I Received a Motion for Relief from Stay. Now What?

When you file a bankruptcy case there is an automatic stay that goes into effect. This stay protects a debtor from their creditors trying to collect. Most importantly it protects a debtor from a foreclosure or a repossession of their home or car. A creditor can request relief from the stay or request that the stay be lifted. Normally they do this when you have missed payments under the plan or direct payments on your secured debt. If the stay is lifted the creditor can start to collect. This means they can start calling you and foreclose, or repossess the collateral.

You will usually be mailed the motion by the creditor. If you get the motion, contact your attorney to discuss your options. Many times the attorney can work with your creditor to resolve the motion without the stay lifting. Usually the best way to resolve the motion is to get caught up with the payments. Sometimes if you are only behind a few payments this can be done prior to the hearing or you can enter an agreement with the creditor to do it over the next few months. Otherwise you may need to change the terms of your plan to cure the delinquency amount through your chapter 13 plan. It’s important to contact your attorney because they know what options will work best to resolve the motion.

Motions to lift stay are much more common in a chapter 13 however they can also occur in a chapter 7 case as well. The reason they are less common in a chapter 7 case is because the case usually only lasts a few months and then the stay ends so it is not necessary to file a motion. If a creditor does file a motion it is usually to repossess collateral the debtor is surrendering. If you are in chapter 7 and you receive a motion to lift stay you should contact your bankruptcy attorney to know what to do next and to discuss your options.

If you have questions about bankruptcy contact the experienced attorney’s at Fears | Nachawati. Call us at 1.866.705.7584 or send an email to fears@fnlawfirm.com to set up a free consultation.

If your vehicle has been repossessed, you may be able to get it back by filing bankruptcy, if you move quickly.

Section 542 of the Bankruptcy Code requires that entities in possession of “property of the bankruptcy estate” are generally required to turn the property over to either the trustee (in Chapter 7) or the debtor (in Chapter 13). Section 541 of the Bankruptcy Code defines property of the estate as “all legal or equitable interests of the debtor in possession as of the commencement of the case.” The debtor’s continuing rights to and interests in a repossessed vehicle are determined by state law. In many states, these rights are only available to the debtor for a few days or weeks after the repossession (although sometimes continuing until the creditor sells the vehicle or otherwise transfers title).

If your vehicle is property of the bankruptcy estate, most courts say the creditor must return the vehicle to the estate immediately upon learning of the bankruptcy filing:
“[S]ection 362 requires a creditor in possession of property seized as security–but subject to a state-law-based residual equitable interest in the debtor–to deliver that property to the trustee or debtor-in-possession promptly after the debtor has filed a petition in bankruptcy under Chapter 13.”
Weber v. SEFCU (In re Weber), 719 F.3d 72 (2d Cir. 2013). The few exceptions to this majority rule are Bell-Tel Fed. Credit Union v. Kalter (In re Kalter), 292 F.3d 1350 (11th Cir. 2002) (applying Florida law to find no exercise of control) and Charles R. Hall Motors, Inc. v. Lewis (In re Lewis), 137 F.3d 1280 (11th Cir. 1998) (applying Alabama law).

If the creditor refuses to return the vehicle, or does not return the vehicle “immediately” upon learning of the bankruptcy filing, a bankruptcy court may sanction the creditor. The creditor is prohibited from selling or transferring estate property after the bankruptcy is filed.

Chapter 13
In a Chapter 13 bankruptcy case, a repossessed vehicle that is estate property is immediately returned to the debtor’s possession. The debtor is required to provide “adequate protection” to the creditor to assure that the property will be safeguarded (usually that means insured) and that the creditor will be adequately compensated. This usually takes place by submitting a Chapter 13 plan of repayment to the bankruptcy court. Repayment of the vehicle loan terms can be modified to alter the length of payments, interest rate, and sometimes the principal amount owed.

Chapter 7
In a Chapter 7 case, a repossessed vehicle that is property of the bankruptcy estate is turned over to the bankruptcy trustee. The Bankruptcy Code gives the Chapter 7 debtor the option to seek an order of redemption to keep the vehicle. In a redemption, the debtor pays the fair market value of the vehicle to the creditor (usually in one lump sum) and the title transfers to the debtor free and clear of all liens. If the lump sum payment is beyond the debtor’s financial ability, there are lenders available who specialize in bankruptcy redemption loans.

If you are considering filing for bankruptcy, contact the experienced attorneys at Fears | Nachawati for more information and a free consultation. Call our office at 1.866.705.7584 or send an email to fears@fnlawfirm.com.

How Long Can I Keep My Car If I Surrender It in Bankruptcy?

While the Bankruptcy Code gives the debtor many options to retain a personal vehicle and continue paying a lender, sometimes it makes more sense to just walk away. In those cases, the debtor wants to know how long he or she has before the bank takes the vehicle. The first consideration in addressing this issue is recognizing that the automatic stay protects a Chapter 7 debtor from any collection action. Until the creditor is otherwise authorized, it cannot take the vehicle during a bankruptcy case.

The Bankruptcy Code specifically authorizes two times when a debtor loses its automatic stay protection for secured collateral. Each Chapter 7 debtor is required to file a statement of intention with the court which announces the intent to surrender, redeem or reaffirm (or in some cases “ride through”) property secured by a lien. If the debtor fails to file a statement of intention within 30 days after filing the bankruptcy case (or by the date of the section 341 meeting of creditors, which ever is earlier), the automatic stay is lifted.

The automatic stay also terminates for secured property if the debtor fails to follow-thru with his intention to surrender, redeem, or reaffirm within 30 days after the first date set for the section 341 creditors’ meeting. Note that just because the automatic stay is lifted and the collateral is no longer property of the bankruptcy estate does not mean that a creditor can immediately repossess the collateral. The debtor must still be in default under the terms of the contract/loan agreement before the collateral can be repossessed.

Finally, the automatic stay is terminated when the debtor receives a bankruptcy discharge. In this case the debtor’s personally liability is discharged, but still has possession of the secured collateral. If the debtor is in default for not making payments on the loan, the creditor can immediately repossess the vehicle.

The best advice is to surrender your vehicle back to the bank shortly after your bankruptcy filing. The reason is that you are responsible to safeguard the vehicle, which means insurance, maintenance, and otherwise protecting the vehicle from harm or damage. Damage to the vehicle after you file bankruptcy could expose you to liability that is not included in your bankruptcy discharge.

Surrendering property in bankruptcy is usually a simple matter. Your attorney and the bank coordinate a time and place, and you drop off the car. In some cases the lender may send a person or tow truck to get the car. Nearly always the debtor is given advanced notice. If you have specific questions about how a surrender will take place in your case, speak to your bankruptcy attorney.
 

Bankruptcy Can Protect Your Vehicle

Once a bankruptcy case is filed, a creditor is prohibited from repossessing the debtor’s vehicle. The process for a creditor to repossess a vehicle during a bankruptcy case is both lengthy and costly. First the creditor must ask permission from the court to repossess through a formal motion. The court then gives the debtor time to respond to the motion and an opportunity to oppose the motion at a hearing. The bankruptcy laws also provide several options for retaining a vehicle during bankruptcy, even when you are significantly behind on your car payments. In many cases your monthly payments can be reduced by the bankruptcy court.

If your vehicle has been recently repossessed, the bankruptcy laws can force the creditor to return your vehicle. Section 542(a) of the Bankruptcy Code states that the estate of the debtor includes "all legal and equitable interests of the debtor in property, wherever located or by whomever held, as of the commencement of the case," with a few exceptions. The United States Supreme Court has held that the scope of section 541 is broad and estate property includes a repossessed vehicle that is still in the possession of the creditor. United States v. Whiting Pools, 103 S.Ct. 2309 (1983). The Court in Whiting Pools stated that section 542(a) does not require that the debtor have the property in his possession at the commencement of the case.

State laws vary, but most are governed by the Uniform Commercial Code (UCC). The UCC gives the vehicle’s owner an opportunity to pay for the vehicle and have it returned prior its sale or transfer. Therefore, even after the vehicle is repossessed, the debtor still has property rights in the vehicle which become part of a debtor’s bankruptcy estate. If the creditor refuses to return the vehicle, the bankruptcy court may impose sanctions. Once your vehicle is returned you must provide “adequate protection” to the creditor to assure that the property will be safeguarded (insured) and that the creditor will be adequately compensated. These requirements are generally met by submitting a Chapter 13 plan of repayment to the bankruptcy court.

Filing a bankruptcy case will stop the repossession of your vehicle. If your vehicle has already been repossessed, it is important to speak to an experienced bankruptcy attorney quickly to determine your rights. You will lose your rights in the vehicle once it is sold or transferred, so time is of the essence. Call today and learn how the federal bankruptcy laws can protect your property.
 

Fears & Nachawati Bankruptcy Law Offices

4925 Greenville Ave Suite 715, Dallas, TX 75206 (214) 890-0711
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Help! My Car Has Been Repossessed!

 

Imagine this: you are behind on your car payments. Heck, you are behind on a lot of bills, and perhaps you have been considering bankruptcy for some time. Then one day you walk out the door for work and discover. . .

Your car has been repossessed!

Don’t despair! Bankruptcy can still help. Call an experienced bankruptcy attorney immediately because you may be able to get your vehicle returned to you.

The law in most areas (including the Sixth, Seventh, Eighth, Ninth, and Tenth Circuits) is when a debtor files a Chapter 13 bankruptcy, the creditor must immediately return a repossessed vehicle to the debtor. This is because even though the creditor has taken possession of your vehicle, you are still the legal owner. The Bankruptcy Code states that in a Chapter 13, a creditor in possession of a debtor’s asset must ordinarily relinquish the asset back to the debtor.

However, this begs the question: what if your car is sold at auction or the creditor transfers the vehicle title out of your name? If this transfer is done after the Chapter 13 bankruptcy is filed, it is typically a violation of the automatic stay and the vehicle will be returned. If the transfer is done before the Chapter 13 bankruptcy is filed, you are out of luck. You no longer have ownership of the vehicle.

If the creditor refuses to return the vehicle, or does not return the vehicle in a timely manner, most courts will sanction the creditor. Once your vehicle is returned you must provide “adequate protection” to the creditor to assure that the property will be safeguarded and that the creditor will be adequately compensated. This usually takes place by submitting a Chapter 13 plan of repayment to the bankruptcy court.

If your vehicle has been repossessed, take immediate action! Call an experienced bankruptcy attorney and discuss your options. Your attorney can help you make the right financial choice for yourself and your family.

 

Reaffirmation Agreements

A Chapter 7 bankruptcy discharge releases an individual from personal liability for most debts and prevents creditors from taking collection action against the debtor.  In other words, the bankruptcy discharge is a legal injunction prohibiting the creditor from collecting against you personally.  There are a few circumstances in which a debt may “survive” the bankruptcy and be enforceable against the debtor.  The most common is a voluntary process known as “reaffirmation.”

 

A reaffirmation is an agreement that continues the debtor’s obligation on a debt, even though the debt would otherwise be discharged in the bankruptcy.  Usually these agreements concern property with a lien attached (e.g. a car) and the creditor agrees to not repossess the property as long as the debtor continues to pay the debt.

 

The decision to reaffirm a debt should not be made lightly.  A reaffirmation agreement must be made in writing before the discharge is entered.  It must be filed with the bankruptcy court and the debtor must include a statement of current income and expenses that demonstrates sufficient income to repay the debt.  The debtor’s attorney certifies that the debtor has been advised of the legal effect and consequences of the agreement and that reaffirmation of the debt will not create an undue hardship for the debtor or the debtor's dependents.

 

Sometimes a reaffirmation agreement is not in the debtor’s best interest.  For instance, many co-signed unsecured loans that the debtor perceives a moral obligation to repay can be paid without a reaffirmation agreement (and without a subsequent legal obligation).  As you can see, reaffirmation agreements can be complicated and should be carefully considered.  Fortunately, the bankruptcy laws provide many options and tools for solving difficult financial problems. 

 

If you are considering a reaffirmation agreement to continue paying on a debt, seek the advice of an experienced bankruptcy attorney.  Contact Fears | Nachawati for a free consultation to discuss your options by calling toll free 1.866.705.7584 or by e-mailing info@fnlawfirm.com

 

Top Five Reasons People File For Bankruptcy

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 I Should Know About Bankruptcy

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.

Bankruptcy for Beginners

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.

 

Auto Redemption in Chapter 7 Bankruptcy

During a Chapter 7 bankruptcy all unsecured debts are discharged. Debts that are
secured by collateral (e.g. car loans) must be paid or the collateral must be returned to the
lender. Occasionally an individual considering Chapter 7 bankruptcy will own a vehicle
that is worth less than what is owed. This situation is often referred to as “upside down”
and usually involves a late model vehicle that has depreciated faster than the person has
paid on the loan. It doesn'’t make any sense to pay for something that is “upside down,”
but often an individual needs to keep the vehicle for transportation to work and for family
use.
 
Fortunately, a provision of the Chapter 7 bankruptcy code allows an individual to keep a
vehicle and pay only its current market value. This process is called “redemption.”
During a redemption the value of the vehicle is determined (either by agreement between
the debtor and creditor or by the bankruptcy judge after a hearing) and a court order is
issued directing the creditor to accept a sum from the debtor in exchange for a release of
its lien. In plain terms the lender is paid a lump sum and the lien on the vehicle is
released. For example, a debtor that owes $15,000 on an auto that is worth $10,000 will
only pay $10,000.
 
Unfortunately, the payment must be made in a one-time lump sum to the lender at the
time of the redemption order. If the debtor is unable to pay for the vehicle, there are
finance companies that make redemption loans for debtors in bankruptcy. Before making
a redemption loan these finance companies require a loan application and certain
assurances of repayment. The interest rate can be high for a redemption loan, however
the resulting monthly payment is often lower than the original payment. It is important to
carefully consider all of the advantages and disadvantages before making a decision to
redeem a vehicle:
 
Advantages of a redemption loan:
 
• Retention of the vehicle;
• Vehicle is no longer “upside down;”
• The creditor cannot repossess the vehicle;
• Usually results in a lower monthly payment.
 
Disadvantages of a redemption loan:
 
• High interest rate.
 
Redemption is not the only option for keeping a vehicle after a bankruptcy. A skilled
bankruptcy attorney can explain all of your options and help you obtain the best deal for
your family.  Contact Fears | Nachawati today for a free consultation to discuss bankruptcy and auto redemption by calling toll free 1.866.705.7548 or via e-mail at info@fnlawfirm.com.  

Will Bankruptcy Protect My Child's Car If It Is In My Name?

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

How To Protect Yourself Against Car Repossession

Chances are that by the time you are reading this article you have made unsuccessful attempts to negotiate an extension on your car payments. There is no need to lose sleep wondering if your car will disappear in the middle of the night. At this point one of the best ways to protect yourself against car repossession is to file for bankruptcy.

The key is to file for bankruptcy before your vehicle is repossessed. While in some cases, you may be able to get your car back after it’s been repossessed; it is better to avoid that scenario for the following reasons:

·         Repossession charges added to past due payments

·         Possible damage to a vehicle during the repossession

·         Auto finance company less willing to negotiate payments or return vehicle

 

 

When you file for bankruptcy, all collection efforts from creditors on your vehicle and other debts will stop. What this means is that no creditor can makes calls or take any type of action to collect on any past due bills. For further questions, an experienced Fort Worth/Arlington bankruptcy attorney can discuss your specific case to answer any questions that you may have.

 

 

If you are feeling the stress of too many bills and not enough money to pay your bills, then bankruptcy may be an option for you.  For a free bankruptcy consultation contact Fears | Nachawati Law Firm, (866) 705-7584.

How to Protect Yourself Against Car Repossession

Chances are that by the time you are reading this article you have made unsuccessful attempts to negotiate an extension on your car payments. There is no need to lose sleep wondering if your car will disappear in the middle of the night. At this point one of the best ways to protect yourself against car repossession is to file for bankruptcy.

The key is to file for bankruptcy before your vehicle is repossessed. While in some cases, you may be able to get your car back after it’s been repossessed; it is better to avoid that scenario for the following reasons:

·         Repossession charges added to past due payments

·         Possible damage to a vehicle during the repossession

·         Auto finance company less willing to negotiate payments or return vehicle

 

 

When you file for bankruptcy, all collection efforts from creditors on your vehicle and other debts will stop. What this means is that no creditor can makes calls or take any type of action to collect on any past due bills. For further questions, an experienced Fort Worth/Arlington bankruptcy attorney can discuss your specific case to answer any questions that you may have.

 

 

If you are feeling the stress of too many bills and not enough money to pay your bills, then bankruptcy may be an option for you.  For a free bankruptcy consultation contact Fears | Nachawati Law Firm, Phone  1 (866) 705-7584.

Can a creditor repossess my car or furniture?

One of the most unpleasant consequences of failing to pay your bills is "repossession" of the thing you purchased on credit or gave as security for a loan. You do have some legal protection concerning repossession, but not much.

Can a creditor repossess my car or furniture?
Yes, if you don't pay your bills on a "secured debt" - which may be created when you borrow money or pay for goods over time. You promise to pay the creditor and agree that if you do not, the creditor can take ("repossess") a specified item of property without the need for any formal legal action against you.

In many states, the creditor is not allowed to repossess the first time you miss a payment. Instead, the creditor must use that first mistake as an opportunity to teach you how a secured debt works. The next time you miss a payment, the creditor can and probably will repossess.

A creditor is allowed to repossess only if it can be accomplished without a "breach of the peace" (a violent act or an act likely to lead to violence.) Usually, a debtor can stop repossession simply by verbally objecting to it. This gives the debtor a lot of power, but in many instances thwarting repossession is not the best thing to do. You will get to keep your car or furniture longer, but you will have to pay the creditor for all the time and trouble you put him through. Many debtors who know they will not be able to make car payments decide to drop the car off with the creditor. This minimizes the costs of repossession that the debtor would otherwise have to pay.


After repossession, is the debt gone?
Maybe not. It sounds hard to believe, but in many states, you might not only lose the car, but also lose your down payment, lose the monthly payments you've already made, and still owe the creditor even more money.

If, after repossession, the creditor sells the car for less than the amount of the debt and the costs of repossession and sale, the creditor is entitled to sue you for the rest of the money and obtain a "deficiency judgment."



Stopping a repossession
It is not easy to stop a repossession, but to have any chance of doing so, you must take immediate action.

You might file for bankruptcy. Once you file your papers with the bankruptcy clerk, all creditors must immediately cease all legal actions against you - including repossession and foreclosure.

But bankruptcy is an extreme measure. Before you decide on that solution to your financial problems, be sure to consult an attorney who specializes in bankruptcy law, who might advise you regarding some other options.

If you are feeling the crunch of unemployment and do not seem to have enough money to pay your bills bankruptcy may be an option for you.  For a free bankruptcy consultation contact Fears | Nachawati Law Firm, Phone (866) 705-7584. Immediate Assistance

Fears | Nachawati Law Firm has offices located throughout Texas in: Dallas / Fort Worth / Houston / San Antonio / and Austin.