chapter 13 confirmation hearing, not at the time the bankruptcy case was filed.  This may be several months after you file your Chapter 13 case.  A professional appraisal and other evidence of the value of the property are necessary for successful lien stripping. 

Lien stripping may not require both debtors to file bankruptcy.  In a recently decided case in Michigan, a married couple owned property, but only the wife filed bankruptcy.  She then filed an adversary case against a lien holder to strip away an entirely unsecure second mortgage.  The lien holder attempted to join the husband to the lawsuit, but the bankruptcy court refused.  The court granted the wife's lien stripping motion saying that, since there was no equity,  the bankruptcy estate had no interest in that property.  Under Michigan law (and in many other states) a married couple holds a home jointly as tenants by the entirety.  This is a special legal ownership status where each party owns an undivided whole of the property, as a single legal entity.  The bankruptcy court found that both spouses do not have to be included in the lawsuit even though both spouses receive the benefit of the stripped lien.  This case is currently on appeal. 

In today's economy where many homes have lost value, lien stripping second mortgages in bankruptcy is becoming commonplace.  If you have a second mortgage and need bankruptcy relief, consult with an experienced bankruptcy attorney and discuss your options.  There are many ways to save your family home using the powerful federal bankruptcy laws.

Individuals buried in debt need fast relief.  The required relief may vary from case to case, like relief from creditor harassment, from a lawsuit, or from a pending foreclosure.  Fortunately, the bankruptcy process provides you with immediate legal relief from the time you hire an attorney.  As your case progresses, the legal protections grow broader in scope and more powerful in effect. 

The first legal protection starts when you hire an attorney to represent you during your bankruptcy case.  This protection is derived from the federal Fair Debt Collection Practices Act (FDCPA).  Under the FDCPA a debt collector is prohibited from direct contact with a debtor who is represented by an attorney.  When you hire counsel you are able to forward all communication from a debt collector to your attorney, and the debt collector may no longer contact you directly.  This protection stops harassing phone calls and threatening letters from third party debt collectors while you and your attorney are preparing to file your bankruptcy. 

The second powerful protection commences the moment you file your bankruptcy case.  The bankruptcy automatic stay stops all creditor collection action immediately and automatically.  This legal protection applies to all creditors whether or not the creditor is aware of the bankruptcy filing.  The automatic stay is a legal protection that immediately stops any pending lawsuit, foreclosure, garnishment, or other legal proceeding.  The automatic stay is effective during the duration of your bankruptcy case. 

The final protection is the order of discharge that occurs at or near the end of your case.  The discharge order is a court injunction that prohibits discharged creditors from taking any kind of collection action against you personally.  The discharge injunction forbids a discharged creditor from sending bills, making collection phone calls, or filing a lawsuit to collect on a debt.  This protection is final and permanent.  Violation of this court injunction has serious consequences, and may result in a federal contempt of court charge. 

If you are experiencing a debt problem and need immediate relief, consult with an experienced bankruptcy attorney and find out how the bankruptcy process can help you.  Whether you need to stop harassing phone calls, or end a legal proceeding, bankruptcy’s powerful protections can eliminate your debt and give you peace of mind.

The worst thing about filing bankruptcy is agonizing over the decision to file.  Many people worry about under-going a grueling investigation concerning their finances, losing everything they own, and having to deal with a very public court proceeding.  The truth is that bankruptcy can be the best decision for someone drowning in debt. 

Once you decide to file bankruptcy, you will discover that the procedure is very simple and straight-forward.  The bankruptcy process essentially breaks down to an accounting to determine whether you have sufficient assets or income to pay something to creditors.  If you do, then your creditors will receive some payment and the rest of your debts are discharged.  If you don’t, then creditors receive nothing and are discharged.  There are a few narrow exceptions to discharging debts, like student loans, child support, and recent taxes, but most debts are dischargeable. 

Nearly all those who file bankruptcy are able to keep all of their property.  The United States Trustee Program reports that nationwide only around four percent of all Chapter 7 bankruptcy cases have assets that are turned over to the bankruptcy trustee.  That means one case in twenty-five may have non-exempt property that is taken and sold to pay creditors.  An experienced bankruptcy attorney is able to identify assets that may be at-risk and will advise the client regarding options for protecting the asset from turn-over. 

Many people are unaware that the bankruptcy process is quite private.  The press reports on celebrities who file bankruptcy, but unless you are famous or infamous, you will likely not receive any attention.  Newspapers no longer publish the names of individuals who file bankruptcy.  Notice of your bankruptcy is sent to your creditors, but not to your friends, family, bank, or your employer (unless you owe money to them). 

The typical debtor never sees the bankruptcy judge, and there is generally one meeting with a bankruptcy trustee.  This meeting will take place with other debtors and, while it is open to the public, it is rare that anyone other than debtors, attorneys, and an occasional creditor attends this meeting.  Most clients report being very nervous about meeting with the bankruptcy trustee, and are surprised at how fast and easy the meeting actually is. 

Many clients confess that bankruptcy was the best decision to discharge overwhelming debt.  Once the burden of debt has been lifted, you feel better and your financial condition can begin to improve.  If you are struggling with debt, speak to an experienced bankruptcy attorney and learn how the federal bankruptcy law can provide you with a fresh start.

Usually by the time a person visits a bankruptcy attorney he has been struggling with overwhelming debt for months if not years.  Often the person’s creditors have not been paid for a considerable time.  It is not surprising that occasionally a person will forget to list a creditor in the bankruptcy paperwork.   

If an omitted creditor is discovered during the bankruptcy case, the law requires the debtor to file amended schedules and identify the creditor.  The debtor has an obligation to ensure all creditors are identified and receive notice of the bankruptcy case.  Intentionally failing to list a creditor can cause that debt to be declared non-dischargeable and survive the bankruptcy. In extreme cases the bankruptcy court may deny a discharge altogether. 

Sometimes even the most diligent debtor will forget a creditor.  Things get trickier if the omission is discovered after the bankruptcy case has closed.  How the debtor proceeds will depend on the court and the circumstances.  In many cases an omitted creditor is considered discharged as a matter of law.  If an unsecured creditor did not receive notice of the bankruptcy, but none of the debtor’s assets were distributed to creditors, many bankruptcy courts say the omission did not have any practical effect.  In these cases it didn’t matter that the creditor did not receive notice, the debt is discharged anyway. 

Conversely, if an omitted creditor loses the opportunity to receive money through the bankruptcy, the omission matters a great deal.  Under these circumstances the failure to include the creditor means the debt cannot be discharged and the debtor is stuck with paying the debt. 

A person who files a bankruptcy case without an attorney is called a pro se debtor.  “Pro se” is Latin meaning “for oneself;” in other words, you are on your own.  Being on your own during your bankruptcy may save a few upfront dollars, but can cost you plenty in the long run.  There are many negative consequences that are often unexpected and sometimes disastrous. 

The savings pro se debtors receive is minimal and the risk is great.  Attorney fees during bankruptcy are supervised by the United States Bankruptcy Court.  The federal bankruptcy law allows an attorney to collect reasonable compensation for services rendered during a bankruptcy case.  Consequently, bankruptcy attorneys charge similar fees in order to stay competitive, and attorneys must disclose their fee to the bankruptcy court.   

When you are represented by an experienced bankruptcy attorney you receive several benefits.  Your attorney brings years of experience and knowledge in areas including the Federal Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the bankruptcy court’s local rules, federal bankruptcy case law, and state and federal exemption and collection laws.  Your attorney is also familiar with the bankruptcy judge, the bankruptcy trustee, and local creditor practices. 

When you are represented, you will have counsel at the Meeting of Creditors with the bankruptcy trustee.  The trustee assumes that a pro se debtor has made errors in the bankruptcy, and will grill the pro se debtor and scrutinize the bankruptcy case.  When you are represented, your attorney helps you answer any trustee questions, and can file motions and responses via the court’s electronic filing system.  When you are on your own you must mail or personally file documents with the court and must appear before the bankruptcy judge to reaffirm a debt. 

One of the most beneficial aspects of a Chapter 13 bankruptcy is the Co-Debtor Stay.  This protection is designed to insulate the debtor from indirect creditor pressure through friends or relatives.  The Co-Debtor Stay prohibits collection actions against an individual who has a joint consumer obligated with the debtor in bankruptcy.  The Co-Debtor Stay starts automatically when the Chapter 13 bankruptcy case is filed and continues until the case is closed, dismissed, or converted to Chapter 7 or 11. Free Consultation 

The Co-Debtor Stay is intended to protect the bankruptcy debtor, not the co-debtor.  The Co-Debtor Stay does not eliminate the co-debtor’s legal obligation to pay the debt.  However, the Co-Debtor Stay prevents collection action by the creditor against the co-debtor during the pendency of the Chapter 13 case.  Free Consultation 

There are some limitations to the Co-Debtor Stay.  The Co-Debtor Stay is only available in a Chapter 13 case, and does not apply in Chapter 7 or 11 cases.  The Co-Debtor Stay does not prohibit collection action on business debts.  Finally, a joint obligation on a tax debt is generally not considered a consumer debt.

The Co-Debtor Stay can also be modified or terminated by the bankruptcy court.  A creditor may be successful in terminating the Co-Debtor Stay if your bankruptcy plan proposes to not pay the debt, if the creditor's interests would be irreparably harmed by continuation of the Co-Debtor Stay, or if the co-debtor received "consideration" for the debt (e.g. you cosigned a car loan for a relative, who actually owns the car). Free Consultation 

If a creditor knowingly violated the Co-Debtor Stay, the bankruptcy court may find the creditor in contempt of court and impose a fine and award damages, including attorney's fees. Any collection action taken by a creditor in violation of the Co-Debtor Stay is void. Free Consultation 

If you have joint debts and are considering bankruptcy, speak to an experienced attorney and discover the benefits and protections of a Chapter 13 bankruptcy.  A Chapter 13 bankruptcy case can stop collection action against you and your co-debtors, and give you time to repay or eliminate your debts.  An experienced bankruptcy attorney can help you analyze your financial situation and choose the best strategy for resolving your debt problems. Free Consultation

The effects of debt can affect your credit, your health, and even your job.  Calls to your work from debt collectors can interfere with your job performance.  Requesting payday advances from your employer can cost you a raise or promotion.  In some extreme cases your debt problem can even get you fired.   

The Cleveland Plain Dealer recently reported that 39 Defense Finance and Accounting Service employees will lose their jobs as a result of their bad credit ratings.  In each case the employee mismanaged finances and failed to meet standards the government requires of employees who have access to sensitive information like Social Security numbers.  While you may not have a government job that requires a security clearance, if your debt issues are affecting your job, it is time to get help. 

Government and many private employers hold the opinion that excessive indebtedness increases the temptation to commit unethical or illegal acts in order to obtain funds to pay off debts.  Private employers that are especially sensitive to their employees’ debt include banks and other financial institutions, retail stores, and any business where the employee might handle cash on a routine basis. 

The federal bankruptcy laws can help you solve your debt problem without losing your job.  Section 525 of the Bankruptcy Code prohibits a government or private employer from terminating or discriminating against an employee who files bankruptcy.  The federal law clearly forbids an employer from firing you on account of your bankruptcy. 

Many employers view bankruptcy as a resolution of a debt problem through a government approved process, which may positively reflect on the employee as an indication of financial responsibility. Eliminating your debts through bankruptcy may also decrease financial pressures and lessen the risk of unethical or illegal acts. 

If your debts are affecting your job, consult with a bankruptcy attorney and explore your options.  Bankruptcy is a federally guaranteed legal process that helps individuals recover from overwhelming financial hardship.  Protect yourself and your job by getting the help and relief you need. Free Consultation

Several courts have stated that the bankruptcy laws are meant to give an honest debtor a fresh start, but not a head start.  It is important to understand that the bankruptcy laws in this country are very forgiving, but these laws require the debtor to make reasonable efforts to repay creditors.  The debtor is obligated to disclose all income and assets to the bankruptcy court.  From these disclosures the bankruptcy trustee, creditors, and the court are able to determine what, if anything, the debtor can afford to repay. 

The debtor has a great responsibility to truthfully disclose income and assets to the best of his or her ability.  The federal bankruptcy laws will relieve the honest debtor from the stress of overwhelming debt.  However, the dishonest debtor can face serious consequences. 

One consequence of failing to disclose income or assets is that the debtor may be denied a discharge.  Section 727 of the Bankruptcy Code is designed to protect the integrity of the process and permits the court to dismiss the debtor’s case for dishonest acts like lying on the bankruptcy schedules, hiding assets, failing to maintain financial records, refusing to turn over records, and refusing to cooperate with the trustee.  The court may deny the dishonest or uncooperative debtor a discharge under Section 727 and the debtor will remain liable for all debts.  To make matters worse, any assets turned over during the case will still be administered by the bankruptcy trustee and the debtor may lose non-exempt property to creditors. 

Another more serious consequence for the dishonest debtor is the prospect of being charged with bankruptcy fraud.  The Federal Bureau of Investigation ordinarily investigates allegations of bankruptcy fraud, but other federal agencies may become involved including the Internal Revenue Service Criminal Investigation’s Bankruptcy Fraud Program.  Most bankruptcy fraud is first discovered by the bankruptcy trustee, and is often the result of whistle blowing from neighbors, creditors, or ex-souses.  The Department of Justice Trustee Program encourages individuals to report bankruptcy fraud.  

In bankruptcy, honesty is the best policy.  For an individual who needs relief from overwhelming debt, bankruptcy is a tremendous tool that gives real results.  The promise of bankruptcy is a fresh start, but not a head start.  Debtors who are dishonest during the bankruptcy process can lose the benefits of a bankruptcy discharge, and may be criminally charged with one or more federal crimes.  If you need help with your debt problem, speak honestly and frankly with an experienced attorney and learn how the powerful federal bankruptcy laws can help you. Free Consultation

There are many strange misconceptions regarding bankruptcy.  Some believe that a person is unable to file bankruptcy if the debtor is employed.  Another myth is that self-employed people can't file bankruptcy. These myths can prevent a person from obtaining needed relief from overwhelming debt. Free Consultation 

Employment is not a precondition for filing for bankruptcy protection.  The bankruptcy laws require that the debtor state all income for the past six months and list his or her current income.  This income information is used to calculate the debtor's ability to pay creditors.  If the income information demonstrates that the debtor is able to pay a substantial amount to creditors over a five year period, the debtor may be ineligible to file Chapter 7 (a liquidation bankruptcy) and must file Chapter 13 (a repayment bankruptcy).  Most employed debtors are able to produce the required income information from pay stubs, W-2s, and employer records. Free Consultation 

Self-employed debtors must also produce income information for the six months prior to the bankruptcy filing and show current income.  The bankruptcy trustee will require a self-employed debtor to show net income (gross business profit minus necessary business expenses).  If you are self-employed and considering bankruptcy, it is time to start gathering income and expense information.  If you do not already keep track of your business finances in a ledger or with computer software, it is time to start.  You may have to recreate your income through bank records, and your expenses through receipts and memory. Free Consultation 

If you are struggling with a debt problem that you cannot overcome, consult with an experienced bankruptcy attorney.  Whether you are employed, unemployed, retired, disabled, or self-employed, an experienced bankruptcy attorney can suggest solutions that will end your debt nightmare.  The federal bankruptcy laws are very broad and can help you and your family to a fresh financial start. Free Consultation

Across the nation, consumer bankruptcy filings have increased 14% from the same period one year ago.  Over 770,000 consumers have filed bankruptcy during the first six months of 2010 - a rate of one in 150 households, according to data from the National Bankruptcy Research Center.  The American Bankruptcy Institutes estimates that more than 1.6 million bankruptcy cases will be filed during 2010, the largest total since Congress enacted bankruptcy reform legislation in 2005. Free Consultation 

Nevada is currently the state with the highest consumer bankruptcy rate followed by Georgia, California, Utah, and Tennessee.  The lowest bankruptcy rates are in Alaska, the District of Columbia, and South Carolina, which have filing rates less than 40% of the national average.  The national statistics also reveal that bankruptcy filers are choosing Chapter 7 (liquidation) over Chapter 13 (repayment plan).  Only 27% of May 2010 consumer bankruptcy cases were filed under Chapter 13 cases, despite the attempt by Congress to encourage more Chapter 13 filings rather than Chapter 7.  However, this chapter preference varies from state to state.  Louisiana debtors filed Chapter 13 a whopping 61% of the time, but debtors in Iowa, New Mexico, and South Dakota all chose Chapter 13 less than 10% of the time. Free Consultation 

The total number of bankruptcy cases has risen each year since 2005 when more than two million cases were filed.  Many of these bankruptcy cases are husband and wife filings, also called joint filings.  Researchers estimate that nearly one-third of all bankruptcy cases are joint husband and wife filings. 

If you are in financial distress, you are not alone!  The federal bankruptcy laws are meant to relieve the honest but unfortunate debtor of the stress of overwhelming debt.  The bankruptcy process works and can provide you and your family with real relief.  Don't live your life in a debt prison.  Free yourself through the power of the federal bankruptcy laws. Free Consultation

The United States Trustee Program is a component of the Department of Justice.  The Trustee Program appoints and supervises local private trustees who administer Chapter 7 and 13 bankruptcy estates.  One of the private trustee’s chief duties in Chapter 7 cases is to liquidate the debtor’s nonexempt assets and pay creditors with the proceeds.  Similarly, in a Chapter 13 case the trustee must ensure that the debtor devotes all disposable income to debt repayment. Free Consultation 

The trustee is not your friend, the judge, or your legal counsel.  The trustee has no judicial power to make final decisions or issue orders regarding your bankruptcy case.  While the private trustee is very skilled at bankruptcy law, the trustee is forbidden from giving the debtor legal advice.   

On occasion a debtor will contact the trustee’s office with questions concerning the bankruptcy case.  This is always a bad idea and often results in a negative outcome.  Direct debtor contact is uncommon, so the trustee will identify and remember a debtor that personally contacts his or her office.  The case may have been a “routine” bankruptcy case for the trustee, but after the debtor contact the case is squarely on the trustee’s radar.  The trustee will assume there is a problem with the bankruptcy and scrutinize the case. Free Consultation 

During a lawsuit direct communication with represented litigants is generally prohibited.  Many trustees are also licensed attorneys, but may communicate directly with you while performing the duties of bankruptcy trustee.  If you call the trustee, he or she will likely speak with you.  And why not?  You may inadvertently disclose something that is better left unsaid.  What seems like an innocent and expedient communication may turn into an issue that you are unable to predict.  Free Consultation 

The bankruptcy trustee is not your friend.  If you have questions concerning your bankruptcy, discuss your issues with your attorney.  Your attorney can answer questions about your case, and is experienced in dealing with the bankruptcy trustee.  Let your attorney represent you and do not complicate your case by communicating directly with the bankruptcy trustee. Free Consultation

Your bankruptcy attorney has many powerful methods to help you keep property while eliminating debt.  One tool is lien avoidance, which is available to both Chapter 7 and Chapter 13 debtors.  The general rule in bankruptcy is that debts secured by a lien must be paid or the property must be surrendered to the creditor.  However, under certain circumstances, a lien can be legally avoided without losing the property. Free Consultation 

The Bankruptcy Code identifies two different types of liens that may be avoided during bankruptcy: (1) a judicial lien; and (2) a non-possessory, non-purchase money security interest in household goods or tools of the trade.  Furthermore, to qualify for avoidance the debtor must be able to apply a bankruptcy exemption (a legal allowance to the debtor to protect property from creditors) to the property securing the debt. 

Clear as mud, right? 

Let's make it a little clearer: first, judicial liens are judgments and garnishments caused by a court order or judicial process.  If your property is subject to a debt imposed by a court order, it may be possible to avoid the lien during bankruptcy.  Statutory liens, like tax liens, are not avoidable in Chapter 7, but may be avoidable in Chapter 13. Free Consultation 

Second, a non-possessory, non-purchase money security interest is simply a lien that you gave a creditor against property that you owned prior to incurring the debt and did not acquire using money from the creditor.  A typical example is a personal bank loan secured by your television and/or other household items.

Finally, to qualify for lien avoidance, the debtor must be able to apply a legal exemption to the property.  For instance, if you own a television worth $500 used as collateral for a $1,000 personal loan, you may be able to apply a legal exemption to protect the television and avoid the lien against it.  Once the lien is avoided, the status of the debt changes from secured to unsecured and is likely discharged at the end of the bankruptcy case. Free Consultation 

Additionally, if the legal exemption does not protect all of the value of the property, the lien may be reduced to the extent the lien secures the property.  Using the above example, if the television is worth $500, but the debtor is only able to exempt $250 of its value, the creditor's lien would be reduced in value from $1,000 to $250 (the amount of non-exempt equity in the television). 

To avoid a lien the debtor's attorney files a motion with the bankruptcy court alleging that the creditor's lien is impairing the debtor's exemption.  Typically these motions are uncontested and are granted without hearing. 

It is important that you provide your bankruptcy attorney with documentation for all of your loans.  Your attorney can avoid certain liens during the bankruptcy that will safeguard your property after your bankruptcy discharge. Free Consultation

The federal bankruptcy laws promise a fresh financial start for the honest but unfortunate debtor.  Bankruptcy balances the interests of the debtor to obtain his fresh start and the interests of the creditor to see that the debtor pays whatever he can afford.  In some circumstances the debtor can complicate his bankruptcy case before he files. Free Consultation 

Mistake #1: Paying an Insider Creditor

The bankruptcy laws attempt to ensure that all creditors receive fair treatment during the bankruptcy process.  One concern is that the debtor will pay loans to family or friends before filing bankruptcy, and therefore deprive other creditors from receiving payment.  Family, friends, business partners, and other creditors who have close relationships with the debtor are called “insider creditors” and transfers to insider creditors can be avoided by the bankruptcy trustee if the transfer occurred within one year before the bankruptcy filing.  For instance, if you gave your mother $1,000 from your income tax refund as payment for a debt, and then filed bankruptcy two months later, the bankruptcy trustee can sue your mother to recover the $1,000.  To make matters worse, often the debtor could have protected the cash money during the bankruptcy and paid the debt without difficulty after the case was filed. Free Consultation

Mistake #2: Incurring Debt After Deciding to File

Some people decide to charge up credit cards or take payday loans just before filing bankruptcy.  If you have decided to file bankruptcy, do not incur additional debt.  Taking loans with no intention to repay the creditor could be fraud.  It could also be a criminal act. 

Mistake #3: Transferring Property

Some people fear that they will lose property when they file bankruptcy.  Some will give away or sell property to avoid losing it.  In most cases your bankruptcy attorney can protect your property and you will not lose anything.  However, once you have transferred an item it is no longer eligible for legal protections.  For instance, a car worth $2,000 is likely entirely protected from turnover during your bankruptcy.  If you transfer title of this vehicle to your brother before the bankruptcy, the trustee can avoid the transfer, take the car, and sell it to pay your creditors. Free Consultation 

Mistake #4: Cashing out Retirement

Most retirement accounts are entirely protected during bankruptcy.  Unfortunately, some people are unaware of these broad protections and cash out their retirement savings out of fear that it will be taken during the bankruptcy.  Sometimes the money is spent to pay off loans which can create preference issues.  In other cases the debtor converts an exempt asset (retirement funds) to a non-exempt asset (e.g. a paid off car). Free Consultation 

Mistake #5: Failing to Be Honest

This is the worst mistake of all because the bankruptcy laws do not protect a dishonest debtor.  Failure to truthfully list all of your assets, debts, income and expenses is grounds for dismissal of your case, or you may have to answer allegations of bankruptcy fraud (a federal crime). 

If you are experiencing financial difficulty and are considering bankruptcy, discuss your case with an experienced bankruptcy attorney.  Your bankruptcy attorney can advise you on the best actions to take before bankruptcy and how to avoid common mistakes.  Use the federal bankruptcy laws and protect your property. Free Consultation

Examining your options is important for anyone experiencing debt problems.  If you are considering bankruptcy or debt settlement to resolve your financial difficulties, investigate the consequences of each process before making your decision.  Below is some information about debt settlement companies and bankruptcy that you may not know: Free Consultation 

Debt Settlement:  The debt settlement process will harm your credit for years.  Creditors will report your delinquent account until it is paid.  Your report may identify settled accounts as paid less than 100%, which also adversely affects your credit score. 

Bankruptcy:  Any debt included in a bankruptcy appears on your credit report as discharged with a zero balance from the date you filed your bankruptcy case.  Bankruptcy stops adverse reporting so your credit report can improve.  Free Consultation 

Debt Settlement:  The typical debt settlement account will resolve your debt with a lump sum payment of between 20% and 80% of the debt.

Bankruptcy:  In most bankruptcy cases you pay nothing to unsecured creditors. 

Debt Settlement:  Any settled debt will have tax consequences and you may have to pay the IRS. 

Bankruptcy:  There is no tax liability for a debt discharged in bankruptcy. 

Debt Settlement:  You may be sued while you or your representative is attempting to settle your debt.

Bankruptcy:  All lawsuits are prohibited during your bankruptcy case. 

Debt Settlement: Some debt settlement companies are disreputable and the process is even illegal in some states.

Bankruptcy:  The bankruptcy process is authorized by the United States Constitution and its laws are written by Congress.  Only licensed attorneys admitted to practice in the federal courts are able to represent bankruptcy debtors. 

Debt Settlement:  The debt settlement process can take more than a year.  The general rule is: the longer you don’t pay, the better the settlement.  Creditors are reluctant to accept less than full payment unless they believe that you may file bankruptcy. Free Consultation

Bankruptcy:  The typical chapter 7 bankruptcy case takes less than six months. 

If you are struggling with debt, investigate your options and speak with an experienced bankruptcy attorney.  The federal bankruptcy law is a powerful tool to eliminate your debt problem and put you on the road to financial recovery.

The automatic stay is a powerful bankruptcy protection that immediately stops nearly all creditor action against a debtor.  The automatic stay is a temporary injunction against debt collection and is meant to give the debtor a “breathing spell” from his creditors.  The automatic stay permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy. Free Consultation 

This protection is immediate and “automatic” upon filing a bankruptcy petition - no hearing is necessary.  The stay is a legal injunction ordered by the bankruptcy court that prohibits a creditor with a claim that arose before commencement of the bankruptcy case from taking many actions, including: Free Consultation 

• contacting the debtor to request payment (stops collection calls)
• initiating or continuing a lawsuit against the debtor (stops lawsuits)
• enforcing a judgment against the debtor (stops wage garnishments)
• repossessing personal property or foreclosing on real estate (stops repossessions and foreclosure)

While the automatic stay is immediate, it is not permanent.  The stay can be contested by a creditor and lifted by the bankruptcy court after notice and a hearing.  There are also a few exceptions to the automatic stay protections, for instance: the automatic stay does not prevent criminal prosecution.  Likewise the automatic stay does not stop lawsuits to establish or modify alimony, maintenance, or support. Free Consultation 

Individuals that file for bankruptcy receive this powerful legal injunction against creditor actions.  However, the automatic stay is just one weapon in your bankruptcy attorney’s arsenal.  Your attorney can use the power of the bankruptcy laws to help you make the best decisions for your family’s future financial health.  If you are struggling with debt, consult with an experienced bankruptcy attorney and learn how the federal bankruptcy laws can help you. Free Consultation
 

The Bankruptcy Code requires every debtor to appear and submit to a bankruptcy examination under oath at a meeting with the debtor's creditors.  This meeting is presided over by the bankruptcy trustee and is an opportunity for creditors and the trustee to determine if assets have improperly been disposed of or concealed or if there are grounds for objection to discharge.  At this meeting the trustee must inform the Chapter 7 debtor of the consequences of bankruptcy, the availability of relief under other chapters of the Bankruptcy Code, and the effect of receiving a discharge of debts and of reaffirming a debt. Free Consultation 

The Meeting of Creditors (also called the "Trustee's Meeting," the "Creditors’ Meeting," or the 341 Meeting (after section 341 of the bankruptcy code which requires the meeting) is held between 20 and 40 days after your bankruptcy is filed.  The bankruptcy court schedules the meeting and mails notices to all of your creditors.  However, the bankruptcy judge is prohibited from attending the meeting.  Since there is no judge, the Meeting of Creditors is not a judicial proceeding.  Free Consultation  

The bankruptcy trustee is required examine you under oath and investigate your financial affairs.  The trustee then submits a report to the bankruptcy court and Office of the U.S. Trustee.  The trustee is also required to ask specific questions, including: 

Did you read your schedules before signing them?

Did you list all of your assets?

Did you list all of your debts?

Are your schedules accurate or do you need to make any corrections?

Do you have a domestic support obligation? 

The trustee may also have specific questions concerning your schedules which may involve your assets, income, expenses, debts, or financial transactions.  Your attorney will be present with you to assist you during this examination.  The trustee may also require that you provide information or documents before, during or after the meeting including bank statements, pay stubs, tax returns, vehicle titles, and land ownership and debt documents.  Finally, you are required to provide proof of identity including social security number and a government issued photo I.D. Free Consultation 

Despite the name, the Meeting of Creditors is generally a meeting that no creditors attend.  For most national creditors like Ford Motor Credit or Capital One it is not cost-effective to attend these meetings.  Because the trustee conducts dozens of these meetings on the same day, any creditor questions are limited to only a few minutes.  If the creditor needs additional time, it can ask the bankruptcy court to order the debtor to appear for a further examination between just the creditor and the debtor at a later date. Free Consultation 

Many bankruptcy debtors are very nervous going into the Meeting of Creditors, but soon realize that it is just a procedural formality.  Your bankruptcy attorney will assist you during your meeting, and can answer any questions concerning the Meeting of Creditors or the bankruptcy process. Free Consultation

Just because a relative is older and living on a fixed income does not mean that he or she is also debt-free.  Many older Americans struggle each month to pay unsecured debts from very modest incomes.  The most common forms of unsecured debts are credit cards and medical expenses, and for many of our elderly even a small unsecure debt can be a big financial complication.  Some face the difficult decision to cut back on food, prescription medicine, or home utilities in order to make minimum payments on these debts. 

Many of our elderly try to avoid bankruptcy because they believe that they can pay their obligations with minimum monthly payments.  The unfortunate truth is that it takes many years to pay off even a small high interest debt with minimum monthly payments.  In the meantime a changed interest rate and annual fees can cause that minimum payment to increase.  Additionally, forgotten payments can lead to creditor harassment or lawsuits which can result in a real estate judgment lien and/or an asset seizure. 

Discussing personal bankruptcy with an older loved one can be difficult.  In many cases there is great concern over losing property or income.  The federal bankruptcy laws have changed significantly over the past fifty years and offer great protections for the elderly.  For instance, retirement income and social security are protected from creditor garnishment during bankruptcy.  In most cases all of the bankruptcy debtor’s property is exempt from turnover; however your bankruptcy attorney can discuss any property that may be at risk.  The bankruptcy laws offer many options for retaining property and discharging debts.  After the typical case the unsecured debts are discharged and there is more money available to pay necessary living expenses. 

Another common concern is the embarrassment of bankruptcy.  A personal bankruptcy can is usually a very private legal process.  Friends and family are not contacted and bankruptcy cases are not published in the newspaper. Only creditors and co-debtors receive notice of a personal bankruptcy.  

If an older relative is struggling with debt, discuss the situation with an experienced bankruptcy attorney.  The federal bankruptcy laws contain many protections that shield the assets and incomes of the elderly while discharging burdensome creditors.  Don’t let the stress of credit cards and medical bills tarnish your loved one’s golden years.

A person’s financial situation is often desperate by the time a bankruptcy is filed.  In some circumstances the rent is past due and the debtor is facing eviction.  Fortunately, the bankruptcy laws can help many debtors stay in their homes, at least temporarily. 

Generally, when you file a bankruptcy petition all collection actions are automatically stayed.  The purpose of this stay is to give you some breathing room and time to sort out your financial difficulties.  If you are behind on rent payments, the bankruptcy automatic stays the commencement or continuation of an eviction action.  The automatic stay prohibits your landlord from any attempt to collect rents that accrued prior to the bankruptcy filing date.  Your landlord may not write or call you in an effort to collect these rents, and may not start or continue a lawsuit to evict you.

The bankruptcy automatic stay will not relieve you from your obligation to pay rent after the bankruptcy filing date.  If you fall behind on your rent payments after the bankruptcy is filed, your landlord may evict you regardless of the bankruptcy, but cannot seek payment of past rents.  If you are not behind on rents at the time the bankruptcy case is filed, your landlord is not a creditor and will not receive notice of your bankruptcy filing.  However, you must account for any rent deposit on your bankruptcy schedules. 

In some circumstances a landlord may complain to the bankruptcy court that the tenant is endangering the property or using controlled substances illegally on the property.  The landlord must file a certification to the bankruptcy court and the tenant has 15 days to respond.  The court must hold a hearing within 10 days.  If the landlord is successful in this complaint, the court will lift the automatic stay and allow the eviction process to continue. 

If your landlord has obtained a judgment for possession and order of eviction before you file bankruptcy, the legal process is more complex.  You must deposit one month of rent to the bankruptcy court immediately upon filing the bankruptcy petition along with a certification stating that your landlord’s judgment permits you to stay in the premises upon satisfaction of the entire judgment amount.  This filing stays the eviction process for thirty days.  If you wish to remain longer, the amount stated in the judgment for possession must be paid within the thirty day period. 

Bankruptcy can stop an eviction and give you time to move or make arrangements to stay.  If you are facing eviction from your rental home and contemplating bankruptcy, discuss your situation with an experienced bankruptcy attorney.

There are a surprising number of options for a debtor to retain possession of a vehicle during bankruptcy.  Choosing the best option depends on several factors including your ability to pay and the condition of your vehicle.  In some cases the best financial option is to surrender your vehicle back to the bank and purchase a different one.   

Years ago it was unheard of for a debtor in an active bankruptcy to obtain an auto loan.  Several years ago two companies, 722 Redemption Funding, and Fresh Start Loan Corporation, began making auto loans to debtors in bankruptcy, and now many banks have lending programs for debtors.  The attitude towards bankruptcy has changed and many debtors are evaluated more on their future ability to pay the loan rather than their past financial trouble. 

Obtaining an auto loan during bankruptcy is a matter of showing stable income, a good debt-to-income ratio, and some assurance that your current financial trouble is unusual and not likely to reoccur.  All lenders require a loan application and the criteria for approval can vary significantly.  Some lenders will not approve a loan if you have had a prior repossession.  Other lenders want a substantial down payment.  New auto loans often want the bankruptcy discharged before approving the loan.  In all cases your vehicle choice will be restricted to a newer vehicle with low miles. 

During a Chapter 7 bankruptcy the debtor and the lender are free to negotiate terms outside of the bankruptcy case.  The loan is not a part of the case and is not affected by the bankruptcy discharge.  For Chapter 13 debtors, any new indebtedness must be approved by the trustee and the court.  In most cases the Chapter 13 debtor can obtain approval after a showing of need and ability to pay. 

If you are considering bankruptcy and need to buy a different vehicle, consult with an experienced attorney.  There are many different options during bankruptcy for retaining, refinancing, or purchasing a different vehicle.  Call today and get the information you need to drive your financial future.  

Many students are unable to attend college without federal financial aid.  Fortunately, a bankruptcy filing does not affect a student’s ability to obtain need-based financial aid.  For most students that means Pell Grants and Stafford Loans, both subsidized and unsubsidized.   Your credit is not considered in determining your financial need to receive Pell Grants and Stafford Loans and your bankruptcy filing does not disqualify you from receiving need-based financial aid.  Pell Grants and Stafford Loans are the two most common forms of financial aid to undergraduate college students. 

      Stafford Loans during a Chapter 13 bankruptcy presents a problem for the student.  You will need permission from the bankruptcy trustee and bankruptcy court to incur additional debt.  These requests are handled on a case-by-case basis, so consult with your bankruptcy attorney if you want to take loans to attend school during a Chapter 13 bankruptcy. 

      Credit-based financial aid is a different story.  This type of financial aid includes student loans from private lenders such as Sallie Mae.  Applying for credit-based loans is the same as applying for an unsecured personal loan.  Your credit history is considered and your bankruptcy will play a part in the decision to give you the loan. 

      Your credit is also considered if you are a parent applying for a parent loan like the PLUS (Parental Loan for Undergraduate Students) Loan and the Graduate PLUS (a loan for Graduate students) Loan.  These federally guaranteed parent loans are credit based and federal regulations state that a parent with a bankruptcy within the past five years is automatically disqualified from obtaining a PLUS Loan for his or her child, unless there were extenuating circumstances or the borrower obtains a creditworthy endorser. However, if you are denied a PLUS Loan, your child qualifies for increased unsubsidized Stafford loan limits.  Stafford loans remain in forbearance while the student attends school, while a PLUS Loan is subject to immediate repayment. 

      If you are a student or parent who needs money for school after a bankruptcy, speak with your student financial aid advisor and your bankruptcy attorney.  Bankruptcy can help eliminate your personal debt and free money for college, or college loan repayment.

Although bankruptcy filings are climbing back to the all-time high of 2 million reached in 2005, there is a growing concern that many Americans in need of bankruptcy protection are not filing.  A recent article in USA Today quotes Katherine Porter, associate professor of law at the University of Iowa who says, “[T]he filing rate doesn’t even begin to count the depth of financial pain.” 

Are you hurting financially?  Bankruptcy can help ease that pain. 

Bankruptcy is a federal legal process for declaring an inability to pay your creditors.  When you file bankruptcy you get immediate relief.  The bankruptcy court imposes an “automatic stay” prohibiting creditors from taking collection action against you while the bankruptcy case is pending.  The automatic stay is very powerful and stops lawsuits, wage garnishments, and even foreclosures.  Its purpose is to give the debtor some breathing room and an opportunity to decide how to resolve an overwhelming debt problem. 

There are typically two different types of bankruptcy cases: chapter 7 and chapter 13.  In chapter 7 you eliminate debt without payment while chapter 13 is a repayment plan over three to five years.  At the end of a bankruptcy case the court enters an order discharging eligible debts and permanently prohibits creditors from taking collection action against you. 

In some cases certain debts are not discharged.  The most common types are family support obligations, student loans, and taxes.  However, bankruptcy offers significant relief by discharging other debts and freeing up money to pay the non-discharged debt.  Chapter 13 can also be helpful by allowing payment of the non-dischargeable debt under the supervision of the bankruptcy court and without fear of lawsuits, wage garnishments, or other nasty creditor action. 

The bankruptcy process is very efficient.  For most chapter 7 debtors the case will last a few months and requires one meeting with the bankruptcy trustee.  The cost of bankruptcy is very reasonable compared to the relief that is given. 

During a Chapter 13 bankruptcy you pay your creditors in accordance with your ability to pay.  Some creditors receive 100% of the debt, and others may receive a small sum or nothing at all.  The Bankruptcy Code establishes a priority of debt repayment. 

Administrative claims must be paid 100% and include your filing fee, the trustee’s compensation (3% to 10% of each monthly payment), and your attorney’s fees.  Other debts must be paid 100% during the debtor’s bankruptcy including alimony and child support, most tax debts, and mortgage arrears if you intend to keep you home. 

The lowest category of debt repayment is unsecured creditors.  The amount paid to unsecured creditors (e.g. medical bills, credit cards, and unsecured personal loans) is determined by several factors including (1) the amount of your nonexempt assets; (2) your disposable income; and (3) the length of your plan. 

The length of your plan and amount of your disposable income are largely determined by the Bankruptcy Means Test.  The Means Test was the subject of a recent United States Supreme Court case: Hamilton, Chapter 13 Trustee v. Lanning.  The issue in Hamilton is how a bankruptcy court calculates your ability to pay creditors during the bankruptcy case. 

The 2005 changes to the Bankruptcy Code included a requirement that Chapter 13 debtors commit all "projected disposable income" to the repayment plan.  Confusion arose over whether Congress meant to determine this amount through a mechanical approach, by averaging the debtor's income for the past six months, or whether the determination is “forward looking” and should consider the debtor’s future ability to pay. 

Justice Samuel Alito, writing for an 8-1 majority, said the “forward looking” approach is correct.  The forward-looking approach starts with the debtor's average monthly disposable income for the past six months multiplied by the number of months in a debtor's plan.  This figure is ordinarily the debtor's projected disposable income.  However, in some cases, the Court has authority to review the debtor's actual and present monthly income in order to calculate the debtor’s ability to pay debts during the plan period. 

The Hamilton case will have great impact on Chapter 13 bankruptcy cases and places the power to determine a fair and affordable Chapter 13 payment plan in the hands of the bankruptcy court judges.  If you are in need of bankruptcy relief, but fear that you will be forced to pay a monthly sum you can’t afford, get the facts from an experienced bankruptcy attorney.  Bankruptcy is not a debtor’s prison and has helped millions get a fresh financial start. 

Filing bankruptcy is a difficult decision, but sometimes life dictates choices to us.  Financial disaster can blind-side any of us, like a job loss or medical catastrophe.  Whatever the reason, individuals occasionally need the protections of the federal bankruptcy laws a second time. 

An individual can ordinarily file a bankruptcy case at anytime, however there may be restrictions on the relief that is available.  The most common restriction is the eligibility to receive a bankruptcy discharge.  To receive a Chapter 7 discharge, you must file your case eight (8) years after your previous Chapter 7 case was filed, or six (6) years after your Chapter 13 case was filed.  To receive a Chapter 13 discharge, you must file your case four (4) years after your previous Chapter 7 case was filed, or two (2) years after your Chapter 13 case was filed. 

In some cases, receiving a bankruptcy discharge may not be important to the debtor.  For instance, if a debtor has a non-dischargeable debt like child support or taxes that must be paid, bankruptcy can offer an organized process for payment while the debtor retains some control. 

Another less common restriction concerns the automatic stay.  If your bankruptcy case is dismissed within the past year, the bankruptcy court assumes that your second bankruptcy is filed in bad faith. The automatic stay will only apply for 30 days after your second filing. A hearing is required to extend the automatic stay and you must convince the court that you have filed in “good faith.”  If you file two or more cases within the past years, you must petition the bankruptcy court for a stay – it is not automatic for any period of time. 

Finally, you are not eligible to file at all if your case was dismissed by the bankruptcy court within 180 days due to a willful failure to obey an order of the bankruptcy court, or if your case was voluntarily dismissed after a creditor sought to lift the automatic stay to enforce a lien against your property. 

Filing a second bankruptcy is not uncommon.  Congress has established a few additional rules to deter abusive serial filers, but bankruptcy protection is available for the honest yet unfortunate debtor.  If you need assistance with filing a second bankruptcy case, contact an experienced bankruptcy attorney and get the relief you need.

In a Chapter 13 bankruptcy case the debtor proposes a plan to pay back creditors.  That plan is composed of monthly payments to satisfy all or part of the creditors' claims over three to five years.  Monthly payments are made to the Chapter 13 Trustee, who then pays your creditors. 

There is often confusion over when the first plan payment due. Section 1326 of the Bankruptcy Code directs that the first payment must be made within 30 days after filing the bankruptcy case, even if the debtor’s bankruptcy plan has not yet been approved by the court.  Often the first meeting with the Trustee (also known as the "341 meeting" or "meeting of creditors") is scheduled more than 30 days after the filing date, so the Trustee expects your first payment before that meeting.  The Trustee will hold all payments until the plan is approved by the Bankruptcy Court (called "confirmation"), and then make distributions to creditors. 

It is critical that you make this initial payment within thirty days after filing.  It is especially important to monitor the status of this first payment when you have instructed your employer to pay the Trustee from your wages.  It is your responsibility to ensure that this first payment is made, and neither the Trustee nor the Bankruptcy Court gives much latitude to a debtor who misses the first deadline in the case. 

Bankruptcy is a powerful tool for eliminating personal debt. It is important to know what bankruptcy can do for you, and what it cannot.

What Bankruptcy Can Do:

Bankruptcy can eliminate your personal obligation on many unsecured debts. For many debtors this is the most important benefit of bankruptcy. Most credit cards and medical bills can be discharged during bankruptcy and you will never worry about them again.

Bankruptcy can stop creditor collection activities and harassment. When a bankruptcy is filed, all collection activity must stop. After a debt is discharged at the end of your bankruptcy case, the creditor is prohibited from contacting you to collect on that debt.

Bankruptcy can stop a foreclosure or repossession. In a Chapter 7 bankruptcy the debtor is given time to negotiate an agreement with the creditor, or prepare to walk-away from the debt and surrender a home or vehicle. In a Chapter 13, the debtor can also surrender property back to the creditor, or force the creditor to accept payments to cure an arrearage and resume monthly payments.

Bankruptcy can protect personal assets. Ordinary household goods, certain equity in vehicles or a family home, and retirement accounts are all protected during a bankruptcy. Statistically only 1 in 20 debtors lose anything, and your bankruptcy attorney can advise you of any property that is at risk in advance of the filing.

Bankruptcy can strip away certain liens. Many loans that are secured with an item you previously owned (called a Non-Purchase-Money Security Interest) can be stripped away during bankruptcy. Under certain circumstances a second mortgage can be stripped and made an unsecured debt (and eligible for discharged).

What Bankruptcy Cannot Do:

Bankruptcy cannot allow you to keep secured property without payment. While there are exceptions, generally if you do not pay for a secured property (e.g. car or house), the property must be returned to the secured creditor.

Bankruptcy cannot eliminate certain types of debts. The Bankruptcy Code lists debts that cannot be discharged such as student loans, certain taxes, and child support obligations. However, every situation is different and many of these “non-dischargeable debts” can be discharged under certain circumstances. Your bankruptcy attorney can discuss your individual situation and options for eliminating your debts.

The goal of the federal bankruptcy laws is to give the debtor a fresh start on a new financial future. There are many powerful legal options available in bankruptcy to eliminate or reduce overwhelming debt. An experienced bankruptcy attorney can explain your options and guide you to your fresh start.

Bankruptcy is a federal legal process for declaring an inability of an individual or organization to pay its creditors. The United States Constitution authorizes the bankruptcy laws and federal laws govern all bankruptcy cases.

One stated purpose of the federal bankruptcy laws is to give the debtor a financial "fresh start." At the end of most cases the bankruptcy judge will discharge certain debts and release the debtor from personal liability.

The bankruptcy laws are meant to give the honest debtor a fresh start, but not a head start. Therefore, Congress has identified certain debts that cannot be discharged in a bankruptcy. Many debts that would ordinarily qualify for discharge may be determined as non-dischargeable if a debtor has committed a crime or fraud in acquiring the debt. Other debts are deemed generally non-dischargeable based on public policy reasons (like taxes or child support).

Generally, the following are non-dischargeable debts:

1. child support or alimony obligations, and debts considered in the nature of support;
2. student loans, unless repayment would cause you undue hardship;
3. criminal fines or restitution;
4. debts listed in a prior bankruptcy where debtor was denied a discharge;
5. recent income taxes less than three years past due; and
6. auto accident claims involving intoxication.

Additionally, there are circumstances which may make a debt non-dischargeable:

1. debts incurred on the basis of fraud;
2. debts from willful or malicious injury to another or another's property;
3. recent purchases with credit cards;
4. debts from larceny (theft), breach of trust or embezzlement; and
5. most federal, state and local taxes and any money borrowed on a credit card to pay those taxes.

All of the categories of non-dischargeable debts in bankruptcy have specific rules and exceptions and each situation has its own challenges. If you have a debt that may fall into a non-dischargeable category, discuss your situation with a qualified bankruptcy attorney and learn your options. Your attorney can provide options for managing, repaying, or discharging the debt.

Student loans are extremely difficult to discharge in bankruptcy. The bankruptcy code states that a debtor may obtain a discharge of a government-sponsored student loan only if repaying the debt would impose an “undue hardship” on the debtor and his dependents.

Proving undue hardship is more difficult than it sounds. The bankruptcy code requires the debtor to file an adversary action and have a hearing to determine whether repayment of the debt would constitute an undue hardship. At that hearing the bankruptcy court may require proof that: 1) the debtor cannot maintain a minimal standard of living and also repay the loan; 2) the debtor’s financial inability to repay the loan is likely to continue for a significant portion of the loan’s repayment period; and 3) the debtor has made a good faith effort to repay the loan. If the debtor is successful in proving undue hardship, the student loan debt will be discharged by the bankruptcy court.

Even though the bar for discharging student loans is set extremely high, it is often equally challenging for a creditor to “prove” its debt during a Chapter 13 bankruptcy case. The Chapter 13 claims process may be used by the debtor to obtain a judicial determination of what is owed. A student loan is a contract and the debtor may ask the creditor to produce the contract, to prove that the current creditor has standing to collect on the loan, and prove the current amount owed. During the claims process the burden is on the creditor to prove both that you owe the debt as well as the amount. This may be difficult for a creditor if the loan has changed hands multiple times.

While discharging your student loans may be difficult, the bankruptcy laws offer several benefits including temporary relief from the bankruptcy automatic stay and a chance to make payments through a court supervised Chapter 13 plan. Additionally, non-bankruptcy options are available including deferment, forbearance, loan forgiveness, and income contingent repayment plans. If you are experiencing financial difficulty and have student loans, consult with an experienced bankruptcy attorney and discover your options.

In an episode of television’s “The Office,” the main character Michael Scott makes a misguided attempt to resolve his debt problems by publically stating, “I. . . declare. . . bankruptcy!” Video clips of this funny episode can be found on YouTube.

Back in the real world, declaring bankruptcy is not nearly as public, or as simple, as shouting out “I declare bankruptcy!” The bankruptcy process begins with an accounting of your income, expenses, assets, and debts. The debtor is required to use approved forms for this financial accounting. A copy of these forms can be found on the U.S. Courts website, and a general description of each form that must be filed in all consumer debtor Chapter 7 and 13 cases is provided below.

The Voluntary Petition is three pages long and is the formal declaration of bankruptcy. Filing the Voluntary Petition begins the bankruptcy process and imposes the automatic stay which will generally stop action by creditors to collect debts.

Schedule A is a list of real property.

Schedule B is a list of personal property.

Schedule C is a list of property the debtor claims as exempt.

Schedule D is a list of creditors holding secured claims.

Schedule E is a list of creditors holding unsecured priority claims.

Schedule F is a list of creditors holding unsecured nonpriority claims.

Schedule G is a list of the debtor’s executory contracts and unexpired leases.

Schedule H is a list of codebtors in the bankruptcy.

Schedule I lists the debtor’s monthly income.

Schedule J lists the debtor’s monthly expenses.

The debtor must sign a Declaration that the above schedules are accurate to the best of his or her knowledge, information, and belief.

The debtor must file a Statement of Financial Affairs. This form provides a summary of the debtor's financial history, transactions, and operations over certain time periods before the case is filed. There are 18 separate items on this form:
1. Income from Employment or Operation of Business
2. Income Other than from Employment or Operation of Business
3. Payments to Creditors
4. Suits, Administrative Proceedings, Executions, Garnishments, and Attachments
5. Repossessions, Foreclosures, and Returns
6. Assignments and Receiverships
7. Gifts
8. Losses
9. Payments Related to Debt Counseling or Bankruptcy
10. Other Transfers
11. Closed Financial Accounts
12. Safe Deposit Boxes
13. Setoffs
14. Property Held for Another Person
15. Prior Address of Debtor
16. Spouses and Former Spouses
17. Environmental Information
18. Nature, Location, and Name of Business

Finally, the debtor must file either a Statement of Current Monthly Income and Means Test Calculation in a Chapter 7 case, or a Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income in a Chapter 13 case.

The success of your bankruptcy largely depends on the accuracy of these forms and the skill that your bankruptcy attorney applies in crafting these financial reports. Don’t leave your financial future to chance! Seek out an experienced bankruptcy attorney to complete these forms and advise you on the best course of action to resolve your financial problems.
 

The bankruptcy means test is a calculation designed to identify debtors who can afford to pay some of their unsecured debts (for instance, credit card debt) and encourage repayment of these debts through a Chapter 13 repayment plan. The first part of the means test determines whether your current monthly income is less than your state’s median income for a household of your size.

If your family’s income is less than your state’s median income for a family of your size, you PASS the means test. There is no other testing and you can proceed with a Chapter 7 bankruptcy. The current state median income figures can be found at the U.S. Trustee’s website: http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm.

If your family’s income is more than your state’s median income, you must complete the means test worksheet to calculate if you have (or should have) money to repay unsecured creditors. In the end if you are able to pay a significant portion of your unsecured debt, you will FAIL the means test and cannot file a Chapter 7 bankruptcy.

The truth is that most debtors pass the means test without any difficulty based upon their income. Others pass the means test after a skilled bankruptcy attorney has examined your income sources and made certain elections in completing the calculation. That is not to say that the test can be manipulated! On the contrary, the skilled bankruptcy attorney will work within the bankruptcy statutes, rules, case law, and local interpretations (which can vary a great deal among jurisdictions!) to obtain the best result from the means test.

If you would like to “test-drive” the means test, Nolo Publishing has a free on-line calculator. The Nolo calculator uses the language and formatting of Official Form B 22A, the means test form required in Chapter 7 bankruptcy cases. Be warned: passing the means test can be complex and is more than simply crunching numbers!

If you have questions or concerns about passing the means test, seek out competent legal advice. An experienced bankruptcy attorney can guide you through the means test to reach the best possible result for your circumstances.
 

A Chapter 13 bankruptcy is a repayment plan that lasts three to five years. During that time the debtor is required to devote all disposable income to the repayment of debt. Most bankruptcy trustees and courts consider tax refunds part of the debtor’s disposable income that is over-withheld and should be paid into the Chapter 13 plan. However, instead of reducing the amount payable under the debtor’s plan, tax refund money is paid to unsecured creditors that would otherwise not be paid. If the debtor is paying a 100% repayment plan, the trustee will not request turnover of any tax refunds.

Some courts have approved a provision in the Chapter 13 plan that requires the Internal Revenue Service to forward any tax refund to the trustee’s office. However, at least one bankruptcy court has found this practice to be unlawful. In United States v. Carroll, No. 2:09-cv-13505 (E.D.Mich. Jan. 20, 2010), the bankruptcy court concluded that the IRS was not a party to the debtor’s chapter 13 case and did not have an opportunity to object to the plan. Additionally, as a part of the United States government the IRS possesses sovereign immunity that it did not waive.

Keeping your money and avoiding an income tax turnover may be as simple as adjusting your paycheck withholding. By speaking to a tax professional you may be able to predict your tax liability and put more money in your pocket each payday. However, be careful to avoid a situation where you do not withhold enough taxes and end up with a large tax bill at the end of the year.

If your tax refund is largely due to an Earned Income Tax Credit (EITC), the IRS allows tax payers to request an advance payment of the EITC. Information regarding this advance payment program can be found on the IRS website.   If you qualify, your employer will add additional money to your take-home pay each paycheck.

If you want to avoiding surprises during your Chapter 13 bankruptcy, seek out and hire an experienced bankruptcy attorney. An experienced bankruptcy attorney can discuss your financial situation with you and help you keep your hard-earned money for your family.

In order to be confirmed, a Chapter 13 repayment plan must meet the Best Interest Test.

The Best Interest Test is found in Section 1325(a)(4) of the bankruptcy code. It requires that your unsecured creditors receive at least as much under the Chapter 13 repayment plan as they would have under a Chapter 7 liquidation. Essentially, the goal is to make sure that your creditors are no worse off under Chapter 13 bankruptcy than they would have been under a Chapter 7 bankruptcy.

To understand how the Best Interest Test works, you must first understand how a Chapter 7 liquidation works. In a Chapter 7 bankruptcy, your nonexempt property is liquidated and sold. The proceeds from the sale are used to pay back as much of your debt as possible.

When you file for Chapter 13 bankruptcy, a hypothetical Chapter 7 liquidation is performed to determine how much your creditors would have received. The amount they receive under your Chapter 13 repayment plan must be at least equal to this amount.

Quite often a debtor is determined to have no assets, so the unsecured creditors would have received nothing under a Chapter 7 liquidation. Of course, this does not actually mean that the debtor has no assets at all. Rather, it means that the assets the debtor does have are all protected from liquidation through exemptions.

In these cases, it is proper for the debtor’s unsecured creditors to receive nothing under the Chapter 13 repayment plan, and the plan will be approved provided that it is offered in good faith and passes the disposable income test.

A lot can happen during a Chapter 13 repayment plan which generally lasts three to five years. Sometimes large debts are incurred that the debtor is unable to pay. Fortunately, a Chapter 13 debtor is able to discharge a post-petition debt, but only after certain prerequisites are met.

First, the debtor must amend the repayment plan to provide for a post-petition debt. Second, the debtor must usually obtain the approval of the bankruptcy trustee prior to incurring the debt. This is not always obtainable, especially in the case of a large medical bill. Third, the creditor must voluntarily choose to file a proof of claim. And finally, the claim must either be a tax claim, or a claim for a consumer debt necessary for the completion of the debtor’s plan.

A common situation in which post-petition debts arise in a Chapter 13 case is where the debtor needs to purchase a different automobile. Repaying a post-petition car loan through a Chapter 13 plan is easily accomplished through coordination and cooperation from the trustee, the lender, and the court. The lender agrees to be paid by the trustee, the trustee agrees to sanction the debt, and the court approves the amended plan allowing the lender to be paid through the bankruptcy plan. 

In some cases it may not be practical to include a post-petition debt in the debtor’s Chapter 13 plan. In that case, the debtor may elect to convert the Chapter 13 case to one under Chapter 7. The Bankruptcy Code states that a debt that arises after the Chapter 13 filing date, but before the debtor’s conversion to Chapter 7, is to be treated as a pre-petition debt. The Chapter 13 restrictions and requirements listed in the preceding paragraph do not apply to debts in a conversion case. 

The Bankruptcy Code contains many flexible options for reorganizing your finances and dealing with your creditors. Even when there is an unexpected event that results in a debt, your bankruptcy attorney can provide you with choices for dealing with a post-petition debt.

There’s a common misconception that a Chapter 13 bankruptcy will require you to pay back all of your debts in full. Quite the opposite is true. In many cases, the debtor’s unsecured debts are considerably reduced, with the debtor paying back only a percentage of what is owed.

Chapter 13 bankruptcy is essentially a debt repayment plan. The amount of debt you are required to repay depends on your disposable income and the value of your assets. For many petitioners, what they are required to pay back through their Chapter 13 debt repayment plan will be substantially less than what they currently owe.

An experienced Texas bankruptcy attorney can help you understand Chapter 13 bankruptcy and the effect that it will have on your debt.

A Chapter 7 bankruptcy debtor receives a discharge and the case closes generally within four to six months. Chapter 13 is a repayment plan that lasts three to five years. Why in the world would anyone choose to file Chapter 13? Below are five reasons why Chapter 13 may make sense:

Reason 1: A Forced Repayment Plan under Court Protection.

When a creditor is unwilling to work with you, a Chapter 13 can force the creditor to accept payments on your terms. Some debts, like child-support or taxes, are non-dischargeable through bankruptcy and must be paid. Chapter 13 allows the debtor to propose a three to five year repayment plan according to what you are able to pay. During this time the creditor is not allowed to take any collection action without permission of the bankruptcy court.

Reason 2: The Cram Down. 

In some cases a vehicle or other secured loan can be reduced to the value of the collateral. The debtor retains the property, but may pay a lower monthly payment and less in principle and/or interest. The loan term may be also lengthened or shortened in a Chapter 13.

Reason 3: Curing Home Loan Defaults and Lien Stripping

A debtor who has defaulted on a home loan can stop a foreclosure action and force the creditor to accept payments on the arrearage. Some debtors can receive a substantial benefit by stripping away a second or third mortgage.

Reason 4: The Effect of Bankruptcy May Be Shortened

While the federal law states that bankruptcy information can remain on your credit report for up to ten years, the “big three” credit reporting bureaus (Experian, Equifax, and Trans Union) will generally remove chapter 13 information seven years after the filing date. That means the bankruptcy will drop off your credit report two to four years after your last Chapter 13 payment!

Reason 5: Retain Non-Exempt Property

In some cases, a debtor may own property with equity that cannot be protected. Say, for instance, that the debtor owns a Harley Davidson motorcycle free-and-clear and the non-exempt equity is $10,000. In a Chapter 7 case the trustee will want either the motorcycle to sell, or a cash payment of $10,000 from the debtor. In a Chapter 13 the debtor does not lose the motorcycle, but will pay $10,000 through the bankruptcy plan to unsecured creditors over three to five years. 

Deciding between Chapter 13 and Chapter 7 requires careful deliberation. An experienced bankruptcy attorney can discuss the pros and cons of each bankruptcy chapter and help guide you to a healthy and successful fresh start.

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.

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.

One of the main criteria that determines whether you are eligible to file Chapter 13 bankruptcy is the amount of debt you currently have. To be eligible to file Chapter 13 bankruptcy, you must have less than $336,900 in unsecured debt and less than $1,010,650 in secured debt.

In order to file for Chapter 13 bankruptcy, you must also reside in the United States and have a regular income. Specifically, you must be able to show the court that you have sufficient income to meet your repayment obligations. Additionally, you must have received credit counseling within the preceding 180 days.

Other criteria that must be met in order to file for Chapter 13 bankruptcy are:

• You must not have been granted a Chapter 7 bankruptcy discharge in the past 4 years.
• You must not have been granted a Chapter 13 bankruptcy discharge in the past 2 years.
• You cannot have had a bankruptcy petition dismissed within the past 180 days because of failure to appear before the court, failure to comply with a court order or a voluntary dismissal after your creditors tried to recover property through the bankruptcy court.
• You must have filed both your federal and state income tax returns for the four years preceding your bankruptcy filing date.

To find out if you are eligible to file for Chapter 13 bankruptcy, contact the bankruptcy attorneys of Fears | Nachawati today. To receive free legal advice on bankruptcy, email us or phone us toll free at 1.866.705.7584.

Individuals facing a financial crisis are concerned that by filing Chapter 13 they will lose their home to repay debts. In a Chapter 13 bankruptcy, you don't have to give up any property, but you are required to use your income to pay some or all of your debt over time. Depending on the size of your debts and income it can take from three to five years.

The most important part of your Chapter 13 paperwork will be the repayment plan as this will list the secured and unsecured debt you have. Your repayment plan needs to be carefully drawn up to show how much you will pay towards your secured and unsecured debts. The plan must show any disposable income you have left after making required payments on secured debt. You also need to demonstrate how much will go towards repaying your unsecured debts, such as credit card or medical bills. Many times you will not have to pay your unsecured debt or will only have to pay pennies on the dollar.

Contact us today for further information on what qualifies as unsecured debt by calling Fears | Nachawati at toll free 1.866.705.7584 or e-mail us at info@fnlawfirm.com.

The U.S. Department of Labor reports that since December of 2007 the economy has shed more than eight million payroll jobs. The number of unemployed workers has surged from 7.5 million to 15.7 million, and 36 percent have been out of work longer than six months. Many struggling families are unable to meet their monthly financial obligations and are filing for bankruptcy protection. The American Bankruptcy Institute reports that 135,914 consumers filed for bankruptcy in October, and total bankruptcies are projected to exceed 1.4 million in 2009, the highest figure in four years.

The recession has forced bankruptcy courts to examine the effect of unemployment on bankruptcy cases. The most challenging issue is whether an unemployed debtor can qualify for a Chapter 7 case, or if the debtor must file a Chapter 13 repayment plan case. The touchstone for determining this answer is the bankruptcy Means Test, which makes certain presumptions about the debtor’s finances and projects the debtor's ability to pay debts based upon a historical six month average. Failing the Means Test means that the debtor is presumed to be able to repay some of the debts during a Chapter 13 bankruptcy.

Calculating the six month average income can be tricky when dealing with a recently unemployed individual. First, income has usually sharply decreased and the actual present monthly income is considerably less than the six month average calculated by the Means Test. Fortunately, most bankruptcy trustees and judges are compassionate when a debtor has lost a job, and this presumption of repayment may be rebutted by evidence by the debtor of the involuntary reduction of income, actual current income, employment status, etc.

Second, the Means Test income calculation includes any bonus or severance pay received during the six month period prior to the bankruptcy filing. This additional money may result in an inflated and inaccurate income calculation. Again, the presumption of an ability to repay can be rebutted, but the trustee and the bankruptcy court will require detailed financial records regarding how this money was spent.

Third, unemployed debtors often receive unemployment compensation pay. How unemployment benefits are applied in calculating current monthly income under the Means Test differs from one jurisdiction to another. The issue turns on whether the unemployment compensation is a benefit received under the Social Security Act and is therefore excluded from a debtor’s income calculation. Some courts have held that unemployment compensation is a benefit received under the Social Security Act and are excluded from the debtor’s current monthly income. See In re Munger, 370 B.R. 21 (Bankr.D.Mass. 2007): In re Sorrell, 359 B.R. 167 (Bankr.S.D.Ohio 2007). Other courts find unemployment benefits are not excluded. See In re Kucharz, No. 09-81258 (Bankr. C.D. Ill. 10/28/2009); In re Baden, 396 B.R. 617 (Bankr.M.D.Pa. 2008).

If your family has experienced an involuntary job loss and are struggling to make ends meet, consider your options. An experienced bankruptcy attorney can explain how the bankruptcy laws may help you restructure your finances and live within your means.

To receive free legal advice on bankruptcy, contact Fears | Nachawati today. Simply email us at info@fnlawfirm.com or call our toll-free number at 1.866.705.7584.

Residents living in Texas are subject to wage garnishment by the IRS. The IRS commonly uses wage garnishment as a way to collect taxes and penalties that are owed. A wage garnishment requires an individual’s employer to withhold a portion of the taxpayer's pay each period and send it to the IRS. In most cases, the individual is not left with enough money each month to pay basic living expenses. A wage garnishment will remain in effect until the taxes and penalties owed are paid in full or until a wage garnishment release is issued.

The only other time the wage garnishment can be stopped for a debt to the IRS (or any  other creditor) is to file for bankruptcy. When you file for bankruptcy, an automatic stay is put in effect. This means that all garnishments, liens or other collection activity by the IRS and creditors will stop immediately. In some cases, you may even be able to get back some of the wages that were garnished.

For more information on how a bankruptcy can help you put an end to wage garnishment, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com.

A family’s retirement fund represents years of hard work and sacrifice. When severe financial trouble plagues a household, losing the family nest egg is a serious concern. Fortunately, Congress has provided substantial protections in the bankruptcy laws that safeguard retirement accounts during financial crisis.

It is important to recognize that in a Chapter 13 bankruptcy assets (including retirement funds) are not taken from the debtor.  Most Chapter 13 plans are funded from earned income, and retirement funds are used only with the voluntary consent of the debtor. During a Chapter 7 bankruptcy case retirement funds are generally safe as they are either exempt or not part of the bankruptcy estate.

Congress has declared that certain retirement funds are exempt from creditors during a Chapter 7 bankruptcy case. These funds include retirement accounts classified under sections 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code. These sections cover most retirement plans and include pension plans, profit sharing plans, stock bonus plans, employee annuities, IRAs, Roth IRAs, government deferred compensation plans, plans of tax exempt organizations, and certain trusts.  The laws exempt these funds to over a million dollars for each debtor.

The bankruptcy laws further protect retirement accounts by providing that retirement funds not otherwise exempt are protected if they are necessary for the support of the debtor and the debtor’s dependents. The bankruptcy laws also protect certain retirement accounts subject to title 1 of ERISA, 457 deferred compensation plans, 403(b) tax deferred annuities, and health insurance plans regulated by state law.

The federal bankruptcy laws provide many ways to protect your retirement accounts during bankruptcy. The key is to identify the type of account and the corresponding protection prior to filing the bankruptcy case. As always, consult with an experienced bankruptcy attorney prior to taking any action to either move retirement funds, make contributions, or take withdrawals as these actions may impair your attorney’s ability to protect your retirement account.

Contact Fears | Nachawati today for a free consultation to discuss bankruptcy and protecting your retirement accounts.  Call us toll free at 1.866.705.7584 or by e-mail at info@fnlawfirm.com. 

If you are paying child support, you may be confused about the effect of a bankruptcy filing on your child support obligation. A bankruptcy filing generally protects the debtor from the collection actions by creditors, but Congress has not extended the same protections to child support issues. Under the bankruptcy laws child support is a “non dischargeable debt” which means that the obligation will survive the bankruptcy, regardless whether it is a current or past debt.

The bankruptcy automatic stay does not apply:

(1) to the establishment of a child support obligation;

(2) to the collection of child support from property that is not property of the estate; or

(3) to the withholding of income that is property of the estate for payment of a child support obligation under a judicial or administrative order or statute.

In “non-lawyer speak,” child support collection actions are generally not halted by filing bankruptcy. Additionally, filing a bankruptcy case does not stop a tax intercept for the payment of child support arrears.

Domestic support obligations, including child support obligations, receive top payment priority when funds are available to pay creditors in a Chapter 7 case.  In a Chapter 13 case, child support arrears are paid through a “repayment plan” and are paid as a first priority. Support payments due after the bankruptcy filing date must be kept current or the debtor’s plan will not be confirmed, and the bankruptcy court will not issue a discharge in a case where child support is owed.

In addition to child support, debts that are “in the nature of support” (e.g. medical expenses, educational expenses, etc.) are ineligible for discharge. The bottom line is: child support obligations must be paid. Fortunately, the bankruptcy laws offer options to make the debtor’s payment burden more bearable. However, a debtor’s child support obligation is often a difficult legal situation that requires expert guidance. If you have a child support obligation and are considering filing bankruptcy, consult with an experienced bankruptcy attorney and discuss your options.  Contact Fears | Nachawati for a free consultation at toll free 1.866.705.7584 or e-mail us at info@fnlawfirm.com. 

“Will filing bankruptcy ruin my credit?” This is a common question asked by individuals contemplating a bankruptcy filing. Usually this question is answered by asking another question, “If you are considering bankruptcy, isn’t your credit already ruined?”

Individuals in serious financial crisis generally wait too long before seeking assistance. A recent survey by the Consumer Bankruptcy Project, a continuing study of consumer bankruptcy filings, found that over 40 percent of individuals said they struggled with financial difficulty for more than two years before filing bankruptcy.

If you are facing a serious financial crisis, it is in your best interest to educate yourself and to identify your financial options. Waiting can only exacerbate the situation. Sometimes individuals try to “save the sinking ship” by taking on more debt (e.g. a home equity loan) to solve their debt crisis. Others empty their retirement accounts to pay down short-term debt. These tactics are short-term solutions and will rob your family of its future financial health. Even sadder is that many individuals discover that their quick fix solutions did not solve their financial problems – only now they are facing bankruptcy with no equity in their home, or without a retirement account.

A bankruptcy filing will stay on your credit report for ten years and may have a detrimental impact on your ability to borrow money (at least in the short run). However, bankruptcy will also lighten your debt load significantly and give you a second chance to arrange your finances in a way that is manageable for years to come.  If you are facing serious financial difficulties, speak to an experienced bankruptcy attorney before taking a quick fix route just to save your credit score. Don’t be “penny wise and pound foolish.”

Contact Fears | Nachawati today for a free consultation regarding you financial situation.  Call our toll free number at 1.866.705.7584 or e-mail us at info@fnlawfirm.com. 

A chapter 13 bankruptcy is also called a “reorganization plan” or a “wage earner's plan.” A debtor who files a chapter 13 bankruptcy intends to repay all or part of her debts in installments to creditors over three to five years. The individual’s repayment plan term cannot exceed five years.

There are a number of advantages that chapter 13 affords to debtors. The most significant is the ability to stop a home foreclosure and force the creditor to accept payments for any delinquent mortgage payments. The bankruptcy automatic stay stops foreclosure proceedings immediately upon the debtor’s bankruptcy filing with the court. However, this temporary relief may be lost if the debtor fails to make the regular mortgage payments that come due after the chapter 13 filing.

Another advantage of chapter 13 bankruptcy is that a debtor may modify a secured loan and repay it over the plan term. This usually lowers the monthly payment. In certain circumstances the debtor can also “cram-down” the secured loan by stripping away the unsecured portion of a debt. For example, a debtor may owe $20,000 on a car that is only worth $10,000. Chapter 13 may allow the debtor to modify this loan and only pay the creditor the value of the car, or $10,000. There are special qualifying rules for this type of modification, so be sure to discuss your situation with your attorney.

Within 15 days of the filing of the chapter 13 bankruptcy petition, the debtor must file a proposed repayment plan with the court. The plan is also sent to the U.S. trustee and all creditors for review and opportunity to object. The plan must provide for regular fixed payments to the trustee who then distributes the funds to creditors according to the terms of the plan (which may be less than full payment on their claims). It is common for a chapter 13 plan to propose to pay secured creditors in full and nothing to unsecured creditors. This largely depends on whether there is “extra” money at the end of the month after the debtor’s secured creditors and monthly expenses are paid.

Occasionally circumstances change after confirmation of the chapter 13 plan that prevents the debtor from completing the repayment plan. The debtor may ask the court to allow the debtor to modify the plan, or to grant a “hardship discharge” and end the case early. Otherwise, at the end of the three to five year repayment period the court will discharge the debtor’s remaining debts that are not “non-dischargeable” by law. The chapter 13 bankruptcy discharge prevents those creditors from seeking payment from the debtor.   

If you are over-burdened with secured debts and are in need of relief, consult with an experienced bankruptcy attorney about your rights under chapter 13 of the bankruptcy code.

The Means Test is a formula designed to identify debtors that can afford to pay some of their unsecured debts (for instance, credit card debt) and encourage repayment of these debts through a Chapter 13 repayment plan. Debtors that “fail” the Means Test are disqualified from filing Chapter 7 bankruptcy.

The Means Test is actually two tests. The first part of determines whether your current monthly income is less than your state’s median income for a household of your size. The current state median income figures can be found at the U.S. Trustee’s website: http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm

If your family’s income is less than your state’s median income for a family of your size, you PASS the Means Test. There is no other testing and you can proceed with a Chapter 7 bankruptcy.

If your family’s income is more than your state’s median income, you must complete the Means Test worksheet to calculate if you have (or should have) money to repay unsecured creditors. In the end if you are able to pay a significant portion of your unsecured debt, you will FAIL the Means Test and cannot file a Chapter 7 bankruptcy.

The truth is that very few debtors fail the Means Test. Many debtors earn significant incomes and still qualify for Chapter 7 bankruptcy. Debtors with large monthly secured debt payments (e.g. house, car) often pass the Means Test as there is no extra money at the end of the month to pay unsecured creditors.

If you are contemplating a bankruptcy filing, it is in your best interest to consult with an experienced bankruptcy attorney as soon as practical. The Means Test is a new and complex feature of the bankruptcy laws, and, consequently, its application and interpretation varies from jurisdiction to jurisdiction. By examining your case early, a skilled bankruptcy attorney can identify whether you are able to pass the Means Test now or in the future.  To speak with a skilled bankruptcy attorney simply call Fears | Nachawati toll free at 1.866.705.7584 or e-mail us at info@fnlawfirm.com. 

The “Co-Debtor Stay,” also known as the “Co-Debtor Automatic Stay,” is a feature of a Chapter 13 Bankruptcy designed to protect a debtor by insulating him from indirect pressures from his creditors exerted through friends or relatives.  The Co-Debtor Stay stops all collection actions against any individual who is obligated on a consumer debt owed by the debtor. The Co-Debtor Stay continues until the Chapter 13 case has concluded.

The Co-Debtor Stay is not a direct protection intended for the co-debtor. The debtor’s Chapter 13 Bankruptcy will not discharge the co-debtor’s responsibilities to the creditor. It will, however, prevent collection action by the creditor against the co-debtor (e.g. lien perfection or even adverse notation on the co-debtor’s credit report) during the pendency of the Chapter 13 case. 

The Co-Debtor Stay does not prohibit collection on a debt incurred in the ordinary course of business by the debtor. Additionally, tax debt is generally not considered a consumer debt. It is important to note that the Co-Debtor Stay does not apply at all to Chapter 7 Bankruptcy cases.

The Co-Debtor Stay is effective immediately upon the filing of the debtor’s Chapter 13 petition and continues until the case is closed, dismissed, or converted to Chapter 7 or 11. The Bankruptcy Court can also modify or terminate the Co-Debtor Stay upon the motion of a creditor. The creditor may be successful in this type of motion if the codebtor received "consideration" for the debt (e.g. you cosigned a car loan for your brother, who actually owns the car), if the debtor’s Chapter 13 plan proposes to not pay the debt, or if the creditor's interests would be irreparably harmed by continuation of the Co-Debtor Stay.

A knowing violation of the Co-Debtor Stay is contempt of court and punishable by damages, including attorney's fees.  Any collection action taken by a creditor in violation of the co-debtor stay is void.

The Co-Debtor Stay is a powerful tool to prevent collection action in Chapter 13 Bankruptcy. If you are contemplating a bankruptcy filing and have co-debtors, consult with an experienced bankruptcy attorney. An experienced bankruptcy attorney can explain your options and work with you to find the best result.  For a free consultation with an attorney at Fears | Nachawati regarding your bankruptcy options simply call toll-free 1.866.705.7584 or e-mail info@fnlawfirm.com. 

The principal theory of consumer bankruptcy in America is that it provides a “fresh start” to debtors. A prime example of this policy is found in the 1918 Supreme Court case of Stellwagen v. Clum in which the Court stated:

“This purpose of the act has been again and again emphasized by the courts as being of public, as well as private, interest, in that it gives to the honest but unfortunate debtor . . . a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”

The idea of giving a poor, but honest debtor a “fresh start” is not a modern concept. The Bible also contains debt forgiveness laws:

“At the end of every seven years you shall grant a release of debts. And this is the form of the release: Every creditor who has lent anything to his neighbor shall release it; he shall not require it of his neighbor or his brother, because it is called the Lord's release.” Deuteronomy 15:1-2.

Under modern bankruptcy law a debtor is entitled to a Chapter 7 bankruptcy discharge once every eight years. However, this is not a clean slate. A Chapter 7 bankruptcy can stay on your credit report up to 10 years, and you may encounter other obstacles after filing bankruptcy (e.g. obtaining credit). Several bankruptcy courts have described the Chapter 7 discharge as giving honest but unfortunate debtor a fresh start, not a head start.

Bankruptcy is a safety net when you are at the end of your rope. The Chapter 7 discharge provides a second chance and a new beginning free of creditor harassment. If you are burdened with debt, consult with an experienced bankruptcy attorney and discover how a fresh start under the law can help you.

As a general rule, credit card debt is among the easiest type of debt to discharge during a Chapter 7 or Chapter 13 Bankruptcy. However, in some cases credit card companies will dispute the discharge of credit card debt by filing an adversarial proceeding against the debtor in the bankruptcy court. The creditor may claim that all or a portion of the debt is non-dischargeable. Debts that are declared non-dischargeable may have to be paid during the bankruptcy, or may survive the bankruptcy altogether.

A credit card company may claim that the debtor committed fraud in obtaining or using the credit card. If the creditor can prove that the card was obtained under false pretenses (i.e. that the application was false), the credit card debt may be declared non-dischargeable because of the fraud.

A credit card company may also claim that charges were placed on the credit card when the debtor had no intention to repay the debt. Additionally, a presumption of fraud arises where luxury goods and services are purchased or cash advances are taken shortly before the filing of a bankruptcy case. 

Credit card companies are entitled to notice of a debtor’s bankruptcy case, and these companies monitor bankruptcy cases for signs of fraud. Certain actions send up a red flag including:

·                     Filing bankruptcy on a new card;

·                     Taking a cash advance prior to filing;

·                     Charges for travel or vacation;

·                     A debt transfer from one card to another;

·                     Credit charges while unemployed; and

·                     Charges made after consulting a bankruptcy attorney.

The more time between the credit card activity and the bankruptcy filing, the less likely the charge will cause a discharge dispute. The best advice is: if you are considering bankruptcy, stop using your credit cards. Consult with your bankruptcy attorney regarding the best way to discharge your credit card debt.  Contact Fears | Nachawati for a free consulation by calling toll-free 1.866.705.7584 or by e-mailing info@fnlawfirm.com. 

Clients have many questions during the initial appointment with a bankruptcy attorney.  The most common concerns are losing property, and rebuilding credit after the bankruptcy case is over.  Occasionally someone will ask a straight-forward question: “Will filing a bankruptcy ruin my life?”  This powerful and important question deserves a straight-forward answer:

No!

The bankruptcy laws are widely misunderstood by the average American.  The purpose of bankruptcy is to put overwhelming financial difficulties behind and give an honest person a fresh start.  Many Americans have taken advantage of a fresh start to improve their lives and have made tremendous contributions to our society.  Perhaps the best way to illustrate the power of bankruptcy’s fresh start is to look at some famous examples:

Actor Burt Reynolds filed for bankruptcy in 1996 after his divorce from Loni Anderson. He listed more than $10 million in debt, and his dinner theater in Jupiter, Florida, was foreclosed on and his ranch was sold.  Never one to quit, Reynolds continues to act in movies and television.  Burt Reynolds was nominated for an Academy Award for Best Supporting Actor for his performance in the 1997 film Boogie Nights and won a Golden Globe Award for the movie.

Named as one of Time Magazine's "100: The Most Important People of the Century," business titan Henry Ford didn't always have the Midas touch.  By 1901 Ford had unsuccessfully managed his first automobile company into bankruptcy.  Two years later he founded Ford Motor Company.

Walt Disney may have had vision, but he needed a second chance to make the Happiest Place on Earth a reality.  After his first film company failed, Disney filed bankruptcy in 1923.  Five years later Disney introduced the world to Mickey Mouse and the Disney empire was born.

In 1875 a young businessman saw his horseradish company go bankrupt.  Undeterred, the young man formed a new company in Pittsburgh, PA with his brother and cousin making ketchup.  That company was a success for H.J. Heinz and in 2007 the H.J. Heinz Company had over $10 billion in revenue.

Other famous people who have used the bankruptcy laws to help them recover from financial difficulty include: singer Willie Nelson, talk show host Larry King, actress Kim Basinger, and even billionaire Donald Trump!

Don’t let financial difficulty stand in the way of your dreams!  Bankruptcy will not ruin your life; it is a tool to help you build a better future for yourself and your family.

A recent survey by the Consumer Federation of America found that debt collection issues are the fastest growing category of consumer complaints.  The survey polled 34 state, county and city consumer agencies in 19 states and uncovered many abusive debt collection practices.  The complete report, including proposals for consumer protection laws and tips for consumers to protect themselves, is available at the Consumer Federation of America web site, www.consumerfed.org.

The results of this survey are not surprising to many bankruptcy attorneys.  People in debt can face a multitude of unethical practices employed by debt collectors.  Fortunately, there are some consumer protections that are available.  One of the most important consumer protections is the federal Fair Debt Collections Practices Act (FDCPA).  This law restricts third party debt collectors from employing abusive or unethical practices when collecting a personal, family, or household debt.  The law restricts these collectors from:

*  Contacting a third party who does not owe the debt;

*  Making a false threat of civil or criminal legal action;

*  Making repeated telephone calls or calls at unreasonable times (before 8:00 AM or after 9:00 PM); or

*  Making phone calls to an inconvenient place (e.g. contacting you at work in violation of your employer's policy).

Under the FDCPA the collector must state that the communication is from a debt collector and that any information obtained may be used to collect the debt.  Additionally, the debt collector must provide certain information concerning the debt, including:

*  The amount of the debt;

*  The name of the creditor (and original creditor);

*  That the debt will be assumed valid unless you dispute the debt within thirty days; and

*  That if you dispute the debt, the debt collector must provide verification of the debt.

One of the most beneficial aspects of the FDCPA is that once you are represented by an attorney, the debt collector can no longer contact you directly.  All communication must be made to the attorney.  That means that once you employ bankruptcy counsel, you should no longer be called at home or at work by third party debt collectors.

A violation of the FDCPA is a serious matter and may be litigated in federal or state court.  If you are being hounded by creditors, investigate your legal rights.  An experienced bankruptcy attorney can explain your legal rights and help you choose the best course of action.  Contact bankruptcy law firm, Fears | Nachawati, for a free consultation at toll free 1.866.705.7584 or via e-mail at info@fnlawfirm.com. 

If a debt collector is harassing you over a debt that you thought was dead and buried, you may be dealing with a zombie debt.  The usual scenario is an unexpected phone call or letter asking for payment on a debt that is either outside the statute of limitations or is in some other way legally uncollectible (e.g. discharged in bankruptcy).  The collector may even offer a “special deal” like a 75% discount for immediate payment.  What the collector will not reveal is that the debt is legally uncollectible – meaning it is unenforceable in a court of law.

Zombie debt collection is big business.  Zombie debt collectors buy old debts for pennies on the dollar, then try to collect as much as possible.  If the zombie debt collector buys an old $1,000 credit card debt for $20, and one phone call settles the debt for $100, the zombie debt collector makes a nice profit.  Since the debt is not legally enforceable, guilt and scare tactics are all the collector has to coerce payment.

Some zombie debt collectors actually violate the law by attempting to collect.  For instance, trying to collect a debt that was discharged in bankruptcy is a serious violation of the federal court discharge injunction.  Threatening a lawsuit for a debt that is past the statute of limitations is a violation of the federal Fair Debt Collections Practices Act (FDCPA).  Zombie collectors not only rely on ignorance of the law, they thrive on it!

Some individuals want to pay these debts.  While admirable in intention, the result may be extremely harmful.  Unpaid debts that have dropped off a credit report may be reported for another seven years after the payment date.  That dead and gone debt may reappear as an entirely new (and legal) negative item on your credit report – and substantially harm your credit score.

So what should you do if you encounter a zombie debt collector?

·                    Know your rights!  Your attorney can explain the statute of limitations or other legal restriction to the collection of an old debt.

·                    Do not give any personal information to a zombie debt collector.  Nothing good can result.

·                    Do not make a payment on an old debt until you learn your rights.  What may seem like an honest act of payment on an old debt may turn into a nightmare on your credit report.

Remember, zombie debt collectors are the bottom feeders of the collection industry.  They have been known to employ the worst ethical practices to obtain payment.  Don’t be haunted by zombie debts.  Contact bankruptcy firm Fears | Nachawati for a free consultation by calling 1.866.705.7584 or by e-mailing info@fnlawfirm.com and chase them back to the grave!  

When you are experiencing a financial crisis you may feel like you are the only one in that situation. The reality is that many people are feeling the current financial crunch for one reason or another. So whether you live in Dallas or any other part of the country, you are not alone!

The following top five reasons seem to be the most common reasons why many people are filing for bankruptcy:

1. Wiping the slate clean. The goal of a discharge is to reduce debt to give you a fresh start.

2. Stop foreclosure or sale of your home.  If your home is in foreclosure a Chapter 13 bankruptcy will stop the foreclosure any time prior to the sale.

3. Prevent repossession of your car or other property. If the bankruptcy is filed quickly enough it can effectively force the creditor to return your car or other personal property.

4. Stop aggressive collection efforts by creditors. Often, creditors will call the home of a debtor at all hours and behave in an abusive manner. Bankruptcy will help stop the harassing phone calls and other aggressive behavior by creditors.

5. Restore or prevent your utilities from being shut off. Filing bankruptcy can prevent the utility company from pulling the plug on you.

If you are experiencing a financial crisis, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or info@fnlawfirm.com for a free bankruptcy consultation.

What bankruptcy can do for you

When filing for a Chapter 7 or Chapter 13 bankruptcy you get immediate protection from creditors against collection efforts against liens on your assets or paycheck. A creditor is considered anyone you owe money to whether it be a credit card debt or a judgment from a civil law suit.

If you file for a Chapter 7 your debts are discharged and you are no longer obligated to pay the debts. In a Chapter 13 case you will have the opportunity to set up a payment plan that can last 3-5 years. Debtors who want to save their home or have IRS debts typically file for a Chapter 13 bankruptcy. This type of bankruptcy will freeze a foreclosure and relieve an individual of liens on their paycheck or bank account.

What bankruptcy can do for you

Unfortunately, even bankruptcy cannot absolve you of the following debts:

• Child support
• Spousal support/alimony
• Fines resulting from criminal cases

Student loans and IRS debts are usually not discharged but can be under specific and limited circumstances.

For a free bankruptcy consultation and to receive information on what bankruptcy can do for you, contact bankruptcy law firm, Fears | Nachawati, by calling our toll free hotline at 1.866.705.7584 or by e-mailing us at info@fnlawfirm.com.

When you file for bankruptcy you can stop harassment, foreclosures, repossessions and lawsuits and be allowed to keep your home, your car, assets and wages. In order to better understand your bankruptcy options, we will take a look at the two most common bankruptcy options for individuals:

Chapter 7

In a chapter 7 bankruptcy case the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds to pay creditors. Part of the debtor's property may be subject to liens but will allow the debtor to keep certain "exempt" property.  A trustee may liquidate the debtor's remaining assets therefore when you file for a Chapter 7, you may lose property. Once the debts are discharged, a debtor is no longer obligated to pay them.

Chapter 13

A chapter 13 bankruptcy is also known as a wage earner's plan because it enables individuals who can provide proof of a regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years that is dependent on the debtor’s income. Payment plans cannot exceed a period longer than five years. During this time the law forbids creditors from any form of collection effort.

For more detailed information on your bankruptcy options contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or by e-mail at info@fnlawfirm.com for a free consultation.

When you file for a Chapter 13 bankruptcy in Dallas, there are circumstances that allow a discharge (in whole or part) for excessive student loan debt. But there are specific and strict requirements for the discharge of a student loan debt.

The first requirement is to file a separate motion with the bankruptcy court and then appear before the judge to explain your hardship. Your best chance at getting your student loan discharged is to prove that you can't provide a minimum standard of living for yourself and your dependents if you have to repay the student loan.  Some bankruptcy courts will discharge part of the loan on if you can show that repaying it all would be a hardship. 

Other reasons student loans are sometimes deemed unenforceable and thus discharged are due to school closures, fraud, etc.  In the event that you can only get part of the student loan discharged, you will be given the opportunity to pay them off over the course of the plan by filing for a Chapter 13 bankruptcy.

At the very least, when you file for a Chapter 13 bankruptcy, you will halt any collections effort by the student loan servicer. They will not be able to make harassing phone calls or place liens on your assets.

For a free bankruptcy consultation regarding the discharge of student loans, contact Dallas bankruptcy law firm, Fears | Nachawati, toll free at or via e-mail at 1.866.705.7584 or via e-mail at info@fnlawfirm.com. 

Many people are in a financial situation where bankruptcy may be their only option for a fresh start but they are hesitant because they don’t want to ruin their chances of getting a job. Coupled with a troubled economy, it’s no wonder people are doing everything they can to keep or get a job.

A common question Dallas area bankruptcy attorneys hear is whether an employer can discriminate against an employee or a job applicant due to a bankruptcy. The good news is that Section 525 of the Bankruptcy Code prohibits private employers from terminating employees or discriminating with respect to employment solely because a person: (1) is or has been a debtor in bankruptcy; (2) has been insolvent prior to filing bankruptcy but before receive a grant or denial of a discharge; or (3) has not paid a debt what was dischargeable or was discharged in bankruptcy.

 
Another question bankruptcy attorneys get asked is whether they should reveal their bankruptcy to their employer or a prospective employer. In this economy, it can be expected that employers will be more selective and perform pre-employment background screening. How you respond depends on a variety of factors and a bankruptcy attorney can advice you on your rights and obligations regarding bankruptcy.

Contact the attorneys of Fears | Nachawati for a free consultation on bankruptcy and employment by calling toll free at 1.866.705.7584 or by e-mailing  info@fnlawfirm.com.

While it is true that bankruptcy can be a good option to remove bad debts or save your home, it should not be entered into lightly. Following are the pros and cons when deciding to file for bankruptcy:

• Filing bankruptcy means that your bankruptcy is listed on your credit report and remains there for 10 years on a chapter 7 and usually 7 years on a chapter 13. However, this does not mean that you have to wait to 7-10 years to get good credit again. Many bankruptcy clients have been able to get a mortgage from a bank to purchase a house about 2 years after the bankruptcy.

·         Another downside of filing bankruptcy is the cost involved. While bankruptcy does cost money, it can also save you thousands or even your home once debts are discharged or repayment plans proposed through bankruptcy. The fees paid to the court and a bankruptcy attorney are much less significant than if you had to pay your creditors or lose your home.

Each financial situation is different. Consult a competent bankruptcy attorney who represents debtors to find out what is in your best interest. For a free bankruptcy consultation contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com. 

Just because you filed bankruptcy does not mean you cannot buy a home in the future, but you will probably have to wait at least 2 years after your bankruptcy is discharged before a mortgage lender will approve you for a home loan. It is usually best to wait at least 2 years to qualify for a good interest rate and lower down payment. After the two-year waiting period is over, you should be able to get financing. You can usually achieve this as long as your debts are paid on time after the discharge of your bankruptcy.

Also, if you are currently facing foreclosure or too many credit card bills, it may be in your best interest to file for bankruptcy. When you file for bankruptcy, it will place an automatic stay that will suspend any collection action by creditors. Through bankruptcy you may be able to save your current home or improve your credit rating, as you will no longer be lowering it due to late payments.

If you are considering filing for bankruptcy contact bankruptcy law firm, Fears | Nachawati, by calling toll free 1.866.705.7584 or by e-mailing us at info@fnlawfirm.com for a free consultation.

Many people hesitate to hire a bankruptcy attorney is because they think that it will be very expensive. In actuality, the fees involved are not high and can save you thousands in the long run.

Many attorneys are very flexible in helping you get started in your bankruptcy. The cost of attorney fees varies widely depending on the issue surrounding your personal bankruptcy case. Some individuals have a basic Chapter 7 case while others have a complex Chapter 13 case that includes a home loan and IRS debts.

What needs to be considered carefully is that when you have a skilled, experienced bankruptcy attorney representing you in your bankruptcy you can save money on issues such as:

·         Discharge of debts

·         Exemptions for second mortgages

·         Assistance in stopping creditors take collection action against your assets

Additionally, it is crucial that the bankruptcy forms are filled out appropriately so that the bankruptcy trustee will not object to your proposed payment plan or debts to be discharged in your petition.

For more information on how to get started with your bankruptcy petition and for a free bankruptcy consultation contact law firm, Fears | Nachawati, by calling toll free 1.866.705.7584 or by e-mailing info@fnlawfirm.com. 

For updated information on filing fees visit http://www.txnb.uscourts.gov/Clerks-Office/Filing-Fees.

If you are contemplating filing for bankruptcy you may be wondering how it will affect your job. This is understandable because while you do want to get rid of your debts, you do not want to lose your job. The good news is that you cannot get fired for filing bankruptcy because federal law prohibits an employer to discriminate against you for declaring personal bankruptcy.

Your constitutional rights protect you from being fired for filing bankruptcy. In fact, it is a violation of your rights, not to mention a crime, to fire someone for filing bankruptcy.

If anything, once your debts are discharged through a Chapter 7 bankruptcy or a proposed payment plan is approved through a Chapter 13 filing, you will sleep better, feel less stressed and will be able to better concentrate at work.

Additionally, if creditors are threatening you with liens, it may be a wise step to file for bankruptcy to freeze any type of collection action against your paycheck.

Contact bankruptcy law firm, Fears | Nachawati, by calling us toll free at 1.866.705.7584 or e-mailing us at info@fnlawfirm.com to find out how bankruptcy can help you get rid of debts.

You will be able to get a student loan after you file for bankruptcy, but you will have to wait until your bankruptcy is discharged. Depending on whether you file for Chapter 7 or Chapter 13 bankruptcy, it can be 6 months-5 years. For obvious reasons, a bankruptcy trustee will probably not allow you to take on new debt while your bankruptcy is pending.
The length of time you must wait also depends on the type of student loan you plan to apply for. In the case of government funded student loans, your credit history (including bankruptcy) is irrelevant. It may be more challenging you have to get private students loans, but not impossible by any means.

The ability to get student loans in the future should never be an impediment to your decision to file for bankruptcy. While an education is always best in the long run, you should carefully consider your current financial situation and what is in your best interest. When you file for bankruptcy you are erasing debts and able to start off fresh.

Contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com to discuss your options for filing bankruptcy.

There is no immigration law, statute, or regulation that specifically forbids individuals who have filed for bankruptcy from applying for naturalization. Filing for bankruptcy will not necessarily disqualify you from becoming a US citizen. Basically, the Department of Homeland Security list the following general requirements for naturalization as:

• A period of continuous residence and physical presence in the United States.
• Residence in a particular USCIS District prior to filing.
• An ability to read, write and speak English.
• A knowledge and understanding of U.S. history and government.
• Good moral character.
• Attachment to the principles of the U.S. Constitution.
• Favorable disposition toward the United States.

Depending on the circumstances, the Department of Homeland Security, in its wide discretion, may deem filing for bankruptcy as proof of poor moral character.  Therefore, it may be wise for you to consult with an experienced bankruptcy attorney to discuss the procedures and implications of filing for bankruptcy.

*For more information on naturalization visit http://www.uscis.gov/portal/site/uscis/menuitem.

The decision to file for bankruptcy before or after divorce will depend on a few factors. If you are married and your spouse declares bankruptcy, it may be a good idea to join with your husband in filing for bankruptcy, particularly in a community property state such as Texas. A joint bankruptcy will wipe the slate clean of debts for both of you.

If the divorce is complete before your husband files for bankruptcy, you may not be included in the bankruptcy. However, if bankruptcy is inevitable for you as well, it probably will be cheaper for you and your spouse to file jointly for bankruptcy before you complete your divorce proceedings. If you don't join in the action, his bankruptcy will only get him off the hook for joint debt and the creditors may pursue you to collect the full amount.

Each financial situation is different. Consult a competent bankruptcy attorney who represents debtors to find out what works best for you. For a free bankruptcy consultation contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com. 

The answer to that question is yes and no. Yes, the IRS is going to be more flexible regarding your past due tax debt when you file for Chapter 13. They will base their compromise on two factors, either doubtful liability (you don't owe that much tax) or doubtful collection (you don't have resources or assets to pay the tax you owe). 

As for the no part of the answer, this does not mean that you are completely off the hook if you file for a Chapter 13, but a Chapter13 will stop any liens by the IRS on your assets such as your home, bank account or your paycheck. When you file for bankruptcy in Dallas, the IRS becomes just another creditor in your Chapter 13 bankruptcy. Their objections to the repayment plan proposed in your Chapter 13 plan are limited to the same grounds as any other creditor. 

Most of the time the IRS welcomes a Chapter 13 filing since the priority taxes get paid in full with little expenditure of time and energy by the IRS. It all comes down to the fact that the IRS would rather get something than nothing.

If you are facing IRS debt issues, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com for a free bankruptcy consultation.

Famed songwriter Bruce Springsteen complained in his song Atlantic City, “I got debts that no honest man can pay.” For many honest people debt can come suddenly through no fault of your own.

Despite some of the reports on the Internet that foreclosures in the Fort Worth area are declining, the rates are still considerably higher than they were last year. There can be many reasons why there is a lull in foreclosures. It could mean that the mortgage companies are overwhelmed with paperwork and are forced to sit on homes that are in pending foreclosures. This of course does not mean that they will not foreclose, but rather that they will eventually get around to it.

If you are facing foreclosure and cannot negotiate a reasonable repayment plan with your mortgage lender, it may be wise to consider filing for a Chapter 13 bankruptcy. When you file for bankruptcy, you will stop the sale of your home and have the opportunity to repay the arrears. Additionally, you may even be able to exclude a second mortgage that in turn can save you thousands in mortgage payments.

If you are in danger of losing your home, filing for bankruptcy can be a very powerful solution for many homeowners as it can give you the time and resources to renegotiate your mortgage with your lender while saving your home.

For more details on how Chapter 13 can help you save your home contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or e-mail info@fnlawfirm.com for a free bankruptcy consultation.

On May 22, 2009, President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure Act.  This new legislation is intended to reform how

credit card companies deal with its customers. According to the White House,

”Just for starters, it bans unfair rate increases, prevents unfair fee traps, requires plain language in plain sight for disclosures, increases accountability all around, and institutes protections for students and young people.”

And while this is definitely a step in the right direction, it does not protect consumers who are in serious credit card debt at this moment. Most people are weighing basic necessities over paying a credit card bill. Even if you once had the recommended 6-month savings in your bank account, we have been in recession far longer than that.

In the meantime, the credit card bills continue to come, with late and over the limit fees for some. As a result, the bill does not get paid and the harassing phone calls and threats from the credit card companies begin to occur. If this is the case, filing for bankruptcy may be a good resolution to your credit card problems. It will help give you a fresh start and stop any collection actions by the credit card companies against your assets or paycheck.

If you are looking for a step in the right direction, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or by e-mail at info@fnlawfirm.com 'for a free bankruptcy consultation.

Dallas bankruptcy filing rates are far more affordable than most people think. In fact, filing for bankruptcy can save you money on your mortgage and reduce the debt owed to creditors. For example, when you file for bankruptcy in Dallas or Fort Worth (Northern District of Texas), the filing fees for a Chapter 7 and 13 are $299 and $274, respectively.

When you file for bankruptcy in Dallas and pay the filing fees your application will be reviewed by the bankruptcy court and all action by creditors will stop immediately. That means that all harassing calls and liens by creditors must end. Creditors are very well aware of the penalties they face if they continue to take action against you after they have been notified that you have filed for bankruptcy.

Filing for bankruptcy can be a very powerful solution to those in debt as it gives the time and resources to renegotiate your mortgage and other debts with your creditors while saving your home and avoiding liens on your paycheck or bank account.

For a free bankruptcy consultation contact Dallas bankruptcy law firm, Fears | Nachawati, via toll free at 1-866-705-7584 or via e-mail at info@fnlawfirm.com.

Debt collectors can be relentless in their pursuit to collect on past due bills.  The following are some tips on how to avoid being bullied by collecting agencies.  These tips were published in an article in the Dallas Morning News that can be found here. 

1.  Do not ignore the collector's calls or written communication. 

2.  Make the collector prove that you owe the debt.

3.  If a collector calls regarding a bill that has already been paid then provide proof to the collecting agency the account is already settled and paid.

4.  Do not tolerate abusive debt collectors who make threats, use foul language or repeatedly call. 

5.  Take action by submitting written notice to debt collectors to cease communication if collection calls become over the top. 

By taking these steps hopefully you can work out a plan to resolve your debt with the collection agencies in a swift manner.  If however you feel you have taken the above action and still feel stressed from collection calls and cannot seem to get caught up on your bills then you may want to speak with an Attorney regarding your options.  If so, contact Fears | Nachawati toll free at 1-866-705-7584 or via e-mail at info@fnlawfirm.com. 

The Dallas Morning News published an article recently by bankrate.com regarding 5 common financial pitfalls that individuals make in a bad economy.  The article outlines the below 5 mistakes and offers realistic solutions regarding how to avoid them.  For a link to the article click here.     

1.  Continued spending using credit cards

2.  Invading your nest egg - withdrawing money from your IRA or 401k

3.  Paying for college without applying for aid

4.  Investing inertia - long-term investment management

5.  Obtaining cash from your home

If you have found yourself in one of the above situations not realizing that they were mistakes and cannot find a solution for relief then you may want to speak to an experience attorney who can discuss your options with you.  Call us toll free at 1-866-705-7584 or e-mail us at info@fnlawfirm.com.   

There are a few effective ways to stop or postpone a foreclosure or sale date on your home.  Your first step should be to contact your Mortgage Company directly as soon as you know you are behind or are about to miss a payment and speak to the Loss Mitigation department. Every mortgage company has Loss Mitigation department and they are there to help you in times of need (not that they always do help).  Let them know your current situation (such as loss of job, decrease in income, medical conditions or emergency situations) and ask them for your options.

The Loss Mitigation department of your Mortgage Company should be able to provide you a forbearance option or a modification option. BEWARE, some Mortgage Companies use their Loss Mitigation department to drag their feet until they sell your house.  Don’t let this happen to you!

If you keep getting the run-around, call our office and let us layout the options for you before it’s too late.  Call toll free at 1-866-705-7584 or e-mail us at info@fnlawfirm.com. 

Is your business turning a profit? Does it own any assets? Would you like to keep it running, or would you like to wrap it up? These are a few of the questions you should consider if you own a small business and are debating filing for bankruptcy.

If your goal is to keep the business in operation, you really need to look into a Chapter 13 Bankruptcy to relieve your budget and keep your doors open. If you’re ready to close up shop and want to move on with life, you should look in to filing a Chapter 7 Bankruptcy to give you a fresh start.

To talk with someone about the different options you have as a small business owner, contact Fears | Nachawati for a free consultation by calling toll free 1-866-705-7584 or e-mail info@fnalwfirm.com. 

It’s not a big surprise to people in San Antonio, Texas, (and the rest of the country) that we are in the middle of a foreclosure epidemic. Some states like Texas, California and Florida are suffering much more than others. But regardless of the reasons people are facing foreclosure--loss of income, slow business or mismanagement of finances--there is something homeowners can do to gain control and avoid losing their home. For many the best option is to file for a Chapter 13 bankruptcy. It will give you some control over your home loan and time to restore your finances.

When you file for bankruptcy in San Antonio, the lender cannot foreclose on or sell your home. A Chapter 13 bankruptcy also gives you the opportunity to repay any arrears so you can get caught up. You may even be able to lower your monthly payment by removing a second mortgage. Filing for bankruptcy will also keep any other creditors from taking action against your paycheck or assets. If your goal is to save your home, it is advisable you speak with an attorney experienced in bankruptcy law as soon as possible.

For a free consultation on how Chapter 13 can help you save your home, contact bankruptcy law firm, Fears | Nachawati, by calling toll free 1-866-705-7584 or by e-mailing info@fnlawfirm.com.

This is a quick list of the things you can keep when filing for bankruptcy (Depending on the type of exemptions you qualify for and the amount of equity you have).

1.       Your house

2.       Your Car(s)

3.       Your Bank Account(s) – including Savings Accounts

4.       All Retirement Account(s) – Yes, 401ks, 403bs & IRAs.

5.       Your Personal Belongings

6.       Stocks, Bonds and Mutual Funds

7.       You’re Sanity!

Call the office anytime to find out more by dialing toll free 1-866-705-7584 or e-mailing info@fnlawfirm.com. 

A common question asked regarding bankruptcy is whether student loan debt is dischargeable. The answer is that you can consolidate your student loan with your other bills in a Chapter 13 court-ordered repayment plan. When you file for a Chapter 13 in Austin, Texas, the student loan agency must accept payments under the terms of the Chapter 13. The student loan agency is a creditor and they cannot pursue you for any unpaid portion of the student loan during the Chapter 13. Also, the interest that would normally accrue may be waived during the Chapter 13. So in a way, it is a loan forbearance.

One of the benefits of filing for bankruptcy in Austin is the temporary relief, allowing you to pay a reduced percentage of your student loan and other outstanding obligations. They will not be able to put a lien on your income or assets. But there is a catch. After your Chapter 13 discharge they may pursue you for any portion of the student loan that was not satisfied by your Chapter 13 payment plan. After the Chapter 13 is discharged or dismissed, however, you will have the opportunity to work out a payment plan to pay the remaining balance.

For a free consultation about student loans forbearance and bankruptcy contact Fears | Nachawati via toll free phone a 1-866-705-7584 or via e-mail at info@fnlawfirm.com.

Although obtaining a driver’s license is a privilege, for most people in Arlington, Texas, having a driver’s license is a necessity. You need it to drive to work and take your kids to school. There are many reasons people lose their driving privileges. Some get it suspended because of an unpaid judgment from an accident where you did not have insurance. In Texas you could have this type of suspension even if you have not been sued.

When you file for bankruptcy in Dallas the automatic stay takes effect immediately when you file and entitles you to get your driver's license back in most circumstances. Some of the circumstances when you have the right under bankruptcy law to get your license back are when it is suspended because of non-payment of a debt vs. the legitimate exercise of the state's police power as in a DUI situation.

You can get your license back through bankruptcy as long as the suspension is not the consequence of driving a vehicle while intoxicated that involved death or bodily injury. Another exception to re-instating a driver’s license is the non-payment of child or spousal support.

For a free consultation on how Arlington bankruptcy law can help you recover your driver’s license, contact Fears | Nachawati via toll free phone at 1-866-705-7584 or e-mail at info@fnlawfirm.com.

When President Barack Obama was campaigning for the presidency he promised reforms to the process of bankruptcy. For example, he called for a change in the bankruptcy code to allow modification of the terms of loans on the debtor’s primary residence. This means that hopefully one day soon the bankruptcy court will be able to adjust your home loan to a fair and reasonable payment. But while all of this is being played out, many people are still losing their homes.

One of the key factors in saving your home is being able to stay in your home as long as possible so that you can re-negotiate your mortgage with your lender. If you live in Austin, Texas, one of the best ways to get some control over your home loan (and the rest of your finances) is to file for bankruptcy. When you file for bankruptcy, your home cannot be foreclosed on or sold. This can definitely help you get your financial situation together while the government is trying to get theirs!

If you are in danger of losing your home, filing for bankruptcy can be a very powerful tool as it can give you the time and resources to renegotiate your mortgage with your lender while saving your home. For a free bankruptcy consultation contact bankruptcy law firm, Fears | Nachawati via toll free at 1- (866) 705-7584 or via e-mail at info@fnlawfirm.com.

Most homeowners who file for bankruptcy in Arlington, Texas, do it to save their homes.  They are aware that by filing for bankruptcy, the mortgage lender will not be able to foreclose on their home and that any pending sale of your home will also be halted immediately. What many homeowners do not know about Dallas bankruptcy law is that bankruptcy can do more than save their homes.

In a way, when a homeowner files for bankruptcy, they can modify their loan by getting rid of a second loan on their mortgage. Currently there is no law allowing the bankruptcy court to modify a loan, but when a second mortgage is removed through a bankruptcy proceeding, it can greatly reduce your monthly mortgage. Also, even after your file for bankruptcy, and your file has been approved by the trustee, you can modify your home loan. For more clarification on how this process works, it is best to consult with an experienced bankruptcy attorney.

If you are in danger of losing your home, filing for bankruptcy can be a very powerful solution for many homeowners as it can give you the time and resources to renegotiate your mortgage with your lender while saving your home. For a free bankruptcy consultation contact Dallas bankruptcy law firm, Fears | Nachawati, via toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com.

MSN.com posted an article regarding 12 myths about bankruptcy and how bankruptcy can affect your possessions and credit.  Among some of the myths and misconceptions is that you will loose everything, you will never get credit again and that bankruptcy will improve your credit rating.  Of course these are in fact myths and the article provides explanations for each as well as other common misconceptions.  I believe it is a great article to read if you are debating the pros and cons for filing bankruptcy and need answers to some very common questions. 

The full article can be found here. 

If you believe bankruptcy might be the answer for you and want a fresh start then contact Fears | Nachawati for a free consultation via toll free at 1-866-705-7584 or via e-mail at info@fnlawfirm.com. 

According to Yahoo.com, Harvard Researchers conducted a study that revealed in the U.S. in 2007 that medical problems caused 62% of all personal bankruptcies filed.  Factors such as high medical costs in which families were forced to mortgage their home or medical problems causing loss of income contributed to financial turmoil.  Many families are also forced to charge medical costs on their credit cards in order to pay off expenses.  The complete story on the Harvard study can be found here. 

If you or your family are suffering from financial distress caused by medical problems then bankruptcy may be the right solution.  To schedule a free consultation with Fears | Nachawati contact us toll free at 1-866-705-7584 or via e-mail at info@fnlawfirm.com.   

One of the most embarrassing and inconvenient things that can happen in a household is to have the utility power suddenly turned off. Unfortunately, it can and does happen when someone gets behind in their utility bill and fails to make payment arrangements with the utility company. It can also happen when you are too far behind and cannot catch up. At that point the utility company can only extend past due payments for so long and at an amount that you will not be able to realistically afford.

If you are in this scenario, chances are that you are also behind in other bills. A good option may be to file for bankruptcy. By filing for bankruptcy in Fort Worth the electric company cannot refuse or cut off service. But, the utility company can require a deposit for future service and you will also have to pay bills that arise after bankruptcy is filed.

A bankruptcy lawyer in Fort Worth can go over more specific details case by case, as everyone’s financial situation is unique.

If you are feeling the stress of past due utility bills and not enough money to pay them, then bankruptcy may be a good solution for you.  For a free bankruptcy consultation contact Tarrant County bankruptcy law firm, Fears | Nachawati Law Firm, toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com.

One of the most asked questions a Dallas bankruptcy lawyer hears is, “How do I stop creditors from calling me?” When someone is delinquent on their bills, creditors have the right to make collection efforts. That can include daily, repeated phone calls demanding payment for past due bills. When faced with these aggressive calls from creditors you have the following options:

• Pay the debt
• Make payment arrangements
• File for bankruptcy

For most people who are behind in their bills, the first two options are not the ones they can realistically afford. At this point the best solution may be to file for a Chapter 7 or 13 bankruptcy to stop persistent and hostile collection efforts. When you file for bankruptcy in Dallas, an automatic stay is placed on all debts. What this means is that all collection efforts, including phone calls, must stop right away. Most creditors know they are not allowed to continue contacting you after you file for bankruptcy. If they continue, they can be fined in bankruptcy court.

For more specific information on how bankruptcy can help stop endless phone calls from creditors and give you peace of mind, contact Dallas bankruptcy law firm, Fears | Nachawati Law Firm toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com for a free bankruptcy consultation.

Yes, personal injury judgments can be discharged with a few exceptions. In fact, many people in Garland, Texas, file for a Chapter 7 or 13 bankruptcy to avoid paying on a judgment. There are many advantages to filing for bankruptcy to discharge a judgment. When you file for bankruptcy all liens on your assets will be removed. You will regain control over your bank account and your paycheck. Additionally, no further action will be taken against for any judgments or debts included in the bankruptcy. It is a perfectly legal way to wipe the slate clean and give you a fresh start.

In order to make sure that your bankruptcy application has been filled out correctly you should consult with an experienced Garland bankruptcy lawyer. During the consultation you can discuss your specific financial situation and exceptions to judgments such as:

·         Child Support

·         Spousal Maintenance

·         Fraud

·         Personal Injury Resulting From DUI

·         Student Loans

Because the Federal bankruptcy law is very specific on what can and cannot be discharged, it advisable for anyone considering bankruptcy to speak with a Garland Bankruptcy attorney.

Contact Garland bankruptcy law firm, Fears | Nachawati Law Firm, today for a free bankruptcy consultation via toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com.

Many people are afraid to file for bankruptcy because they feel it may ruin their chances to get a loan in the future. The reality is that if you are behind in payments or have judgments hanging over you, your current credit score is probably too low to get a loan. Ironically enough, filing for bankruptcy can be the best thing you can do for your credit.

When you file for a Chapter 7 bankruptcy in San Antonio, most if not all of your debts will be discharged. You will no longer owe payments on old debts.

For more specific information on a Chapter 7 bankruptcy, a San Antonio bankruptcy lawyer can answer questions such as:

How long will a bankruptcy stay on my credit report? While a bankruptcy can stay on your credit report up to 10 years, most lenders only look at the last 2-3 years on your credit report.

Will a bankruptcy keep me from getting a loan? The more important issue should be to work towards improving your credit after you file for bankruptcy. If you can show a lender that you can afford to buy something and have a good credit report you will probably get the loan.

For more information on how a Chapter 7 bankruptcy can help you have a fresh start, contact San Antonio bankruptcy law firm, Fears | Nachawati Law Firm, for a free bankruptcy consultation via toll free at (866) 705-7584 and via e-mail at info@fnlawfirm.com.

This one is one the most common questions Austin bankruptcy attorneys hear.

The answer is that it really depends on the type of bankruptcy being filed and the individual financial circumstances of each person.

In short, yes you will be able to buy a home after bankruptcy. You may be required to come up with a bigger down payment and you may have to wait a few years but it is possible. But if you file for a Chapter 13 bankruptcy and it has not been discharged, you may need permission from the trustee to enter into an additional home loan agreement.

What you need to keep in mind is that you should have re-established your credit in 3-4 years after your bankruptcy is discharged. Even if a bankruptcy remains on your credit report for 10 years, most lenders will only care about the most recent activity and your current financial circumstances.

For a free consultation on how filing for bankruptcy today can help you have a better tomorrow contact Fears | Nachawati Law Firm toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com for a Travis County or Round Rock bankruptcy lawyer.

Ironically enough, you will have an easier time getting a car loan after you file for bankruptcy and it is discharged. While this may not make sense to most people, lenders realize that people who have filed for and have a discharged bankruptcy:

• No longer have any debt
• Cannot file for bankruptcy for a number of years
• Are eager to re-establish their credit
• May have extra disposable income

For these reasons, lenders view people who have a discharged bankruptcy as ideal customers. Of course, there are some things to keep in mind. While you can buy a vehicle, property or anything else after a bankruptcy--you must be able to afford it!

But if you are feeling the stress of too many debts at this time and not enough money to pay them, then bankruptcy can be very beneficial. Contact an Arlington bankruptcy lawyer today for more information on how filing for bankruptcy today can help you have a better tomorrow.

For a free bankruptcy consultation to learn more about discharging debts through bankruptcy contact Arlington bankruptcy law firm, Fears | Nachawati Law Firm toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com.

Yes, bankruptcy can help you save your vehicle. When you file for bankruptcy in Fort Worth, you need to list all the property that you possess or is under your name. When you list the vehicle, it cannot be repossessed while the bankruptcy court trustee is reviewing your case. Depending on the type of bankruptcy you file for, Chapter 7 or 13, you may be allowed to keep the vehicle if you agree to make up any past due payments or continue making payments.

Other options include evaluating the equity in the vehicle and how much is owed on the vehicle. The bankruptcy trustee will not take the car if it has no equity. In the unusual case that there is equity, you may have other options as well. If you still owe money on the car, you can reaffirm the debt. Some jurisdictions don’t require that you reaffirm the debt but only that you continue to make the payments as agreed in the original contract.

A consultation with a Fort Worth bankruptcy attorney can help answer specific questions based on your circumstances.For a free bankruptcy consultation to learn more about protecting your vehicle and other assets through bankruptcy, contact a Tarrant County bankruptcy lawyer at Fears | Nachawati Law Firm by calling toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com. 

As the economy worsens, bankruptcy filings are on the rise. According to the American Bankruptcy Institute, consumer filings rose to 1.06 million in 2008, compared with 801,840 during 2007. The ABI based its study on data from the National Bankruptcy Research Center. Additionally, the National Association of Consumer Bankruptcy Attorneys jumped by one-third in 2008, to an estimated 3,200 practicing lawyers. "Consumers are under great financial stress, with no immediate end in sight," said ABI executive director Samuel Gerdano.  More than 1.3 million people in the United States are expected to file in 2009. While this is a relatively small part of the U.S. population, the number demonstrates that bankruptcy is not just something for ‘someone else,’ but instead, something for those who find themselves overwhelmed by today’s unsteady economy. Bankruptcy can provide a fresh start for the individual who finds him or herself in a difficult financial situation. So, while filing for bankruptcy may have in the past been something that no one wants to talk about, for many, it ends up being the light at the end of the tunnel—the saving grace that allows them to get their life back on track.  

With the arrival of Hurricane Ike and its deadly aftermath, many Texas homeowners are not only left homeless, but are also left without insurance coverage on their primary residence or home and their beach and vacation homes. Others are left owing more than their house is worth, as some homeowners in Galveston and Houston will inevitably face foreclosure due to Ike’s destruction and the lack of appropriate insurance coverage. Filing Chapter 13 Bankruptcy in Galveston or Houston may give homeowners a chance to get out from underneath a residence that has seen a sudden drop in value. A Chapter 13 Bankruptcy could also allow a couple to reorganize their debt in response to dealing with the aftermath of Hurricane Ike. If you need more legal information on whether a Chapter 13 Bankruptcy filing is right for you, attorneys are waiting to answer your questions. You can call us to set up a free consultation at 1 (866) 705-7584. Fears | Nachawati Law Firm.