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

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.

The Bankruptcy Code requires the individual debtor to file a petition and a series of financial reports with the bankruptcy court.  Among these reports is a statement of income identified as “Schedule J.”  For many debtors, it may be the first time, or a first time in a long time, that the families’ monthly expenses have been written down and examined.  Usually there are surprising discoveries while completing this schedule. 

Several monthly expense items are easily determined.  Fixed monthly expenses like your mortgage or rent, auto loan payments, day care, insurance premiums, and cell phone bills are easy to identify.  Fixed monthly expenses are predictable and do not generally fluctuate from month to month.  

Unlike fixed expenses, variable expenses change from month to month.  A good example of a variable expense is an electric bill or transportation expense which may be higher during certain times of the year.  It is a good idea to average variable expenses over six months or a year to obtain a more accurate estimate of this monthly expense. 

Annual expenses are often overlooked.  Some annual expenses are quickly ascertained, like home owner’s association dues or personal property taxes.  Other expenses are much harder to estimate like out of pocket medical expenses.  Again, a yearly average is recommended to find this expense.

 

Discretionary spending may be the most difficult category to determine.  This category includes expenses like food, entertainment expenses and clothing purchases.  Bankruptcy debtors often underestimate discretionary spending and the debtor should either take a critical examination of their lifestyle and spending, or keep receipts for a month to accurately estimate this category. 

It is very important to accurately identify your monthly expenses on Schedule J.  In a Chapter 7 the bankruptcy court may use schedules I (monthly income) and J (monthly expenses) when considering whether you have sufficient income to afford the monthly payment proposed in a reaffirmation agreement.  In a Chapter 13, the debtor must show on Schedules I and J that there is sufficient income to pay creditors or the plan will not be confirmed. 

Completing your bankruptcy schedules is not a mindless check-the-box process.  The federal bankruptcy laws require you to accurately and completely disclose financial information to the court.  Not only must you make your best effort to provide truthful information, but it is in your best interest to use these forms to paint a picture of your financial situation that will help you get the relief that you need.  Carelessness and inaccuracies will cause delays and problems in your case. 

If are buried in debt, consult with an experienced bankruptcy attorney and discuss how the federal bankruptcy laws can help.  Your attorney will work with you to complete the bankruptcy petition and schedules carefully and accurately to get you the relief you need.

The word bankruptcy is derived from two Latin words, bancus, meaning “bench,” and ruptus, meaning “broken.”  The term was used to describe the breakup of a tradesman’s business (often resulting in physically breaking the tradesman’s table or bench, signifying the end of the business).  Early bankruptcy laws were concerned with protecting creditors from insolvent businesses.  Usually this meant total liquidation of the business.  In some cases a creditor could have the tradesman imprisoned for non-payment of a debt. 

Modern bankruptcy law in the United States is more forgiving and promises the individual creditor a fresh start.  The United States Bankruptcy Code is enacted by Congress via authority granted by Article I, Section 8 of the United States Constitution.  United States bankruptcy laws have evolved to protect the honest, but unfortunate debtor and provide a discharge of overwhelming debts.  Debtor’s prisons were abolished in the United States. 

The cornerstone of the bankruptcy fresh start is the bankruptcy discharge, a permanent court injunction that prohibits creditor collection against the debtor.  The bankruptcy discharge is available to individual debtors and is generally ordered at the end of the bankruptcy case.  A discharge is not available to a non-individual, like a businesses or corporation.  The discharge order forbids creditors from contacting the debtor to collect on a debt, or taking legal action against the debtor personally.  The bankruptcy discharge is very broad and is enforced through a contempt action with the bankruptcy court. 

Certain debts are not affected by the bankruptcy discharge including child support obligations, debts obtained by fraud, criminal fines or restitution, most student loans, and certain taxes.  While these debts are non-dischargeable for policy reasons, other common debts like medical bills and credit card debts are discharged by the bankruptcy.  The Bankruptcy Code offers certain protections to the debtor to repay non-dischargeable debts during a bankruptcy case. 

If you are struggling with debts and need a fresh start, discuss your options with an experienced bankruptcy attorney.  The modern bankruptcy law offers many legal options for paying or discharging personal debt.  Learn how a bankruptcy discharge can start you on a path to a fresh financial start.

There is an old saying in the bankruptcy world, “Pigs get fat, hogs get slaughtered.”  It means the honest, but unfortunate bankruptcy debtor will keep enough property to live comfortably and then some.  On the other hand, when the debtor conceals assets, hides income, or attempts to keep more than legally entitled, the bankruptcy process may serve up the hoggish debtor on a silver platter. 

We may be witnessing a good old fashioned hog roast in the media.  Teresa Giudice, star of the Bravo television show The Real Housewives of New Jersey, is embroiled in a fight with a New Jersey bankruptcy trustee.  Teresa and her husband Joe filed for Chapter 7 protection in late October, 2009, but have yet to receive a discharge from the bankruptcy court.   

On June 30, trustee John W. Sywilok filed an adversary complaint seeking to deny the Giudice’s bankruptcy discharge.  The trustee alleges that the Guidices “concealed documents, records and papers from which the Defendant's financial condition or business transactions could be ascertained.”  The trustee also complains that the Guidices failed to disclose financial or ownership interests in several businesses, including a pizza parlor and a Laundromat, as well as a book written prior to the bankruptcy.   

Recently the trustee produced documents showing that the Giudices when on a $60,000 shopping spree before and after filing bankruptcy.  During court testimony reported by the New York Post, Sywilok claimed that over $45,000 worth of furniture was purchased, and $11,000 of that just two days before filing bankruptcy.  

The trouble the Giudices face with the bankruptcy court is very real and very serious.  If the court determines that assets or income were intentionally concealed, the debtors may be denied a discharge.  An auction of assets has been ordered by the bankruptcy court, so a denial of discharge will mean that the Giudices lose their property, creditors will receive the proceeds of the auction (including a substantial payment to the trustee as compensation), and any remaining debt will survive the Chapter 7 case.  Consequently, the Giudices may face additional state court litigation on their debts and garnishment of future earnings.  If the case is egregious enough, the bankruptcy court may refer the case to the Department of Justice to investigate possible bankruptcy fraud, a federal criminal act.   

Regardless of the outcome, the Giudice case is an excellent example of how not to act before and during your bankruptcy case.  If you need relief from your debts and are willing to deal honestly and fairly with the trustee and your creditors, bankruptcy can discharge your debts and give you a fresh financial start.  Consult with an experienced bankruptcy attorney today and discover how the federal bankruptcy laws can help you and your family.

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.

When a large corporate bankruptcy hits the news chances are the company has filed for Chapter 11 bankruptcy protection.  The title of Chapter 11 of the Bankruptcy Code is “Reorganization” and while companies like General Motors or Washington Mutual make headlines, individuals are also eligible to file under Chapter 11. 

In some cases, Chapter 11 may be the only option for an individual to file bankruptcy.  Eligibility for Chapter 7 is dictated by a “means test” that determines the debtor’s ability to repay debts.  Those who are able to repay their creditors may consider Chapter 13, but debt limits may disqualify the debtor from Chapter 13.  The debt limits for Chapter 13 are currently $360,475 for unsecured debt and $1,081,400 for secured debt. 

An individual debtor who files for Chapter 11 bankruptcy protection will follow many of the same (or similar) procedures that apply to Chapter 13 cases.  The debtor must file a petition and schedules of assets, liabilities, income and expenses; a plan to pay creditors; and attend a meeting with a bankruptcy trustee.  The debtor is required to commit all disposable income to repaying debts for five years.  Disposable income in Chapter 11 is determined differently than in a Chapter 13 case.  The bankruptcy court compares the Chapter 11 debtor’s monthly income against the reasonable monthly expenses. The result may be different than the disposable income amount determined in a Chapter 13 case. 

Creditors are classified as secured creditors, unsecured creditors entitled to priority, and general unsecured creditors.  The debtor’s plan is submitted to creditors for approval and the creditors are entitled to vote to accept or reject the plan.  If the creditors reject the proposed treatment by the plan, the bankruptcy judge can still approve the plan, provided that creditors receive as much during the plan as they would receive if the debtor’s assets were liquidated.  Ordinarily a Chapter 11 debtor will receive a discharge after completing all plan payments. 

A Chapter 11 bankruptcy case is a complex legal proceeding requiring the leadership of a skilled and experienced bankruptcy attorney.  If you are considering a bankruptcy filing, consult with an experienced attorney and discover your legal options.

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. 

If you discover an omitted creditor during or after your bankruptcy case, inform your attorney immediately.  You and your attorney can discuss the proper procedure for dealing with an omitted creditor.

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

 

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

Pop quiz: What do Walt Disney, Mark Twain and Larry King have in common? 

1. They each filed a personal bankruptcy and went on to have extraordinary success in life.

Bankruptcy is not a professional or financial death sentence.  Just ask Donald Trump who has filed multiple Chapter 11 reorganization bankruptcies for his casinos.  Bankruptcy is a financial tool that uses the federal law to protect the honest, but unfortunate debtor.  Bankruptcy allows the debtor the opportunity to restructure finances and formulate a plan to repay or discharge debt.  Bankruptcy provides the debtor a fresh start to a new financial future – one free of the pressures from debt collectors. Free Consultation 

Here’s another question: What honor did Kim Basinger and Burt Reynolds receive after filing personal bankruptcy? 

1. Each was nominated for an Academy Award in 1997.  Basinger won an Oscar for best supporting actress for L.A. Confidential, and Reynolds was nominated for best supporting actor for Boogie Nights.

Bankruptcy can help you and your family build a more solid financial foundation.  Henry Ford created another automobile company after his first company filed bankruptcy.  It’s safe to say that Ford Motor Company would not exist today without the help of the federal bankruptcy laws.  The same can be said for General Motors, which filed for Chapter 11 bankruptcy in 2009. Free Consultation 

How can bankruptcy help you?  The bankruptcy laws can stop a foreclosure sale, a pending lawsuit, and creditor harassment.  Bankruptcy can protect your family assets and retirement accounts from creditors.  Bankruptcy can eliminate debt or give you time to repay loans including delinquent car and home payments.  The federal bankruptcy laws helped over a million people get relief during 2009, including celebrities Stephen Baldwin, Sinbad, and Bernie Kosar. Free Consultation 

As Abraham Lincoln (filed bankruptcy in 1833) once said, “The best thing about the future is that it comes only one day at a time.”  If you are experiencing overwhelming financial difficulty, take the first step to a better future by speaking with an experienced bankruptcy attorney today.

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

There are generally two types of “bad checks.”  The first type is the kind that is “payable on demand” meaning that it is expected that the bank will honor the check when it is presented.  This is the most common type of bad check.  When you write a check that the recipient believes is “payable on demand,” and the check is returned for Non-Sufficient Funds (NSF), you may have committed a criminal act.  Depending on the amount of the bad check written, a person can be prosecuted for a misdemeanor or a felony.  Even if you later make payment on the check there may be criminal charges or substantial fees and/or fines. Free Consultation 

A NSF “payable on demand” check is not dischargeable in bankruptcy and bankruptcy will not exonerate you of a criminal act.  The bankruptcy automatic stay does not apply to stop criminal prosecutions.  Likewise, any debt to the victim of the bad check is now considered criminal restitution, also not dischargeable in bankruptcy.  Any restitution, costs, and fines are not discharged by the bankruptcy. 

While criminal prosecution of a bad check case is not affected by your bankruptcy, private collection is stopped by your bankruptcy.  Any civil legal action concerning a bad check must stop, and any civil garnishment or other collection action must cease. Free Consultation 

The second type of bad check is the post-dated check.  These checks include payday loans and other checks that are essentially promises to pay in the future.  You and the receiver are aware that the check is not presently negotiable.  The bank will not pay the check because you don’t presently have the money in your account.  

With a few narrow exceptions, being unable to pay a post-dated check is not a criminal act.  However, it may be a crime to write a post-dated check that you intend to include in your bankruptcy.  Typically the recipient of the post-dated check would have to file an adversary case with the bankruptcy court and prove that you committed fraud in writing the check with no intention to ever pay it. Free Consultation 

If you have outstanding bad checks and are considering bankruptcy, discuss your situation with an experienced bankruptcy attorney.  Your attorney can advise you on the best way to deal with a bad check during your bankruptcy. 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

When a bankruptcy debtor inherits money from someone who dies within 180 days of the date the debtor filed bankruptcy that money becomes part of the debtor’s bankruptcy estate.  The inherited money that becomes part of the bankruptcy estate is used to pay your creditors.  This is true even if you have received a discharge and your Chapter 7 bankruptcy case has closed.  Free Consultation  

For instance, if you file a Chapter 7 bankruptcy on April 1, and your great aunt dies on September 28 (within 180 days of the bankruptcy filing date), any money you receive from your great aunt’s estate must be turned over to the bankruptcy trustee.  It does not matter when you receive the money or when your case was discharged.  You might receive the inheritance years later, and it must be turned over to the bankruptcy trustee for payment to creditors.  You may be charged with bankruptcy fraud (a federal crime) if you fail to inform the trustee of your inheritance or turn over the money. Free Consultation 

If the trustee receives inherited money, your case will be reopened and a bankruptcy estate is formed.  Notices to creditors are sent and the trustee will distribute the funds to creditors.  In some cases you will be able to keep some of the money, and in other cases some of the funds may be returned.  Free Consultation  

Inherited property is treated the same as cash.  If you receive a car or a family heirloom, the property must be turned over to the trustee.  In some cases you may be able to exempt inherited property or the trustee may consider the value of the inheritance too small or burdensome to liquidate and distribute. Free Consultation 

If you are considering bankruptcy and are aware of a significant chance of someone leaving you inheritance money, speak with your attorney.  There are options to avoid turnover including rewriting the will to cut you out, or setting up a spendthrift trust.  A spendthrift trust cannot be reached by creditors.  Consult with an attorney to properly create a spendthrift trust or rewrite a will.  There is nothing illegal or immoral about estate planning and your loved one may prefer leaving money to you rather than your creditors. Free Consultation

It is no surprise that illness is a chief contributor to personal bankruptcy.  In fact, a 2009 study released by Harvard researchers claims that 62% of all personal bankruptcies during 2007 were caused by health problems. Many individuals struggling with medical bills need relief, but worry about how a bankruptcy will affect their ability to receive medical care in the future. 

Under the Emergency Medical Treatment and Active Labor Act hospitals and ambulance services are required to provide emergency healthcare to a person regardless of ability to pay.  This federal law requires appropriate medical screening, necessary stabilization, and transfer to an appropriate facility for treatment of an emergency condition.  In broad general terms, if you have an emergency medical condition, a hospital ER must treat you. 

If you do not have an emergency medical condition, the hospital or doctor may refuse treatment to a bankruptcy debtor.  It is unusual for a hospital to deny service after bankruptcy unless the patient demonstrates an inability to pay the new bill.  If you have insurance or other form of guaranteed payment, the hospital will likely treat you. 

Individual physicians are more likely to deny services if you have discharged their bill.  Many bankruptcy debtors want to continue a relationship with their personal doctor, and consequently make payment arrangements after the bankruptcy has been filed. While the bankruptcy law requires the debtor to list every creditor, there is no prohibition against paying a debt after the bankruptcy.  Paying the debt does not renew or create a new obligation and the doctor may not take action to collect a discharged debt (i.e. writing or calling to encourage payment). 

If you need to include medical bills in your bankruptcy, but worry about receiving future medical care, consult with your bankruptcy attorney.  In most cases there is no interruption in medical care or treatment.  Know your legal rights and be informed of how your bankruptcy will affect your ability to receive medical care.

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.  

Almost all debtors in bankruptcy are honest people who have experienced great financial difficulty.  One of the most common questions asked by debtors is, “Do I need to list a creditor I intend to repay?” 

The answer to this question is very simple: “Yes!”  You must list all of your debts and each of your creditors, even those you intend to repay.  There are two ways to repay a debt after bankruptcy.  The first is by voluntary payment.  The second is with a reaffirmation agreement. 

Voluntary payments made after your bankruptcy discharge neither create a new legal obligation nor invalidate the discharge order.  Any payment you make on a discharged debt is the result of a moral obligation since the legal obligation to pay the debt has been discharged by the bankruptcy court.  The creditor is still prohibited from contacting you or trying to collect on the debt. 

A reaffirmation agreement is a new contract between you and your creditor.  It is fully enforceable after the bankruptcy, so if you default on the obligation the creditor can sue you and repossess any property securing the agreement.  Reaffirmation agreements are commonly used to continue auto and home loans.  The debtor agrees to continue the legal obligation to pay the loan, and the lender agrees to not repossess the collateral.   

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.  The Bankruptcy Code requires that the debtor demonstrate that the paying a reaffirmed debt will not create an undue hardship for the debtor or the debtor's family.  While a reaffirmation agreement can be used for credit card agreements and other unsecured loans, bankruptcy courts are reluctant to approve these agreements without exceptional circumstances. 

You are free to continue to pay a debt after your bankruptcy.  Congress specified in the Bankruptcy Code that “Nothing contained in. . . this section prevents a debtor from voluntarily repaying any debt.”  There are several legal options for repaying a debt after bankruptcy, as well as several avenues for debt restructuring.  Discuss your specific situation with your bankruptcy attorney and discover your options.  

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. 

Generally, in order to discharge a tax debt during bankruptcy, the tax debt must meet all four of the following criteria: (1) the tax must be income taxes or “gross receipt taxes;” (2) the tax must be over three tax years old; (3) your tax return must have been filed on time; and (4) the tax debt must not be amended or challenged by the IRS as inaccurate. 

There are four different types of tax debts that are automatically excluded from your bankruptcy discharge: 

1. unpaid taxes due within three years of the bankruptcy filing;
2. unpaid taxes for returns filed late, but within two years of the bankruptcy filing;
3. unpaid taxes for tax years when the debtor did not file a return; and
4. unpaid taxes due when the debtor filed a fraudulent return or tried to evade the tax obligation.

 

If you have any question whether your tax debt can be discharged during your bankruptcy, consult with your attorney.  Some tax penalties can also be discharged, so be sure to discuss exactly what portion of your tax debt will be discharged, and what portion will survive.

 

Tax liens can be stripped off during a Chapter 13 bankruptcy to the extent that the lien is more than the equity in property.  Tax liens cannot be stripped or otherwise avoided in Chapter 7. However if the tax is dischargeable in a Chapter 7, the bankruptcy court should determine the extent of the tax lien against your property.

 

Property taxes are treated differently after bankruptcy.  Your personal obligation to pay property taxes can be discharged if the tax was last payable without penalty more than one year before you file bankruptcy.  However, property taxes are secured with a lien which will generally survive the discharge.  If you keep the property, you must pay the tax debt after the bankruptcy.  If the property is surrendered during the bankruptcy, you will owe nothing. 

The intersection of tax and bankruptcy is a complicated area of the law.  It is important to address any tax issues early in your case and have a clear understanding of how you and your attorney will deal with your tax debt during your bankruptcy.

For many, walking away from a home loan is the right decision.  The recent economic downturn has left many homeowners owing substantially more than their home is worth and it may take many years of payments simply to break even.  In other cases homeowners have suffered a job loss, a reduction in pay, or other financial change that makes their present home unaffordable. 

The down-side to walking away from a home is that the debt still remains.  The mortgage company will take your home through foreclosure and sell it, sometimes at a steep discount, and you will be liable for the deficiency balance.  The mortgage company may try to collect or it may assign your debt to a collection company.  Harassing phone calls, threatening letters, and finally a lawsuit are inevitable.  Often the lawsuit is filed years later and just before the statute of limitations expires.  By then you may have rebuilt your credit and be in a much better financial situation.  The effect of this lawsuit can be devastating. 

Bankruptcy law can help you walk away and discharge your obligation to pay any balance on a home loan once and for all.  The instant you file bankruptcy you are under the protection of the United States Bankruptcy Court and creditors are prohibited from taking any collection action against you.  The bankruptcy filing immediately stops any foreclosure or repossession action, and any lawsuit.  This protection, called the automatic stay, extends through the duration of your bankruptcy case.  A creditor must seek permission from the bankruptcy court in order to start or continue the foreclosure process while you are under bankruptcy protection.  The filing of a bankruptcy case generally forestalls the foreclosure process for months and gives you the opportunity to walk away on your own terms. 

At the conclusion of your bankruptcy case you will receive an order of discharge from the bankruptcy judge.  This order permanently prohibits all discharge creditors from taking collection action against you.  However, once the bankruptcy case is closed, the mortgage company can commence foreclosure proceedings to take possession of your home, but cannot collect money from you personally. 

If you are considering walking away from your home, speak with an experienced bankruptcy attorney and learn how bankruptcy can help mitigate your financial exposure.  An experience bankruptcy attorney can explain your options and help you decide on a path that makes the most financial sense for your family.

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.

A bankruptcy discharge is an order from the United States Bankruptcy Court.  The discharge is a court injunction prohibiting any attempt to collect on a discharged debt.  Creditors are strictly prohibited from contacting the debtor by mail, phone, or otherwise; filing or continuing a lawsuit; attaching wages or other property; or taking any other action to collect a discharged debt.  A creditor that violates this order is subject to contempt of court and may have to pay damages and attorney's fees. 

A creditor that contacts you in an effort to collect a discharged debt is in violation of the bankruptcy court’s discharge injunction.  Usually such contact is a mistake and the creditor is unaware of your bankruptcy discharge.  While claiming ignorance is not a valid excuse for violating the bankruptcy court order, informing the creditor that you have filed bankruptcy and received a discharge of the debt is often enough to stop future collection actions.  The creditor may want to know certain information about the bankruptcy (case number, date of discharge, chapter, etc.) to update their records and stop further collection efforts.  You can answer these questions or simply refer the creditor to your attorney. 

It is good practice to document any post-discharge collection action by creditors.  While these collection attempts are often mistakes, a main purpose of the bankruptcy discharge is to allow you to live your life free from creditor harassment.  The bankruptcy discharge applies to the debt and enjoins any collection of the debt.  Consequently, the discharge injunction applies to the original creditor, collection agencies, attorneys, and any other subsequent collector. 

Your bankruptcy discharge is legal protection against creditor harassment concerning discharged debts.  If you are repeatedly contacted by a creditor after your bankruptcy discharge, document the creditor contact and report it to your attorney.  The law is on your side and will protect your right to a fresh start free of creditor harassment.

Filing bankruptcy is a very personal process. Many clients worry that their friends and neighbors will learn about their bankruptcy. A common question is, “Who will know about my bankruptcy?”

First, personal bankruptcy cases are generally not reported in the local newspaper. Unless you are a celebrity or public figure, your bankruptcy is not newsworthy. More than 1.4 million consumer filings were recorded last year, so many larger newspapers would have to publish thousands of bankruptcies in their papers each month. It is not cost-effective for a newspaper to search through the bankruptcy court records to find individuals who filed in their distribution area and use valuable print space to report on personal bankruptcy cases.

Second, the bankruptcy laws require notices of the bankruptcy filing to go out to the following:

1. Everyone you owe money (called “creditors”);
2. The bankruptcy trustee;
3. Co-signors and co-debtors; and
4. You and your attorney.

 

Under special circumstances other notices are sent, for instance if you owe taxes, or if you want to terminate a lease or contract. Family, neighbors, friends, your employer, your bank, etc. will generally not receive notice of your bankruptcy. A common exception to this general rule is when the debtor causes a voluntary wage withholding to pay chapter 13 plan payments.

Third, while bankruptcy court proceedings and trustee meetings are open to the public, it is unusual for the press or members of the public to attend. Most of these meetings are very brief and can even be a little boring.

Finally, other than receiving notice of the bankruptcy filing from the bankruptcy court, there are only a few ways to learn of a bankruptcy case. The most common way is to contact the bankruptcy court directly. Most bankruptcy courts have an automated telephone system that will provide basic case information to the public.

Filing a bankruptcy petition is generally a private and confidential process. While there are no guarantees that your friends and neighbors will not learn about your bankruptcy, chances are they will not unless you decide to tell them. However, every case is different. If you have specific questions about the effects of filing bankruptcy, consult with an experienced bankruptcy attorney.

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.

Deciding whether to file bankruptcy can be difficult. There is no “bright line” test that signals when a bankruptcy is appropriate to solve a debt problem. For many debtors, it is not one issue, but a combination of debts that makes bankruptcy the right choice.

Below are common debt patterns that attorneys see from their bankruptcy clients. If you are experiencing one or more of these debt problems, a bankruptcy filing can improve your financial situation:

* Your wages are garnished or your bank account is attached
* You are unable to make even minimum payments to your creditors, or you struggle to make minimum payments each month
* Collectors harass you at home and at work
* You pick and choose what creditors to pay on-time
* You are caught up in a cycle of payday loans
* You are paying off large unsecured debts (e.g. credit cards, medical bills, etc.)
* You are at risk for repossession or foreclosure
* You are being sued for a debt
* The IRS is threatening collection action

 

Whether to file bankruptcy is a decision that is unique to your personal situation. If you are struggling with debt, a bankruptcy filing stops collection action and provides breathing room so you can decide how to move forward with your finances. The bankruptcy laws offer the choice of repayment or the outright discharge of most debts under the supervision of a federal court. In most cases there is no payment to unsecured creditors and the debtor does not lose any property.

If you are experiencing a persistent debt problem, bankruptcy may be the right choice for you. Discuss your situation with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can eliminate your financial burdens. Get started on a brighter financial future today!

In 2004 and 2005, the banking industry spent millions lobbying for tougher bankruptcy laws. Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. collectively spent $25 million during that period. The big banks' efforts paid off in a major overhaul of the Bankruptcy Code in 2005 making it more difficult for struggling families to discharge credit card debt. However, the banks did not foresee the current housing crisis, and new research suggests that the 2005 changes to the Bankruptcy Code may have caused mortgage default rates to rise.

A paper published by the National Bureau of Economic Research states that the 2005 changes “raised the cost of filing and reduced the amount of debt that is discharged" thereby making it more difficult for debtors "to shift funds from paying other debts to paying their mortgages[.]" In other words, before the 2005 changes, many debtors struggling with a mortgage arrears and credit card debt could file bankruptcy, discharge the credit card debt, and free-up money to pay the mortgage. The new bankruptcy provisions make this process more difficult. As a result, fewer debtors are able to afford to save their homes through the bankruptcy process.

Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank said, "Be careful what you wish for. [The banks] wanted to make sure that people kept paying their credit cards, and what they're getting is more foreclosures."
If you are facing overwhelming debt and want to keep your home, there are many alternatives available to you. An experienced bankruptcy attorney can review your finances and explain your legal options for discharging or repaying your debts. Bankruptcy is not the only option for saving a home from foreclosure, and many cases are successfully resolved using a combination of bankruptcy and non-bankruptcy methods. Get the facts today and solve your debt dilemma!

 

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.

The bankruptcy reform legislation enacted in 2005 requires bankruptcy debtors to complete a personal financial management course. The debtor must file a certificate of course completion with the bankruptcy court before an order of discharge can be entered. This class averages about two hours in length and instructs the debtor on issues such as developing a budget, money management, and use of credit.

Many bankruptcy debtors initially resent this course requirement.   However, most debtors report that they learn useful information and consider the course worthwhile. That is not surprising as most personal financial management studies indicate that our nation suffers from financial illiteracy. For example, a 2009 survey of 1,000 adults by the National Foundation for Credit Counseling found that:

• 41 percent graded themselves C, D, or F on their knowledge of personal finance;
• 42 percent surveyed kept close track of their spending;
• 64 percent have not ordered a copy of their free credit report in the past year;
• 33 percent do not contribute towards their retirement

Financial illiteracy can be a major contributor to personal financial failure. Some debtors have become overwhelmed by debt because they lack the tools for effectively managing their personal finances. The Personal Financial Management Course required by the bankruptcy laws is an opportunity for debtors to learn some basic management techniques. The aim is to educate the debtor to adopt a more disciplined and deliberate approach in managing household finances. 

The opportunity for a fresh start after bankruptcy means much more when you have a plan for your future financial success. If you are struggling with debt, speak to an experienced bankruptcy attorney and make the choice to get control over your personal finances.

There is no formal announcement made when someone files for bankruptcy, but bankruptcy filings are public records, which means the information is available to anyone who looks for it. However, under normal circumstances, the only people who will know you filed for bankruptcy are the people that you choose to tell.

Note that if you are asked on a job application, you do have to disclose that you filed for bankruptcy.

In general, though, your friends, family members and co-workers won’t know that you filed for bankruptcy unless you choose to tell them.

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

“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. 

 

 

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.

 

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. 

 

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.

One of the most devastating life events can be an illness. It can affect anyone at any time.And what most people do not realize is that even if you are lucky enough to have medical insurance, not all medical costs are covered. Therefore, you can end up with huge medical bills and limited funds to pay them.

As a result, a substantial number of people in Austin (and many other parts of the country) are filing for Chapter 7 bankruptcy to eliminate medical debts. When you file for Chapter 7, your medical debts are discharged and you get to keep all of your property. The process takes approximately four months and you can then immediately start re-building your credit. 

 

Although the initial filing requirement is simple enough--you only have to live or have property in the United States, there can be complex issues that may require the assistance of an Austin bankruptcy lawyer. For example, you may be wondering when to file. A general suggestion is to not file until all anticipated bills have been incurred. If you are still sick and require expensive medical care, the filing should be delayed. A consultation with an Austin bankruptcy lawyer can explain these and many other issues in more detail.

 

 

For a free bankruptcy consultation to learn more about discharging medical debts through Chapter 7, contact Austin bankruptcy law firm Fears | Nachawati Law Firm via phone at  (866) 705-7584 or by e-mail at info@fnlawfirm.com.

Credit-card holders in Dallas and Fort Worth should benefit from House Bill, HR 627, which passed the House on Thursday.  The Credit Card Holders' Bill of Rights passed following lobbying by President Obama and the White House Administration.  If the Bill becomes law, the new provisions will not take effect for a year, other than one key requirement that customers get 45 days' notice before interest rates are increased.  The requirement may take effect in as soon as 90 days.  The changes in credit cards could cost the banking industry more than $10 billion a year in interest payments.  Because of the recession, many people have defaulted on their credit card obligations.  This Bill will certainly ease the burden of many households in the Dallas Fort Worth area and hopefully stymie the number of bankruptcy filings.  Questions or legal information inquiries concerning this Bill and its potential effect on individuals can be directed to 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.  

These are tough times on the financial front. However, you don't have to watch your retirement hopes slip away from you.  You’ve been planning for your future and saving for retirement. But what do you do when your expenses outgrow your income? Is it wise to make early withdrawals from your retirement to pay for your expenses today? Many retirement plans penalize for early withdrawal. According to IN.gov, taking a lump sum distribution. “gives you the freedom to do whatever you want with the money.  But beware: at the time you cash out, you will owe all applicable taxes. If you're younger than 59-1/2, you'll pay a 10 percent penalty plus state and federal income tax on the full amount of your distribution (including the penalty.) This choice may also affect your ability to receive unemployment compensation . . . Also, if you are vested, you will lose your right to a lifetime pension benefit.” 

If you are overwhelmed by debt and cannot seem to catch up on your bills it is important to know there are alternative solutions to tapping into your retirement. If you are not ready to empty your nest egg solely to survive today and potentially exhaust your funds for tomorrow you may want to consider bankruptcy. For more information on bankruptcy please contact Fears | Nachawati Law Firm, Phone (214) 890-0711, 4925 Greenville Avenue, Suite 715, Dallas, Texas 75206.

Today, WallStreet was devastated following reports that Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy early Monday morning and said it will slowly wind down its operations after being in business for 158 years. At $639 billion, Lehman's is the largest bankruptcy filing in U.S. history--easily surpassing the Enron and WorldCom collapses combined. Lehman filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court of the Southern District of New York. The company's broker-dealer subsidiary and other parts of Lehman were not in the bankruptcy filing. Shares of Lehman were down 90% to around 40 cents a share. According to the details of the bankruptcy filing, Lehman held consolidated assets totaling $639 billion and total liabilities of $613 billion. The largest creditor to Lehman Brothers is Citigroup (C: 15.34, -2.62, -14.58%), which has $139 billion in bond debt, followed by The Bank of New York Mellon (BK: 38.35, -1.60, -4.00%), which had a combined $17 billion in bond debts with Lehman. In other liabilities, Japanese bank AOZORA loaned Lehman $463 million, while Lehman also has an outstanding bank loan with Mizuho Corporate Bank worth $289 million.  For questions regarding bankruptcy, call the Fears | Nachawati Law Firm, Phone (214) 890-0711, 4925 Greenville Avenue, Suite 715, Dallas, Texas 75206.

The partners of Fears | Nachawati Law Firm were selected to give a presentation to Bankruptcy Lawyers and Practitioners at a continuing legal education seminar in Barcelona, Spain.  The presentation was a success, as lawyers throughout Texas attended the seminar in an effort to learn about the latest trends in Consumer Bankruptcy Law.  More about the presentation or press questions can be directed to the law firm's assistant at (214) 890-0711.

Oftentimes a person or family member suffers a catastrophic illness that leads to mounting medical bills not covered by insurance, job loss, divorce, and high credit card debt. Filing a chapter 7 (sometimes referred to as a “liquidation filing”) bankruptcy can be a solution for you. Not only will it help you out of the astronomical amounts of debt, it could help increase your credit score.
Here are some ways that Chapter 7 Bankruptcy may help increase your credit score and help you get your life back on track:
• Depending on your due diligence and ability to procure new credit, being back in the 600 range or higher in a short period of time after filing Chapter 7 Bankruptcy is possible.
• You can apply for credit immediately after your bankruptcy is over.
• You can get a new vehicle loan as soon as a month after your bankruptcy is over.
• If you have the income, you may qualify for a mortgage 2 years after your bankruptcy is over.
• By buying a new home, vehicle, or getting new credit cards, your credit score may rise in a short period of time.
Remember that filing a Chapter 7 Bankruptcy can help get you debt free and let you start again with a clean slate. For legal assistance and more information please contact the attorneys and counselors of Fears & Nachawati.
Fears and Nachawati Attorneys & Counselors
4925 Greenville Avenue
Suite 715
Dallas, Texas 75206
Phone: (214) 890.0711
fears@fnlawfirm.com
*Principal Office
*Se Habla Espanol
 

The rise of bankruptcy filings have increased in Dallas/ Fort Worth Metroplex due to job loss, divorce, medical bills, disability, identity theft, and the difficult economy we are facing today. If you are facing foreclosure, huge amounts of debt, repossession, bankruptcy may be the only realistic way out. Our lawyers are here to help. Contact the lawyers at Fears & Nachawati to find out about getting rid of debt and getting a fresh start.

The most common types of bankruptcy are set forth below:
Chapter 7 Bankruptcy: (Sometimes referred to as a “Total Liquidation”) If you have little property and can’t make your basic minimum credit card payments, Chapter 7 Bankruptcy might be the right option for you. Chapter 7 is different from other bankruptcy filings because the debtor does not typically need to make any further payments to creditors such as credit card companies once the bankruptcy court issues a bankruptcy discharge letter.
Chapter 13 Bankruptcy: (Referred to as a “reorganization”) Chapter 13 Bankruptcy can help to adjust debt and obtain reduction or relief on secured debt such as a house that may be in foreclosure. Even if your creditors disagree, under Ch. 13, people typically are allowed to retain their secured property while making reasonable payments to creditors that are oftentimes much lower than the original amount owed.
Please contact the attorneys of Fears & Nachawati for more details. They will provide you with general legal information and consult with you concerning whether bankruptcy is the right choice for you.
Fears and Nachawati Attorneys & Counselors
4925 Greenville Avenue
Suite 715
Dallas, Texas 75206
Phone: (214) 890.0711
fears@fnlawfirm.com
*Principal Office
*Se Habla Espanol