Be Careful When Filing a Second Bankruptcy

Even though the bankruptcy rules are very flexible, sometimes it makes sense to dismiss a bankruptcy case and refile later. This is especially true when circumstances change, such as a temporary loss of income.

In order to combat the appearance of “bankruptcy abuse,” Congress enacted new restrictions for repeat filers in 2005. One of those restrictions is found in section 362(c)(3)(A) of the Bankruptcy Code, which limits the automatic stay to thirty days after filing for a debtor who files a second bankruptcy case within one year of a prior dismissal. Specifically, the law states:

(3) if a single or joint case is filed by or against a debtor who is an individual in a case under chapter 7, 11, or 13, and if a single or joint case of the debtor was pending within the preceding 1-year period but was dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707(b)--

 

(A) the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease shall terminate with respect to the debtor on the 30th day after the filing of the later case[.]

The Bankruptcy Code also provides that a debtor may ask the court to extend the automatic stay, but only if a motion is filed and the matter is heard before the expiration of the thirty day period. Most courts agree that the automatic stay cannot be extended once the thirty day period has expired. After filing the second bankruptcy case, the debtor must quickly file a motion to extend the automatic stay and request a hearing. Otherwise, the period may run and the debtor may lose automatic stay protection.

But some clever attorneys have asked, “what exactly is at risk?”

Like many of the new provisions of the Bankruptcy Code added in 2005, this new law is full of holes and ambiguities. The most glaring in this case is what stay protection terminates “respect to the debtor.” A minority of courts, including the Ninth Circuit Bankruptcy Appellate Panel, interpret what Congress means. These courts say that Congress meant to say that all automatic stay protections are lost at the end of the thirty days. See In re Reswick, 446 B.R. 362 (9th Cir. BAP 2011)

The majority of bankruptcy courts, including a recent decision out of the Northern District of Texas (In re Williford, Bankr. Court, ND Texas, 2013), interpret what Congress actually says. What the statute says is that the stay terminates with respect to the debtor, meaning the debtor and the debtor’s exempt property. Under this interpretation, the automatic stay is not terminated as to the debtor’s property that is part of the bankruptcy estate.

Bankruptcy law can be very convoluted. You need the assistance of an experienced bankruptcy attorney to guide you through the law, rules, caselaw, and political leanings of the judge. For more information or a free consultation please contact us at Fears | Nachawati Law Firm by calling 1.866.705.7584

What Motivates Bankruptcy Filings?

Why do consumer debtors file Chapter 7 or Chapter 13 bankruptcy protection? If you think the answer is financial irresponsibility, compulsive spending, or even insolvency, you’d be wrong in more cases than not. The biggest driver of personal bankruptcy is the unexpected: unplanned job loss, unanticipated illness, and rapidly deteriorating relationships when end in divorce.

 

Unemployment isn’t like it used to be. Since the financial crisis of 2008, more Americans have experienced periods of unemployment than at any time in the nation’s history. In 2012, the Bureau of Labor Statistics announced that 5.2 million Americans had been unemployed for longer than six months. Moreover, finding jobs for which you’re qualified is tougher than normal. In fact, things have been so different from what used to be “normal” for so long that a new term has developed: the new normal.

 

Even if you have a job now, prolonged unemployment can have a lasting legacy. Accumulated debts, particularly on high-interest financial vehicles such as credit cards or payday loans, may grow even as you make the payments you can. Like standing in quicksand, you may feel like you’re sinking further and further into debt. If this sounds like you, it may be time to throw up your hands, exercise your rights, and declare bankruptcy.

 

Likewise, medical bills can be similarly crushing. Over the last several years, real wages have remained relatively stagnant while medical costs have risen steadily. In 2010, for instance, Americans spent $2.6 trillion on health care, up from a mere $256 billion just thirty years prior. Costs have gotten so high that the Center for Disease Control has estimated that in 2011 20 percent of American families missed payments on their health care debts. If this starts to happen, bankruptcy may be the necessary evil you need.

 

When is the right time to take the plunge and declare personal bankruptcy? It’s hard to know. Fortunately, the attorneys at Fears Nachawati can help you answer this important question. Moreover, if you conclude that it’s time to get started making your way through bankruptcy and toward a new financial life, we can help you get started immediately. Your free consultation is just a phone call or email away. Contact us today.

A Dangerous Combination: Rising Health Care Costs & High Unemployment

Unemployment in Texas remains above 7 percent, according to the Bureau of Labor Statistics. While Texas’s unemployment picture is better than most states, the reality is Texas unemployment remains almost twice as high as unemployment prior to the 2008 financial crisis.

 

To make matters more distressing, certain population subsets, such as African-American men, younger workers, and non-college educated workers, are significantly underrepresented in the overall Texas unemployment figure. For instance, 13.4 percent of African-American men and 16.2 percent of younger-than-25 workers are unemployed in the Lone Star State, down only slightly from national peaks in 2011.  

 

Meanwhile, health care costs continue to rise, notwithstanding recent changes in federal health care. In 2012, average annual health care costs for the American family of four exceeded $20,000, up from 7 percent over last year. To make matters particularly shocking, this cost estimate is up from less than $10,000 ten years ago.

 

What’s the result of high unemployment and rising health care costs? For many families, the first step is to secure debt-based liquidity like a home equity loan. When available home equity debt runs out, families next turn to more easily accessible, higher interest debt like credit cards. Finally, as interest payments begin to consume a larger and larger portion of monthly earnings, families begin to make tough choices about spending.

 

Are there better ways to deal with declining prosperity and rising debt? For most families, the answer is yes. Are you ready to learn what’s possible for you? Find out about your legal rights and available credit options through the attorneys and dedicated professionals at the law firm of Fears Nachawati. With years of experience crafting credit solutions for consumers like you, we know how to protect your interests. Call us today.

What If I Lose My Job During Bankruptcy?

A Chapter 13 bankruptcy case is commonly called a “wage earner’s” bankruptcy. That is because the debtor must have a regular income to pay the monthly Chapter 13 plan payment. Losing your job could affect your ability to pay your post-petition payments, like your home mortgage or car loan, or may cause you to miss plan payments.

If your income interruption is brief, and you only miss one or two plan payments, the bankruptcy trustee will work with you to catch up. The trustee may allow you to extend your payments (if available) or simply give you time to pay. The bankruptcy court could also modify your payments according to your new income.

You must also make arrangements to make up any missed post-petition payments that are not included in your monthly plan payment. If you do not pay your monthly house or car payment, the creditor could ask the court for relief from the bankruptcy stay. In some cases it may make sense to surrender a vehicle or even real estate that you cannot afford to keep. Your attorney can review these options with you to successfully restructure your bankruptcy plan.

If the loss of income continues, you may be forced to consider converting your case from a Chapter 13 to a Chapter 7. In Chapter 7 you can eliminate your responsibility for most of your debts through a discharge. In some cases your can also keep property through a reaffirmation agreement with your creditor.

A job loss is a stressful situation and may significantly impact your bankruptcy case. Keep your attorney informed of any changes that occur in your finances. Your attorney can recommend changes to your plan that are in your best interest.

 

A new law would prohibit employers from rejecting applicants based on credit reports

It’s a vicious cycle: You lose your job, causing you to fall behind on your mortgage, car payments and other bills. As a result, your credit suffers. You finally land an interview with good prospects, but a credit check costs you the job.

You need employment to improve your finances, but it’s your finances that are holding you back from employment.

Some legislators are taking steps to prevent this situation from occurring. Recently a House bill was introduced that would prohibit employers from using consumer credit checks to make adverse employment decisions.

The Equal Employment for All Act (H.R. 3149) would amend the Fair Credit Report Act and prohibit employers from making hiring decisions based on an applicant’s consumer credit report. The Act makes exceptions for financial firms, government agencies and jobs that require certain security clearances.

The bill was introduced by Representative Steve Cohen from Tennessee. According to Cohen, the bill would provide some of our country’s “most vulnerable, ‘credit challenged’ citizens” the chance to start rebuilding their credit by getting a job.

Supporters of the bill do not believe that a person’s credit history is a reflection of how they would perform on the job. Critics of the bill, however, point to the vulnerability of small businesses to employee theft, citing the bill’s limited exceptions as a cause of concern.

To read more on the Equal Employment for All Act, click here for the complete article from the U.S. News and World Report.

Regardless of whether the bill passes, one thing remains certain: an experienced Texas bankruptcy attorney is the best source of advice for consumers facing credit difficulties. A Texas bankruptcy lawyer can explain your options and help you make decisions that will get you back on the road to financial stability.

Bankruptcy And Employment Discrimination

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.

 

Can I Get Fired For Filing Bankruptcy?

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.

 

Public Fears About The Economy

By DARLENE SUPERVILLE - Associated Press

WASHINGTON -- As the economy continues to struggle, the public is growing increasingly concerned about losing jobs, not having enough money to pay the bills and seeing their retirement accounts shrink, according to an Associated Press-GfK poll.

 

Nearly half of those surveyed said they worry about becoming unemployed - almost double the percentage at this time last year.

 

The poll released Wednesday also found public support dipped slightly in the past month for the $787 billion package of tax cuts and government spending President Barack Obama signed into law this week on the promise that it will save or create 3.5 million jobs and re-ignite the economy.

 

"I lost a job myself," said Edd Winkler, 40, a married attorney and father of two in Grand Rapids, Mich. "There were just too many attorneys for the amount of work we had coming in to the firm at that time." Winkler has opened his own practice, and says most of his work involves bankruptcies.

 

"I know a lot of other people who have lost jobs," he added.

 

Mariann Lewis, 55, of Stewartstown, Pa., says she was laid off this month from her job in a grocery store's deli department.

 

"It's pretty sad when a food store lays people off," said Lewis, who is married. "It's not like people are going to stop buying food."

 

Lewis said she didn't work there long enough to qualify for unemployment, and her family has begun using credit cards to pay for expenses, including a relative's funeral. "We went through all of our savings," she said.

 

Winkler and Lewis are among those who are increasingly worried about their personal economic circumstances, according to the poll.

 

Nearly half of those questioned, 47 percent, worry at least somewhat about losing a job, up from 28 percent in February 2008. Nearly three-fourths, or 71 percent, say they know someone - a friend or a relative - who has lost a job in the past six months because of the economy.

 

Fear of being thrown out of work is so widespread that equal percentages of higher- and lower-income workers, 47 percent, worry about losing their jobs. Last year, only 20 percent of those earning $50,000 or more annually worried about joblessness, as did 35 percent of those earning less than that.

 

Nearly two-thirds of people, 65 percent, are at least somewhat worried about paying their bills, up from 46 percent last year.

 

More than two-thirds, 69 percent, worry that the value of their stocks and retirement investments will drop, up from 59 percent a year ago.

 

More than half, 53 percent, aren't confident they'll have enough money to live comfortably in retirement, up from a third, 34 percent, in February 2005.

 

Dean Verinder, a 40-year-old Houston engineer who fears declining oil prices will cost him his job, said he's saving money these days.

 

"I'm not putting any money into the stock market," he said. "I was lucky. I pulled all my money out before it crashed."

 

Support for the economic stimulus plan, which Obama signed Tuesday, was at 52 percent, compared with 55 percent last month.

 

Winkler said he wasn't confident the program would create jobs, and thinks that those it does create will be low-paying.

 

"Until we can somehow keep jobs here and create actual real paying jobs, not Wal-Mart greeter jobs, those things won't work," he said.

 

Risa Stoller-Black, a 24-year-old married homemaker from Wapato, Wash., said the stimulus package would create jobs.

 

"I don't see how it couldn't, if there's money to employ people," said Stoller-Black, who has a 4-year-old daughter. "It's just disappointing that we have to get to this point in the first place."

 

About a month into his new job as president, Obama's approval rating was at 67 percent, a slight dip from the 74 percent he received before his Jan. 20 inauguration. By comparison, just 31 percent approved of Congress' job performance, up seven points from December.

 

In other findings:

 

-Nearly two-thirds, or 62 percent, think Obama is making about the right amount of effort to cooperate with Republicans in Congress on solving the country's economic problems. About the same percentage, 64 percent, think the GOP isn't doing enough to cooperate with the Democratic president. Despite courting Republicans during negotiations on the stimulus bill, it passed with no GOP votes in the House and just three GOP votes in the Senate.

 

-People don't think much of last year's $700 billion bailout for the financial industry. Nearly half, or 47 percent, say it had no real effect on the economy, and about a third, or 32 percent, say it actually made things worse.

 

The AP-GfK poll was conducted Feb. 12-17 and involved landline and cell phone interviews with 1,001 randomly chosen adults. The margin of sampling error was plus or minus 3.1 percentage points.

Are we seeing a rerun of the 80's

A perfect storm of job losses, plunging oil prices, dramatic overbuilding and changes in a tax law blew through Texas in the 1980s, leaving San Antonio's commercial real estate market in shambles.

Though today's commercial market has slowed enough for people to start comparing it with the '80s, most in the industry say it's not as bad, and probably never will be.

“I've been to this rodeo before. I've seen the good times and the bad times. No one came to help us in the 1980s. Texas was the doormat,” developer Marty Wender said. “There is no comparison to where we are today and where we were.”

Perhaps no one remembers the '80s better than Wender, 62, who has been in San Antonio since 1969.

Wender kicked off growth on the far West Side with his Westover Hills development. Also, he had a hand in SeaWorld's 1988 arrival and in the creation of Texas 151 and the Hyatt Regency Hill Country Resort, among other projects.

But Wender also filed for Chapter 7 bankruptcy protection in 1991, and a judge wiped out his $67 million in debts.

“You either let tough times destroy you, or you get tougher,” he said. “Texas has been galvanized, it has become stronger because of adversity,” including the demise of the 1980s real estate market, he said.

Though many in the industry are optimistic, it's still too early for some people to say the market will steer clear of past conditions.

If the credit markets don't loosen, “it's going to be long and ugly,” said Harold Hunt, an economist with the Real Estate Center at Texas A&M University.

The market then and now

Here are some of the ways we're different than we were in the '80s.

Vacant office space in San Antonio hovered around 30 percent in the 1986, while at the end of 2008 office space was about 17 percent vacant, according to NAI REOC Partners, a local real estate company.

Retail space in 1986 was 19 percent vacant. At the end of 2008, it was 13 percent.

And there were about 200 apartment units permitted in 1988, compared with about 4,500 units permitted last year.

Foreclosures also played a more prominent role in the 1980s.

In 1988, 411 commercial properties together valued at more than $306 million were sold at the commercial auction in Bexar County, according to RexReport.com. In 2008, 174 foreclosed properties worth $90 million were sold, according to Foreclosure Listing Service.

“There does not appear to be an alarming number of postings among the quality commercial properties,” said Bonnie Brown of FLS.And at no time since 1970 has unemployment been higher than it was in the late 1980s. The 1986 state unemployment rate was 8.9 percent compared with a 6 percent unemployment rate in December 2008.

 Job cuts and oil losses

Texas usually outpaces U.S. job growth. In 2008, Texas added 153,600 jobs compared with 2.6 million jobs lost in the U.S. But from 1985 to 1988, the opposite was true.

“I remember everybody leaving — project managers leaving, businesses closing, going to other states and looking for work,” said Maryanne Guido, CEO of Guido Brothers Construction Co. “Now all I see are people are coming here.”

San Antonio added 26,700 jobs in 2008, according to the Texas Workforce Commission.

In the '80s, the high job loss meant more vacant office and shopping space. Today, vacant space shouldn't increase too much because of the stable job numbers.

And growth in the military is one key to San Antonio's stability that hasn't always existed. The military is spending $2.1 billion here in base realignments, a move that will also add about 10,000 jobs to the area by 2012.

“San Antonio has its own stimulus package,” said R. Glen Ayers, an attorney with Langley & Banack

In the '80s, Texas was more dependent on the oil and gas industry than it is today. So when the price of oil plunged in the mid-1980s, the Texas economy and the real estate industry fell with it.

In 1986, a barrel of oil averaged just under $28, adjusted for inflation. Currently, it's around $40.

“We have a more diversified local and state economy as opposed to what we had in the '80s,” said Robert Hunt, senior vice president of commercial development with Embrey Partners Ltd. since 1988. 

 Overbuilt

Part of the real estate collapse in the 1980s was caused by a flurry of building in the early part of the decade.

“Because it was easy to get funding and cheap to get funding, there was a lot of overbuilding,” said Kim Gatley, senior vice president and director of research for NAI REOC.

A host of office buildings shot up, including One Riverwalk Place and Bank of America Plaza downtown and the Pyramid Building, Nowlin Tower and One International Centre on the North Side.

San Antonio is faring better today because it's not overbuilt, and the supply of space largely has met the demand, Gatley said.

In the '80s, San Antonio office rents dropped to nearly $10 per square foot per year — they're at more than $20 today — as owners slashed prices just to fill their space.

“Owners were forced to give away property,” Gatley said. “It was pretty crazy.”

And that overbuilding affected the city for years to come.

“It's not just like the switch gets flipped up or down and it changes,” Gatley said. “Basically, we went through the next 10 years without building a major office building.”

In addition to the military construction, today there also are school and government construction jobs in San Antonio, and there also may be future work as a result of the economic stimulus plan, none of which existed in the '80s.

“I don't think there was any city work, there was no school building going on to speak of,” said Tom Guido, president of Guido Brothers. “The private work had dried up, and there was no thrust for San Antonio to grow.”

Taxes and S&Ls

Aggressive lending and a change in the tax law also walloped the real estate business back then.

Savings and loan institutions often lent up to 100 percent of the cost of a project, and when the banks failed, so went the real estate.

“Today, everybody's better capitalized and a lot smarter,” said Tom Rohde, vice president of Rohde, Ottmers & Siegel Realty Services.

In passing the Tax Reform Act of 1986, President Ronald Reagan removed tax shelters for real estate investments. Many investors held real estate for its tax advantages and not its value, and this act caused them to unload their properties, thus sinking real estate values.

Today, the big financial concerns for the industry are apprehensive property buyers and properties at risk of losing value.

Some banks are beginning to devalue the commercial property they hold, Rohde said. If those properties become less valuable, then surrounding properties could see that drop as well.

“We have money on the sidelines that is waiting to get into the market, whereas in the '80s it seemed like there was no money ready to be put back into the market,” Gatley said.

So though the commercial market won't pick up until the cash starts flowing, Texas isn't expected to repeat the 1980s.

“I'm fairly optimistic that Texas and San Antonio are going to ride this out pretty well,” Robert Hunt said.

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

Unemployment Rate by: Washington Post

The U.S. economy lost another 598,000 jobs in January, a larger-than-expected decline that highlighted a weak global economy and the pressure building on companies to cut costs and payrolls.

It was the largest one-month job loss since December 1974, and pushed the unemployment rate to 7.6 percent, from 7.2 percent in December.

That is the highest unemployment rate since the fall of 1992 -- and it would have been higher except for a slight decline in the number of people looking for work, itself a possible sign of economic weakness as people become discouraged from job-hunting.

At present, 11.6 million people are out of work, a headline number likely to figure into ongoing debate in the Senatetoday over the Obama administration's proposed economic stimulus package.

President Obama has warned of possible double-digit unemployment if the government does not act quickly, and called today's news "very troubling."

In announcing the creation of the new Economic Recovery Advisory Board this morning, Obama said, "I am sure that at the other end of Pennsylvania Avenue, members of the Senate are reading these same numbers this morning. I hope they share my sense of urgency and draw the same, unmistakable conclusion: The situation could not be more serious. These numbers demand action. It is inexcusable and irresponsible for any of us to get bogged down in distraction and delay and politics as usual while millions of Americans are being put out of work. It is time for Congress to act."

U.S. businesses and institutions have shed jobs for 13 consecutive months, and the increasing pace of the job losses might indicate worse to come. Since the recession began in December 2007, 3.6 million payroll positions have been lost, with about half of that decline coming in the past three months, according to data released this morning by the Labor Department.

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. 

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

Unavoidable Unemployment doesn't mean Unavoidable Financial Disaster

Suddenly finding yourself unemployed can wreak havoc on your self-esteem not to mention wreaking havoc on your finances.  According to the Dallas Business Journal unemployment rates rose across the Dallas-Fort Worth Metroplex in August.   Ronny Congleton Commissioner of the Texas Workforce Commission said that, “although the Texas unemployment rate of 5 percent is below the U.S. rate of 6.1 percent, it is still a matter of concern.”   Not many people have enough savings to finance themselves throughout months of unemployment yet it is believed that it will take the average unemployed person three months to find their next job.  Without a doubt you should start looking for a new job right away to deal with your financial situation, but what if it takes longer than you anticipated.   Declining bank accounts leave you with little 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. 

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