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

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

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

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

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

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

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.

A credit card is a safe and convenient way to pay for life’s necessities. In some cases a credit card is required to purchase goods or services. Debit cards are often a poor substitute for a credit card as bank holds can tie up your account for days.

If you want to keep a credit card during your bankruptcy, there are a few things to know. First, the Bankruptcy Code requires that you list all of your creditors and debts owed on the date of the bankruptcy filing. Consequently, if a credit card has a zero balance on the date that you file bankruptcy, it does not need to be listed and the credit card company does not receive notice.

Second, the use of credit during a chapter 13 bankruptcy is prohibited without prior authorization from the trustee and bankruptcy court. Usually credit approval is contingent upon a written agreement or statement from the credit card company. Chapter 7 debtors do not have this restriction.

Third, a payment on a credit card within 90 days before your bankruptcy filing may be considered a preference payment. The bankruptcy trustee may seek a court order compelling the credit card company to turn over any pre-filing payments.

Fourth, credit card companies conduct regular checks of their cardholders’ credit and your bankruptcy filing may result in the card issuer closing your account, reducing your credit line, or increasing your interest rate. These actions may also occur if you choose to reaffirm your debt with the credit card company. After reaffirming the debt the card may be cancelled and you are stuck with a non-discharged credit card balance.

Fifth, intentional failure to list a credit card with a balance can result in dismissal of your bankruptcy case. The bankruptcy court expects you to be entirely truthful concerning who you owe, regardless of your intention to pay the debt.

Sixth, consider obtaining credit after your bankruptcy discharge. Many debtors are offered unsecured credit cards shortly after their bankruptcy discharge. Many creditors consider a recently discharged debtor a good credit risk because the debtor is unable to receive another bankruptcy discharge for several years, and likely has a good debt-to-income ratio. Many post-discharge credit card offers carry high interest rates and fees, so choose wisely.

Secured credit cards are another credit option after bankruptcy. A secured credit card requires a security deposit placed with the credit card company who then issues a credit line secured by the deposit. Many banks and credit unions offer their customers secured credit cards at reasonable interest rates.

If you are interested in keeping a credit card during bankruptcy, consult with your bankruptcy attorney. Your attorney can discuss your options and help you decide on the best way to maintain a credit card account during and after your bankruptcy.
 

Quite a bit of mystery surrounds the bankruptcy trustee.  Generally, the person identified as the bankruptcy trustee in a Chapter 7 case is a “panel trustee,” also called an “interim trustee.”  The Panel Trustee is appointed by the United States Trustee as a local agent to review the debtor’s bankruptcy petition and schedules, and to determine if the debtor has any non-exempt assets available for distribution to creditors.  The Panel Trustee is not a government employee, although he or she is supervised by the Office of the U.S. Trustee (a division of the U.S. Department of Justice).  While the Panel Trustee is required to be independent and disinterested in the debtor’s case, the Panel Trustee works primarily for the benefit of the debtor's unsecured creditors.

The Panel Trustee is almost always the individual that presides over the debtor’s Section 341 Meeting of Creditors.  The Panel Trustee must investigate the debtor’s affairs, examine the debtor under oath, and submit reports to the bankruptcy court and Office of the U.S. Trustee.  At the 341 Meeting the Panel Trustee is required to ask the debtor specific questions outlined in the U.S. Bankruptcy Code.  These questions include:

Did you read the schedules before signing?

Did you list all of your assets?

Did you list all of your debts?

Are the schedules accurate?

Do you want to make any corrections to the schedules?

Do you have a domestic support obligation?

Panel Trustees are paid a flat fee of $60 per case.  In addition, Panel Trustees receive an incentive commission on each dollar they collect from the debtor.  The commission rate is: 25% on the first $5,000 distributed; 10% on the next $45,000 distributed, 5% on the next $955,000, and 3% for every dollar distributed in excess of $1,000,000.  The National Association of Bankruptcy Trustees reports that approximately 90% of Chapter 7 cases are considered “no asset cases” in which there are no assets available for liquidation, either because assets are exempt (protected) by debtors or liened by secured creditors. 

Panel Trustees are usually attorneys or accountants with extensive bankruptcy law and auditing experience.  The bankruptcy trustee is forbidden from offering legal advice to debtors in bankruptcy.  Unfortunately, unrepresented debtors often do not receive the full protection of the bankruptcy laws because they lack the counsel of an experienced bankruptcy attorney.  These unrepresented individuals sometimes find themselves involved in “asset cases” and under the trustee’s microscope.  However, with the proper preparation, and with the experienced counsel of a skilled bankruptcy attorney, your Chapter 7 Bankruptcy can proceed very smoothly – even under the scrutiny of the bankruptcy trustee.

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

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

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

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

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

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

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

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

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

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

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

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

You may have heard the hype from firms claiming they can reduce all of your IRS tax debt for pennies on the dollar. The reality is that most taxes can't be eliminated, but some can. But it is not as easy as it sounds. One legal and reliable way is to file for a Chapter 7 bankruptcy. Once you apply for bankruptcy, you must then pass a series of steps to see if you can discharge IRS tax debts under Chapter 7. Basically you can discharge an IRS tax debt if you meet all of the following conditions:

·         The taxes are only income taxes.

·         You did not commit fraud.

·         You did not commit willful evasion.

·         You filed a tax return.

·         The debt must be at least three years old.

·         You pass the "240-day rule."

As you can see the discharge of an IRS debt is not as simple or easy as some may lead you to believe. It is advisable to speak with an attorney experienced in bankruptcy law and you can by contacting Fears | Nachawati toll free at 1.866.705.7584 for a free bankruptcy consultation.

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

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

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

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

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

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

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

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

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

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

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

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

1.  Continued spending using credit cards

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

3.  Paying for college without applying for aid

4.  Investing inertia - long-term investment management

5.  Obtaining cash from your home

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

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

1.       Your house

2.       Your Car(s)

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

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

5.       Your Personal Belongings

6.       Stocks, Bonds and Mutual Funds

7.       You’re Sanity!

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

One of the main reasons people are afraid to file for bankruptcy is the misleading claim by credit companies that filing for bankruptcy will ruin your credit. The reality is that the opposite is true for people who are in over their heads in debt. Filing for a Chapter 7 bankruptcy in Dallas, Texas, will erase most if not all of your debt and help give you a clean start in rebuilding your credit.

Additionally, when you have no excess credit card debt or other financial obligations there will be no more late payments on your credit report because your debt has been eliminated. And with the new credit card law, Credit CARD Act of 2009*, and careful management of your finances you should be able to rebuild your credit in a few years.

Although lenders will be able to see the bankruptcy on your credit report, they will primarily focus on the last 2-3 years of your credit history when extending credit.

For a free consultation on how Dallas bankruptcy law can help you get out of debt, contact Dallas bankruptcy law firm, Fears | Nachawati, toll free at 1-866-705-7584 or by e-mail at info@fnlawfirm.com.

*Credit CARD Act of 2009 is a federal law passed by the United States Congress and signed by President Barack Obama on May 22, 2009. Briefly, it is comprehensive credit card reform legislation that aims "...to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes."

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

The full article can be found here. 

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

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

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

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

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

If a creditor has seized your bank account, an option to quickly “unfreeze” your account is to file for bankruptcy. In fact, it may be your only option. It is very difficult to function without a bank account. As you know, you use your bank account to pay for groceries, household items and other basic necessities. A frozen bank account can be disastrous for most people.

When you file for bankruptcy in Dallas no creditor can place a lien on your bank account. If you already have a lien on your bank account due to credit card bills or other debts, it will be removed immediately. In some cases, some of the monies removed from your bank account may be returned. The key is to act quickly to make sure that no other creditors place a “freeze” on your account and to try to recover any money a creditor may have received through your bank account. There are special bankruptcy rules that apply in those situations. A Dallas bankruptcy attorney can give you options based on your specific situation.

For a free bankruptcy consultation contact Dallas bankruptcy law firm, Fears | Nachawati Law Firm via phone at  (866) 705-7584 or e-mail at info@fnlawfirm.com.

If a creditor has seized your bank account, an option to quickly “unfreeze” your account is to file for bankruptcy. In fact, it may be your only option. It is very difficult to function without a bank account. As you know, you use your bank account to pay for groceries, household items and other basic necessities. A frozen bank account can be disastrous for most people.

When you file for bankruptcy in Dallas no creditor can place a lien on your bank account. If you already have a lien on your bank account due to credit card bills or other debts, it will be removed immediately. In some cases, some of the monies removed from your bank account may be returned. The key is to act quickly to make sure that no other creditors place a “freeze” on your account and to try to recover any money a creditor may have received through your bank account. There are special bankruptcy rules that apply in those situations. A Dallas bankruptcy attorney can give you options based on your specific situation.

For a free bankruptcy consultation contact Dallas bankruptcy law firm, Fears | Nachawati Law Firm via phone at  (866) 705-7584 or e-mail at info@fnlawfirm.com.