Declaring Bankruptcy: A Strategy for Twenty-Somethings?

If you’re in your twenties, things could be a little rough right about now. For recent college graduates, job prospects are tough. Interest rates on college loans – and for debt in general – are on the rise. Moreover, statistics suggest that you’re likely to go in-and-out of the job market, make several expensive moves and experience costly personal turmoil in the near future. With this in mind, declaring bankruptcy may be tempting.

 

For some twenty-somethings, declaring bankruptcy may be the right decision. Filing Chapter 7 or Chapter 13 bankruptcy can be like hitting the “reset” button, letting you shed credit card debt, become revenue positive and reduce your stress level. And for debtors who end up so deep in debt that bankruptcy is the only way out of the hole, filing sooner may be better than filing later.

 

On the other hand, other twenty-somethings may make the wrong choice if they file. Student debt is infamously difficult to shed in bankruptcy, meaning that your primary financial obligation may stay on your balance sheet. Moreover, by putting a personal bankruptcy on your credit rating, you could reduce your ability to access the credit you need to start out in life. This includes formal credit – like a car or home loan – as well as informal credit – like whether an apartment owner will rent to you.

 

The bottom line is that these decisions are difficult and that for many debtors in their twenties, it’s best to get good advice. Fortunately for you, the attorneys at the law firm of Fears Nachawati specialize in this area of law and, as a result, can guide you through the tough decisions you may face. Find out how we can help by contacting us today. The consultation is free and the advice could be priceless.

The Power of the Automatic Stay

If you’re behind on your debts, it probably feels like you’re at a disadvantage when it comes time to negotiate with your creditors. And, in many ways, you may be. However, for debtors who declare bankruptcy, one provision of the Bankruptcy Code in particular – the automatic stay – may level the playing field.

 

The automatic stay is sometimes referred to as “the big stop sign.” In general, the automatic stay puts a stop on all legal proceedings, including wage garnishments and the repossession efforts of creditors. For people who are in a losing battle for their home, car, paychecks or home furnishings, the automatic stay could be just what they need.

 

On the other hand, it’s important to understand that although the automatic stay is powerful and useful, it isn’t a silver bullet. The automatic stay has its limits. For instance, it won’t put an end to child support payments or criminal proceedings. And if you don’t make monthly payments on your secured loans, its benefits could be short-lived.

 

The dedicated, experienced and knowledgeable bankruptcy professionals at the law firm of Fears Nachawati are prepared to answer your questions about the automatic stay and the many other bankruptcy provisions that might help you. For your free consultation, call us today. We’re ready to help you.

Bankruptcy is Not Insolvency

Although down-on-their-luck debtors are often said to be “bankrupt,” that turn-of-phrase is a bit inaccurate. While it’s true that people who can’t pay their debts often declare bankruptcy, the two terms mean different things.

 

An individual is insolvent when he or she cannot meet his or her financial obligations as their debts come due. An individual is bankrupt when he or she takes a certain legal action, namely, filing bankruptcy, wherein he or she files a petition with a bankruptcy court as provided under federal law (the Bankruptcy Code).

 

The difference is more than mere semantics. An individual who is insolvent may not chose to declare bankruptcy. Creditors may exercise their rights under state law or they may simply wait and hope that the debtor makes a payment at a later time.

 

Likewise, a bankrupt debtor is not necessarily insolvent. The Bankruptcy Code does not impose an insolvency requirement. As a result, some debtors decide to make a strategic bankruptcy filing, declaring bankruptcy before they hit rock bottom. Consequently, they are often left with more available financial assets and cash-on-hand than if they waited until the bitter end.

 

Are you considering declaring bankruptcy, regardless of whether you happen to be insolvent? You may have questions and, fortunately, as experienced bankruptcy professionals, we may have answers. Find out whether the attorneys at the Dallas law firm are prepared to help you by talking to us today. With years of experience, we help struggling debtors get back on their feet. For your free consultation, call today.

Disclose Your Lawsuits

Every year, many Americans unexpectedly suffer a personal injury and must confront large and growing medical bills. They are unable to pay not because they didn’t prepare or spent foolishly; they simply can’t afford the care their injury demands. As a result, they decide to file for personal bankruptcy and the protection of bankruptcy law.

 

In a large number of instances, their decision is the right one. Bankruptcy gives their family and their pocketbook a little breathing space. It also opens important conversations with their creditors, including the health care providers who offered medical services. Lastly, it also let’s them consider whether to move forward with any personal injury claims associated with the party who caused their injury.

 

If this situation sounds familiar, it’s important to remember: you must disclose any active personal injury litigation in your bankruptcy filing. Although it may not feel like your rights have monetary value, that’s exactly how the law – and your creditors – see it. If you’ve sustained an injury because of someone else’s carelessness and you’ve filed a lawsuit in order to prosecute your claims, you must disclose that lawsuit. In the event of a successful tort action, your creditors may have a claim against those proceeds.

 

Don’t run afoul of federal bankruptcy law by failing to disclose pending litigation to which you are a party. It’s a relatively easy misstep to avoid – and an important one. Do you have questions about the relationship between your tort law claims and your bankruptcy filing? The attorneys at the Dallas law firm of Fears Nachawati are prepared to advise you. Talk to us today to schedule your free consultation.

Are Payroll Cards Part of Your Bankruptcy?

Increasingly, national retailers are adopting a new way to pay employees: payroll cards. In the last several years, some national employers like Walgreen’s, McDonald’s and Wal-Mart have begun paying employees with payroll cards instead of cash or check.

 

Similar to debit cards, payroll cards have many of the benefits of other A.T.M.-compatible cards. Like debit cards, payroll cards may be used to purchase items online. Employees can check their account balance with a few clicks of a mouse or touches on a screen. And by holding digital currency rather than a check, unbanked employees avoid the fees of a check cashing service.

 

Of course, as with debit cards, payroll cards have detriments, too. If a cardholder uses an out-of-network A.T.M., they may face a different set of fees. Also, payroll cards can be inconvenient for people who need ready cash for a variety of purposes; it can be difficult to know how much to withdraw at the A.T.M.

 

But what is most important at the moment is not just the virtues and drawbacks of payroll cards. It’s whether these employers received the consent of their employees before dramatically altering the way they compensated their workers. That’s the question that some state attorneys general want to answer. It’s a question you may want to answer, too.

 

If you’re facing financial distress in part because of the difficulties of managing your payroll card, you may consider discussing that with an attorney from the dedicated firm of Fears Nachawati. With years of experiencing handling consumer claims and consumer bankruptcies, we’re prepared to help you consider whether you have valuable claims with respect to your payroll card. Let us advise you. Contact us today for your free consultation.

Elderly Debtors Win in Fourth Circuit Appeals

The first of July was a red-letter day for senior citizens considering whether to file for Chapter 13 bankruptcy. The Fourth Circuit Court of Appeals held in Ranta v. Gorman (In re Ranta), No. 12-2017 (July 1, 2013) that debtors who file for Chapter 13 bankruptcy are not required to list their Social Security income as part of their projected disposable income for purposes of the Chapter 13 means test.

 

In general, the Chapter 13 means test requires that debtors who wish to file Chapter 13 bankruptcy must make payments for 5 years – 60 months – unless their average gross income is less than the median income for similar households in the state. In the event that their average gross income is less than the median household income, they may make payments on a plan for only 3 years – 36 months.

 

For debtors, a shorter payment plan under Chapter 13 is better than a longer one. In fact, Chapter 13 debtors who fall below the median household income figure stand to save thousands of dollars and, literally, years of frustration, anxiety and stress. Thus, one of the critical questions in a Chapter 13 filing is whether a debtor’s projected disposable income exceeds the median household income for his or her state. This question, in turn, is dependent upon simple arithmetic: namely, adding up a debtor’s projected income.

 

Enter the Ranta decision. By excluding Social Security income as part of the projected disposable income calculus, the Fourth Circuit made it easier for Chapter 13 debtors to qualify under the Chapter 13 means test and, consequently, enter a 36 month plan rather than a 60 month one.

 

Want to find out more about Chapter 13 bankruptcy and the case law that may make easier – or more difficult – for you to successfully restructure your personal finances. The dedicated and experienced attorneys at the Dallas law firm of Fears Nachawati may be able to help you. For your free consultation, contact us today.

Understand the Texas Exemptions

Texans are fortunate. They live in a state where taxes are low and opportunities are plentiful. What’s more, our laws are forgiving for people who take chances, make mistakes or fall down on their luck. When facing bankruptcy, Texans find that although time may not be on their side, the law related to exempt assets in bankruptcy is.

 

Texas law shields certain types of property from the reach of your unsecured creditors if you decide to declare bankruptcy. As you confront your financial difficulties, it may be important to remember what assets are exempt – and what assets are not.

 

The Texas homestead exemption is one of the most generous in the country. Regardless of its value, a residence located on no more than 10 acres in the city or 100 acres in the country is exempt from the reach of creditors. For that matter, so are the proceeds of the sale of a residence if you file for bankruptcy within six months.

 

The Texas motor vehicle exemption is generous, too. One vehicle per licensed household member, regardless of its value, is exempt under Texas law. In other words, whether it’s a Mercury or a Mercedes, each driver may keep his car.

 

Third, Texas exemption law protects certain pension, retirement and insurance accounts. For older debtors, these exemptions may be particularly important, as your net worth may be high, but your impending health-related expenses may be even higher. If your wealth has been placed in the right asset classes, you may be able to hold on to your retirement nest egg.

 

Finally, Texas exemption law shields a number of items of personal property, $30,000 for an individual or $60,000 per couple, including firearms, family heirlooms, jewelry, pets and clothing. As you think about how to remember your past, continue in the present and rebuild in the future, these items can be of particular sentimental as well as financial value.

 

Want to know more about Texas exemption law and how it may impact your bankruptcy? The dedicated attorneys at Fears Nachawati are prepared to help you get started with your free consultation. Let us inform your decisions and put your mind at ease.

Your Creditors are Coming!

In his famous midnight ride, Paul Revere made phase a simple phrase, “The British are coming!” The Boston silversmith didn’t say much on his ride into the history books, but he said what mattered: the nature of the threat and the way the threat would appear – not by land, but by sea.

 

One of the most important reasons why you need a dedicated bankruptcy attorney is to issue the warning you need when you face financial difficulty: the nature of the threat your creditors pose and the way that threat may appear. So, just how might creditors come if you default on your payments?

 

You probably won’t be surprised to learn that you lenders will come after assets you purchased on credit. Your car, your home and consumer products like a television or furniture may all be subject to repossession or foreclosure.

 

What may surprise you is that your creditors may also come after your intangible assets, such as bank accounts or earned wages. These repossession efforts can be highly disruptive and embarrassing and may result in your family, friends, co-workers and supervisors knowing that you’re experiencing money problems.

 

The bottom line is that if you’re facing financial distress and falling behind in your payments, in a matter of days or weeks you could lose your car, your income and your house. You can prevent the harshest effects of this process, but you need to act promptly and deliberately.

 

Calling the experienced attorneys at Fears Nachawati may be the right first step for you and your family. With years of experience, we know how to advise you on your legal rights with respect to your creditors. Contact us today for your free consultation.

U.S. Trustee's Office: John Wayne of the Bankruptcy Court

For decades, the actor John Wayne played the part of the sheriff in Western movies. Citizens of frontier towns were able to live their quiet lives, but if they stepped over the line and into criminal conduct, they risked reprimand by the tall, forceful and loud-voiced sheriff.

 

In the context of federal bankruptcy law and bankruptcy courts, the United States Trustee’s Office plays a part similar to that of John Wayne’s sheriff. More specifically stated, the mission of the U.S. Trustee Program is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders – debtors, creditors, and the public.

 

Attorneys for the U.S. Trustee’s Office have standing in bankruptcy cases to fight for the fair process upon which all of the related parties rely. UST attorneys may take action to prevent fraud and abuse, refer matters for criminal investigation, ensure that fees are reasonable, review disclosure statements, and advocate for changes to procedural and substantive bankruptcy law.

 

Want to know more about the United States Trustee Program and the role they may play in your bankruptcy? The attorneys at the law firm of Fears Nachawati are prepared to answer this and many more important questions. Talk to our professionals today so that you can begin the process of moving toward financial freedom.

Rising Medical Bills Push Up Bankruptcy Filings

An estimated 1.7 million Americans will file for personal bankruptcy this year as a result of their medical expenses. For most observers, this doesn’t come as a surprise. Factors such as rising health care costs, a soft economy, and reduced health insurance coverage are converging to cause serious financial problems for a sobering number of Americans.

 

What’s more, for every American who declare bankruptcy as a result of unsupportable medical costs, more than 25 more will not declare bankruptcy despite owing more than they can easily pay. While some of these chose not to declare for valid reasons, many others fail to declare bankruptcy because of a lack of information or fear.

 

You don’t have to feel ashamed about filing for bankruptcy as a result of rising medical costs. In many cases, debtors who filed for bankruptcy do so because of a sudden, sharp increase in costs. An extended stay in the hospital, new and costly prescription drugs, or an expensive surgery hit their wallet at a time they least expect. As a result, filing for Chapter 7 or Chapter 13 is really their only option.

 

Want to know more about your options in bankruptcy? The dedicated and experienced professionals at Fears Nachawati are prepared to give you the advice you need to make an informed, fear-free choice. Contact our attorneys today for your free consultation.

Relief, Restructuring and Liquidation

If you’re facing financial difficulties, you may feel like you’re facing challenges without meaningful tools for dealing with them. It’s an understandable feeling and one that virtually every struggling debtor experiences. However, more often than not, that feeling is not an accurate reflection of reality.

 

Debtors may have as many as three meaningful options when dealing with financial distress. First, you may be able to work with your creditors to secure debt relief. In a large number of instances, a private creditor may cut you a break, forgiving some or all of your debt. Your creditor may also propose paying more now – a lump sum – and writing off the remainder. Before you get too frustrated with your financial predicament, it may be wise to explore your debt relief options.

 

Of course, in many instances, your creditor doesn’t want new promises, new money or new agreements. They may just want cold, hard cash. If that’s the situation you face, you may be backed into a corner, forced to consider meeting your obligations in full or filing for either restructuring bankruptcy or liquidation.

 

For debtors who meet the means test, Chapter 13 restructuring may let you keep more of your assets, extend your debt and find a soft place to land. For debtors who do not meet the means test, Chapter 7 liquidation may be the only arrow in your quiver. When that’s the case, it’s important to take every precaution to ensure that you liquidate your debts correctly – the first time.

 

Want to know more about your options – relief, restructuring or liquidation – and what’s the right course of action for you and your family? The dedicated and experienced attorneys at the law firm of Fears Nachawati are prepared to help you. Speak to us today for your free consultation. We’re committed to helping people just like you.

Is Your Retirement Plan Protected in Bankruptcy?

A 401(k), a retirement plan held by millions of Americans, may be one of your most important financial assets. In addition to its value, it represents something powerful for you and your family: the ability to retire. As many debtors consider filing for personal bankruptcy, they often ask: will I be able to keep my 401(k) assets?

 

The short answer is, “Yes – most of the time.” In general, the assets contained in a 401(k) plan are shielded from creditors during Chapter 7 or Chapter 13 bankruptcy. Specifically, Section 522 of the Bankruptcy Code provides an unlimited exemption for retirement assets exempt from taxation such as ERISA qualified and solo 401(k) plans.

 

There is a catch, however. If you withdraw assets from your 401(k) account, you may be required to recognize those dollars as income – and as non-exempt property available to your creditors. Even if you later attempt to return this income to your 401(k) account, it may be too late and the damage to your bankruptcy-protected retirement assets may have already been done.

 

Want to know more about the relationship of your 401(k) account and your pending Chapter 7 or Chapter 13 bankruptcy? The dedicated and experienced attorneys at the Dallas law firm of Fears Nachawati are prepared to answer these and other important questions. To get started with your free consultation, talk to our professionals today.

Should You Consider a Short Sale?

If the value of your mortgage exceeds the value of your house, your home is “underwater.” It’s not an enjoyable position to be in and, what’s more, it probably means that you’re experiencing financial difficulties in other parts of our life, too. Perhaps you’ve even considered bankruptcy.

 

Personal bankruptcy may be a solution to the problems you face. And, if that’s the right course of action for you, the dedicated attorneys and professionals at the Dallas law firm of Fears Nachawati can help you navigate the challenges and opportunities associated with declaring Chapter 7 or Chapter 13 bankruptcy.

 

It’s important to note, however, that bankruptcy may be a more extreme remedy than the one you may actually need. Selling your home for the value of the mortgage (but less than the full value of the property) is known as a “short sale.” For many debtors, a short sale may have the advantage of knocking out your largest financial obligation, freeing up your monthly income and settling with your primary creditor. Additionally, a short sale may leave you with a better credit score than what you might have post-bankruptcy.

 

Short sales aren’t risk free. Depending on your type of mortgage, you may have lingering debt following a short sale. And if you have large amounts of unsecured financial obligations – such as credit card bills – then a short sale may not do enough good to justify the personal and financial costs.

 

Want to know whether bankruptcy or a short sale is your best bet? Our attorneys can help you answer this and many other important legal and financial questions. For your free consultation, talk to a Fears Nachawati representative today. We’re dedicated to helping clients just like you.

What Debts Should You Reaffirm?

Let’s say you’ve decided to declare Chapter 7 bankruptcy. As a general rule, you’ve decided to shed your debts and start with a clean slate. Of course, you’ve also decided to sacrifice many of your assets in order to pay your creditors as much as possible.

 

As with all rules, there are exceptions. And one of the biggest exceptions to the general rule of shedding your debts in Chapter 7 bankruptcy is whether to reaffirm certain, particularly valuable debts. Reaffirming your car debt, for instance, may ensure that you keep your car – a particularly valuable asset for your post-bankruptcy financial future.

 

Reaffirming your car loan isn’t just about keeping your car. It’s about ensuring that you have any car after your bankruptcy. Although a Chapter 7 bankruptcy can serve many valuable strategic ends, it comes with costs. Most notably, you may have to go months – and even years – without meaningful access to credit. Reaffirming certain debts, such as your car loan, may let you hold on to assets that you might not otherwise have.

 

Do you have questions about the strategic nuances of your personal bankruptcy? Hope is not a plan; if you’re in need of a meaningful plan for personal financial restructuring, the attorneys at the Dallas law firm of Fears Nachawati can answer all of your pressing, important questions. Contact us today for your free consultation. We’re ready to help.

Should You Agree to a Debt Settlement?

Before you agree to a debt settlement, you may want to consider speaking to the dedicated, experienced bankruptcy professionals at Fears Nachawati. For some people who are struggling to make their monthly payments, a debt settlement may be just what they need. For others, however, a Chapter 7 or Chapter 13 may be a faster, cleaner, simpler and more final approach to escaping their indebtedness.

 

Typically, a debt settlement occurs between a creditor and a debtor. By modifying the debt structure in the way a creditor may want – such as extending the payment period, posting additional collateral or agreeing to modified terms and conditions – then a debtor often receives in exchange benefits which they want, such as lower monthly payments. In some cases, such as when the debtor is just missing payments by a few dollars or a few days, a debt settlement may make sense.

 

In other situations, however, such as when the debtor is regularly missing payments or paying considerably less than what is owed each month, a debt settlement may simply prolong an inevitable bankruptcy and, in the process, do more harm than good. Unlike a private settlement, a bankruptcy occurs under the watchful eye of a third party – namely, the federal government – which generally makes sure that consumer debtors play on a level playing field with sophisticated creditors.

 

So, what’s the right move right now: a debt settlement or a personal bankruptcy? The first step is to talk to the experienced and dedicated bankruptcy professionals at Fears Nachawati. Our team of attorneys and advisors can outline your options and provide you with the roadmap you need to move forward successfully. Contact us today for your free consultation.

Asset Sale May Be Helpful in Chapter 13 Case

If your liabilities exceed your assets, filing personal bankruptcy may be the right strategic move for your personal balance sheet. And if your monthly debt payments exceed your available monthly income, bankruptcy may be the only realistic option for protecting your family’s financial and legal interests.

 

If Chapter 13 bankruptcy is the right direction for you – or if it’s your only choice – it’s important to recognize that the law may require you to sell some of your assets. In this circumstance, it may be important for your legal counsel to help you maximize the value of the assets you put on the action block. Even on a relative basis, the proceeds from these sales may reduce the amount that you’re required to pay your Chapter 13 plan.

 

When thinking about when to file for personal bankruptcy, consider your timing. Some assets, such as real estate, can experience significant fluctuations in value in the span of just a few months or years. By delaying – or expediting – a sale of assets in bankruptcy, you may be able to increase the value of your estate and, as a result, reduce a portion of the obligations you’ll carry into your plan.

 

Want to find out more about how a timely, well-considered asset sale may improve your ability to manage your future during bankruptcy? The attorneys at the law firm of Fears Nachawati may be able to help answer your questions. Talk to us today for your free consultation.

Teaser Rates: A Roll of the Dice

An introductory rate, commonly known as a teaser rate, is an interest rate charged to a debtor during the initial stage of a loan. Generally, this interest rate exists for a period of time, such as 12 months, before the rate automatically reverts to a higher, permanent rate.

 

Teaser rates represent a roll of the dice for many debtors. Some debtors take advantage of an introductory rate by not only borrowing during the introductory period, but repaying the loan as well. For these savvy consumers, they are like gamblers who beat the house. Unfortunately, most debtors don’t have the discipline or the opportunity to repay the loan in full prior to the end of the introductory period. As a result, they face the difficult circumstance of a significant rate hike – often when they’re least prepared for it.

 

If you’re in bankruptcy because of credit card debt and the teaser rate trap, you may find an ironic and dangerous opportunity when you leave the protection of bankruptcy: the only credit you may be able to find in the first few months or years after bankruptcy may be teaser rate-driven, high interest credit cards. Just like a roll of the dice, these financial instruments aren’t inherently bad or good – they’re just tools at your disposal. What’s most important is that you understand how to use them.

 

Want to find out the answers to your most pressing questions about bankruptcy? The attorneys and dedicated professionals at Fears Nachawati are prepared to help you. Contact us today for your free consultation.

Can a Creditor Object to Your Chapter 7 Bankruptcy Filing?

It may come as a surprise, but you don’t have an absolute right to a Chapter 7 bankruptcy discharge. A creditor, your trustee, or the United States trustee each has the right to file an objection to a consumer debtor’s Chapter 7 discharge. In fact, all they have to do to begin an adversary proceeding is file a complaint outlining the basis of their objection to your bankruptcy.

 

Of course, objections can come as the result of outright, intentional, unmitigated fraud, however, many small errors can be just as deadly to your petition. For instance, failing to include a tax document among your disclosures, failure to take a credit counseling course required by federal law, or failing to account for a lost asset can all scuttle your bankruptcy. Some mistakes may be innocent, but the consequences will be severe.

 

Successfully navigating all of the challenges associated with your personal bankruptcy can be a demanding feat. Fortunately for you, the attorneys at the Dallas law firm of Fears Nachawati know how to handle to particular difficulties associated with your bankruptcy. Whether you’re considering Chapter 7 or Chapter 13, our team knows how to advise you, what questions to ask, and what steps to take.

 

As the nit-picky potential objections to a Chapter 7 discharge suggest, the devil is in the details when it comes to bankruptcy. When a debtor can receive a second discharge, whether your discharge may be revoked post-petition, and what options exist relating to repayment of a discharged debt are all just a few of the issues our firm can address.

 

Your free consultation is just a phone call or email away. If you’ve got questions about bankruptcy and how to prepare for your financial future, talk to our professionals today.

 

Bankruptcy: Should You Do It Yourself?

If you’re like many Americans, you probably like to do things for yourself. If your home requires a repair, you head to Home Depot or Lowe’s. If you get a tickle in your throat, your first stop is to Walgreens or CVS, not the doctor. There are good reasons to maintain this independence: often you can get the solution you want at a price you can afford.

 

With this in mind, you may be tempted to try to craft your own legal solution to your financial problems. Every year, thousands of Texans file a pro se bankruptcy petition. While their success rate is markedly lower than represented debtors, some figure out how to navigate the complex corridors of U.S. bankruptcy. Should you try this, too?

 

Debtors who hope for a DIY bankruptcy often find that the process is slower, more confusing, time-consuming, and expensive than they first imagine. Worse, in many cases, debtors leave money on the table – and liabilities on their balance sheet – because they know only some of what they need to know. Finally, unlike a leaking faucet or a head cold, failing to get bankruptcy right the first time can have permanent consequences.

 

Need to know more about how a highly qualified and well-trained attorney from the Dallas law firm of Fears Nachawati may be able to help you? You can trust our years of experience to create the custom, quick solution you need. Learn how we may be able to advise you by contacting our team today for your free consultation.

Pre-Bankruptcy Planning & Post-Bankruptcy Success

To enjoy the fruits of personal bankruptcy, you should consider carefully understanding your present financial condition as well as your hopes for life after bankruptcy. Although your bankruptcy attorney can help you effectuate a legal solution to your financial problems, only a well-considered plan will keep you from facing insolvency in the future.

 

Debtors should be aware that there’s really only one shot in the bankruptcy gun; you don’t want to miss. The Bankruptcy Code provides that consumer debtors may receive a discharge of their personal debts only once in a seven-year period. In this way, creditors are protected from debtors receiving multiple, frequent discharges. Debtors, therefore, must take care to make sure that all appropriate debts are discharged – and that they are prepared for living for an extended period with the benefit of bankruptcy.

 

How should you prepare for such a length period without the availability of bankruptcy? Talking to a trained, experienced, and devoted bankruptcy attorney is a good initial step. As you prepare for these next steps, it’s important to understand what property is exempt from your creditors’ reach, what transfers the law prohibits you from making, and what it takes to live within your means for a multi-year stretch.

 

Post-bankruptcy success is available to you, but for many debtors, it takes sound pre-bankruptcy planning. To know decisions you should make, when you should make them, and what legal and financial issues you should consider, talk to the bankruptcy professionals at Fears Nachawati today. With years of experience and dedicated expertise, we know how to answer your questions, protect your legal interests, and increase the likelihood of your success. For your free consultation, talk to us today.

Middle Class Bankruptcy

Who declares bankruptcy? Of the roughly 1,000,000 Americans who file a bankruptcy petition every year, the large majority of debtors are from solidly middle class backgrounds. In fact, some may not even be financially insolvent. Of course, at the moment of bankruptcy, their personal balance sheet and bank statement may look bleak, but debtors rarely come from an impoverished background – and they generally return to some level of prosperity after their bankruptcy.

 

Why do debtors declare bankruptcy? Most often, Americans file for Chapter 7 or Chapter 13 protection because their high-interest debt payments seriously threaten to overwhelm their monthly income. In many circumstances, major life events – family deaths, job losses, medical events, or business failures – wipe out an individual’s personal equity, require a rapid increase in debt, and precipitate a balance sheet imbalance that ultimately results in insolvency and bankruptcy.

 

What’s better: Chapter 7 or Chapter 13? A straight liquidation, codified in Chapter 7 of the Bankruptcy Code, offers distinct advantages over a payment plan, provided for in Chapter 13 of the Code, in some cases. However, for debtors who are prohibited from filing Chapter 7 or who are looking to hold onto particular assets, Chapter 13 may be the preferred approach. Ultimately, a liquidation or a restructuring of debt is a choice that depends on the needs of the debtor. Advice of counsel is important to make this decision.

 

Ready to talk about whether personal bankruptcy is right for you and your family? The professionals at Fears Nachawati have the experience and expertise to advise you well. You can trust that our years of practice will help you move from insolvency to a new financial future. For your free consultation, talk to us today.

Can Creditors Get Relief from the Automatic Stay?

For many debtors, the automatic stay is the brass ring of bankruptcy. This crucial provision of the Bankruptcy Code stops, or "stays," creditors attempts to recapture a debtor's assets through state remedies. In general, so long as the bankruptcy is pending, a debtor's creditors will be prevented from collecting on outstanding debts.

 

Do creditors have any protection against the automatic stay? They don't have many, but those that they have are important. Exceptions to the automatic stay may be cracks in the debtor's wall, letting in precisely the claims the debtor sought to keep out.

 

If the creditor can prove that debtor lacks the resources to protect the value of the collateral – known under the Bankruptcy Code as posting "adequate protection" – then the creditor may successfully convince the bankruptcy court to "lift" the automatic stay. Likewise, if the creditor convinces the court that the debtor hasn't filed the bankruptcy in good faith and is merely advancing a scheme to delay, hinder, or defraud his creditors, then the court may lift the stay, too.

 

Your attorney should be able to help you understand the protections of the automatic stay and the reasons your creditors may seek relief from it. If you're considering representing yourself, you may be wise to consider hiring skilled counsel. The attorneys at Fears Nachawati understand the value of the automatic stay and many of the other protections under the Bankruptcy Code that you may not fully appreciate. Want to know how we can help? Contact us today for your free consultation. We're ready to advise you.