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

The Chapter 13 bankruptcy trustee encourages debtors to make monthly plan payments using a wage deduction order. At the debtor’s request, the bankruptcy court will send an order to the employer to withhold money from the employee’s paycheck and send it to the trustee. Cases using wage deduction have fewer instances of default.

Many debtors don’t use wage deduction because they want to avoid informing their employer about the bankruptcy case. But does this make sense?

Bad credit can get you fired. Failure to manage your personal finances could lead to your termination, especially if you work for a bank and other financial institution, a retail store, or a business where you handle cash on a routine basis. Collection calls at work can get you fired. Mistakes and time off work can get you fired.

On the other hand, the federal bankruptcy laws prohibit government and private employers from firing you on the basis of your bankruptcy filing. By informing your employer that you have filed bankruptcy, you have put the employer on notice that you are dealing with your financial problems in a responsible and legal manner. In order to terminate you during your bankruptcy case, your employer must find a reason unrelated to your bankruptcy and personal finances. Consequently, most employers do not want to risk violating the federal law.

Finally, which is worse: to inform your employer of your bankruptcy through a wage deduction order, or for your employer to discover your financial problems through some other channel? Most employers (and people) respect honestly and forthrightness. Some employers conduct periodic credit checks on their employees, so your bankruptcy will be eventually discovered. This is especially the case with government work involving national security or the Federal Deposit Insurance Corporation.

Of course, every situation is different and you should discuss your situation with an experienced bankruptcy attorney. Your attorney can help you decide if a wage deduction order is right for you.
 

Creditor harassment is a common reason people visit bankruptcy attorneys. Collection calls can be a source of frustration and embarrassment. So once you have decided to file bankruptcy, should you tell your creditors?

The answer to this question depends on a number of things. First, have you hired an attorney? Once you retain bankruptcy counsel, you can inform your creditors, “Don’t talk to me; call my attorney!” The Fair Debt Collections Practices Act (FDCPA) prohibits third party collectors (collection agencies, attorneys, etc.) from speaking with you once they know you are represented by an attorney concerning the debt. Hiring a bankruptcy attorney can provide immediate relief and peace of mind to many who have been harassed by creditors. Ignoring the FDCPA and continuing to harass you can cause serious trouble for the collector.

The second issue is, “Can telling the creditor that you are filing harm you?” Hiring an attorney and intending to file bankruptcy are not the same as actually filing your bankruptcy case. Until you file you are not under federal bankruptcy protection, and a secured creditor may try to repossess property. For instance, if you are several payments behind on your car loan, the lender may decide to quickly repossess your vehicle to avoid complication and delay by the bankruptcy. You may get your vehicle back after you file a Chapter 13 case, but it may take a few days or longer. You will not get your vehicle returned if you file Chapter 7. Once you file your bankruptcy case, the creditor may not repossess property without the bankruptcy court’s permission.

Finally, creditors hear “I’m filing bankruptcy” every day. Are you able to file your case quickly, or will it take awhile? An original creditor (i.e. the one who loaned you money or extended credit) is not subject to the FDCPA. If you do not follow through quickly with your threat to file bankruptcy, the creditor may soon renew and increase its efforts.

Your bankruptcy attorney is in the best position to instruct you whether to tell your creditors that you intend to file bankruptcy. For many, the answer is “Yes,” but there are special circumstances when it is best to avoid disclosing a pending bankruptcy action. Consult with your attorney and get the advice you need.
 

Stopping a Tax Offset for a Defaulted Federal Student Loan

Federal student loans are guaranteed by the US government and administered by the Department of Education. When a borrower defaults on the loan, the Department of Education may refer the loan to the Department of the Treasury for collection. The Treasury issues your tax refund check, which can be offset to pay your defaulted student loans. The Treasury will offset your entire refund, even if it includes money owed to your non-obligated spouse or an earned income tax credit.

So what can you do to stop this nightmare?

First, the Department of Education is required to send you notice of the offset. You are entitled to a hearing and an opportunity to present evidence when challenging the debt. If you make a timely request for a hearing, the collection process must stop. So it is in your best interest to review the loan documentation and request a hearing if there are mistakes. During that time you should also contact the Department of Education, negotiate a repayment schedule, and request that all garnishments and seizures cease.

Second, you should check with the Internal Revenue Service and see whether your tax refund will be offset. The number to the IRS Offset Hotline is 800-304-3107.

Third, if you filed a joint income tax return, your spouse may be eligible to reclaim his or her portion of your joint refund. Your spouse must file an "injured spouse" claim form (IRS Form 8379) with the Internal Revenue Service. Questions regarding the amount your spouse will receive can be answered by the IRS by calling 800-829-1040.

Fourth, you may be able to stop the collection process if you can show evidence of financial hardship. You must contact the Department of Education and submit documentation to support your claim. The Department of Education will consider your claim and may agree to modify the withholding action.

Finally, bankruptcy may stop an offset of your income tax refund. The bankruptcy laws on this matter are complex and require the attention of an experienced attorney. In general, the bankruptcy code allows a creditor to offset money owed to the debtor against a pre-bankruptcy debt. The offset must involve the same parties to the credit and the debt. If the creditor wants to perform an offset during the bankruptcy (for instance, during a Chapter 13 bankruptcy), it must first ask the bankruptcy court for relief from the automatic stay.

If you have defaulted on your student loans, you may be able to stop an IRS offset of your income tax refund. It is important to discuss the specifics of your situation with an experienced bankruptcy attorney. Your attorney can recommend the best course of action to protect your assets and income.
 

Many people start financial planning when the decision is made to file bankruptcy. Financial planning is good, but doing it yourself can be disastrous. In particular, there are five activities that can cause serious problems in your bankruptcy case, so today’s article is a list of the top five activities to avoid before you file bankruptcy.

5. Don’t use credit cards. In bankruptcy, as in life, honesty is the best policy. Using credit when you have no intention on repaying is fraud and you can be charged with a crime! The bankruptcy code gives the credit card company legal advantages when credit is used just prior to filing bankruptcy. The result is often that you have to repay credit you use just before filing bankruptcy. Consult with your bankruptcy attorney before you use a credit card convenience check, transfer a credit card balance, take a cash advance, or go on a spending spree.

4. Don’t transfer property. Transfers just before bankruptcy must be identified and the bankruptcy trustee will take a special interest in your case. The bankruptcy trustee always assumes the worst and will look on any transfer with suspicion. Illegal transfers can be voided by the trustee and you may lose your right to protect the property. For instance, let’s say you sold your car worth $3,000 to your adult daughter for $1. Since this is not an arm’s length and fair transaction, the trustee can avoid the transfer, and force your daughter to turn over the car to the trustee. Since you did not own the car when you filed, you are not entitled to protect the vehicle with your legal exemptions. The trustee will now sell the car to pay your creditors and you lost a $3,000 asset. If you want to sell or transfer property, speak with your bankruptcy attorney. Your attorney can show you the right way to transfer the property without causing a legal mess.

3. Don't repay loans to friends or family. Money used to repay a loan to a friend or family member within a year of your bankruptcy filing can be avoided by the bankruptcy trustee. The trustee can sue your friend or family member for the money.

2. Don't pay more than $600 to one creditor. Like payments to friends or family members, payments that exceed $600 to any one creditor within 90 days of the bankruptcy filing can be avoided. Speak with your bankruptcy attorney before paying creditors.

1. Don't cash out retirement plans or 401k's. Retirement plans are often fully protected by bankruptcy laws, so do not touch these accounts until after you file bankruptcy. Once the money is moved it is more difficult to protect and you may lose your retirement funds.

The bankruptcy code contains many traps for the unwary. A bankruptcy professional can help you avoid these common traps. Don’t wait to speak with a bankruptcy attorney and discuss your financial situation. Get experienced advice on how to obtain the help you need.
 

The most common types of personal bankruptcy are Chapter 7 and Chapter 13 bankruptcy. A Chapter 7 bankruptcy is an “erase-your-debts-and-start-fresh” bankruptcy. The Chapter 7 case typically takes around four to five months and unsecured debts are discharged. On the other hand, Chapter 13 cases last three to five years and all disposable income is paid to unsecured creditors. So why would any reasonable person choose Chapter 13 over Chapter 7? There are several differences between Chapter 13 and Chapter 7 which offer special advantages under the right circumstances.

The most significant advantage, and perhaps the main reason many debtors choose Chapter 13, is the opportunity to save a home from foreclosure. Chapter 13 allows the debtor to cure overdue mortgage payments over the life of the repayment plan (three to five years). During a Chapter 13 bankruptcy, the debtor may also take advantage of any home loan modification program that he or she is otherwise qualified to receive. Finally, a home that has a second or third mortgage that is completely unsecured may qualify for lien stripping in Chapter 13. Once the junior mortgage is stripped off, the debt is paid at the same rate as other unsecured debts and the remaining balance is discharged at the end of the bankruptcy case.

Another advantage is the ability to “cram-down” a motor vehicle loan to the fair market value of the vehicle. The loan principal of the qualifying vehicle loan is reduced and the payment is stretched over the life of the repayment plan. High interest may also be crammed down to the trustee’s interest rate, which could mean a significant savings in monthly payments.

During a Chapter 13 bankruptcy case, any co-debtor or co-signor is protected from creditor collector and harassment. This provision protects a co-debtor from harm while the debt is repaid in bankruptcy.

Chapter 13 also acts like a court ordered consolidation loan. The bankruptcy court judge orders the creditors to accept payments during bankruptcy, whether they like it or not! The debtor has no direct contact with the creditors during the case. If the creditor has an issue with how its debt is treated in bankruptcy, the creditor must take it up with the judge.

Chapter 13 can be a powerful legal tool for some debtors, but it is not for everyone. The federal bankruptcy code contains many provisions that are specifically suited to help individuals recover during financial crisis. The protection is broad and the relief is very real. If you are struggling financially, speak with an experienced bankruptcy attorney and learn how the bankruptcy laws can help you.
 

Fewer personal bankruptcy cases were filed during 2011 according to a report by the National Bankruptcy Research Center. In 2011 about 1.3 million consumer bankruptcy cases were filed throughout the United States, or about one out of every 175 Americans. That is a decrease from 2010 when slightly less than 1.5 million cases were filed, or one out of 150 Americans, filed bankruptcy.

Chapter 13 filings fell 8 percent from 2010 totals, and Chapter 7 filings dropped 13 percent. 2011 marked the first time the number of personal bankruptcy cases had fallen since 2006. Nevada remains at the top spot for the nation’s highest per capita filing rate at 8.98 bankruptcy cases per 1,000 residents. That is a drop from Nevada’s 11.1 filing rate in 2010.

“The decline in total filings reflects the retrenchment in consumer spending associated with a down U.S. economy,” said American Bankruptcy Institute Executive Director Samuel J. Gerdano. “As consumers continue to deleverage their debt and access to credit remains tight, bankruptcy filings will continue to decrease.” The American Bankruptcy Institute is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency.

While national bankruptcy statistics may be interesting, your financial situation is not a statistic. Your case is unique and deserves a skilled attorney committed to guide you through the maze of the federal bankruptcy laws. You may need a Chapter 7 “straight bankruptcy” that can discharge unsecured debts and get you quickly back on the road to recovery. Or your situation may require a Chapter 13 repayment plan to save your family home and right your sinking financial ship.

If you are struggling with debts you cannot pay, speak with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can help you. Each year over a million people chose bankruptcy relief because it works! Bankruptcy can eliminate your debt burden and put you on the path to a fresh financial start.

There are many reasons that an individual would consider "walking away" from a home. Before abandoning your home, speak with a qualified bankruptcy attorney about the consequences. Your attorney can discuss alternatives for keeping your home such as loan modification, bankruptcy lien stripping, or Chapter 13 repayment. If surrendering your home is the best option, then a short sale, a deed in lieu of foreclosure, or even renting out your home may be better solutions than walking away. In most cases staying in your home as long as possible is the best choice. Be sure to consult with an attorney and examine all of your options before you make a decision.

If you decide to walk away from your home, be aware that you are still the legal owner. Consequently you should maintain insurance on the property until the property is transferred. Many things can happen to an empty house. Someone may be injured on the property, there may be fire or flooding, the roof may leak, or the pipes may freeze. If the lender takes out insurance on the property (“force-placed” insurance), you are not covered. Force placed insurance only covers damage to the property.

Filing bankruptcy does not mean that you no longer own the property. You may be liable for a claim or an accident that happens on the property after you file bankruptcy and before ownership is transferred. A claim that arises after you file bankruptcy is generally not dischargeable! Additionally, some condominium or homeowners association fees that occur after you file bankruptcy may not be dischargeable, and there is the possibility of tax consequences. Speak to an experienced attorney to determine whether you will be responsible for these fees and taxes.

Aside from insurance, there are other things you can do to protect yourself and the property. First, be sure that all windows and doors are locked. Second, ensure that all mail and newspaper service are forwarded or cancelled. Do not advertise that the house is vacant. Third, turn off lights and unplug appliances. Fourth, turn off air conditioning and turn down heat to a low level. Maintaining a modicum of heat is necessary to prevent walls and pipes from freezing. Fifth, remove any swing sets, trampolines, play gyms, or other items that might attract children into your yard. Finally, arrange for someone to inspect the home periodically and take care of any yard work. Failure to maintain the property may result in fines or citations from local authorities.

Document all of the activities surrounding the home including the date that you move out, and the condition of the house. Note any damage, and take digital pictures of the inside and outside of the house. Do not remove anything that is permanently attached to the property. Toilets, built-in appliances, and other fixtures are a permanent part of the property and removing these items may cause you legal headaches in the future.

Walking away from your home can lead to legal complications. Explore your options with your attorney before making a decision. Your attorney can help you reach the best decision for your family, and help manage any potential legal liability.

All bankruptcy debtors will tell their bankruptcy attorneys about cases in which they are defendants. Debtors are always anxious to stop a lawsuit and rid themselves of any dischargeable obligations.

The problem with lawsuits usually arises when the debtor is the plaintiff, or has a claim that has not yet been filed. For instance, suffering a personal injury caused by someone else and then filing bankruptcy to get rid of the medical bills.

Both a plaintiff’s lawsuit and a potential lawsuit are assets of the bankruptcy estate.

What happens to the plaintiff’s claim during bankruptcy can depend on a number of circumstances.

In some cases the bankruptcy attorney can exempt a portion or even all of the money received from winning or settling the lawsuit. In other cases the bankruptcy trustee may consider the lawsuit or potential lawsuit of little potential value to the bankruptcy estate (and your creditors), and may abandon the estate’s interest in the suit or claim.

The Bankruptcy Code requires the debtor to disclose all pending lawsuits and claims, whether as a plaintiff or a defendant. Failing to disclose a claim can cause serious headaches for both the bankruptcy attorney and the plaintiff attorney. Whether the failure to list the claim was intentional or an unintentional error, omitting a pending or potential lawsuit is the same as representing to the bankruptcy court that the debtor does not own the asset or have the right to sue. One appellate court said, that “a debtor in bankruptcy who denies owning an asset, including a chose in action or other legal claim, cannot realize on that concealed asset after the bankruptcy ends.” The legal term for this situation is “judicial estoppel,” and it can terminate your right to sue.

If you have a pending or potential lawsuit, discuss your situation with your bankruptcy attorney. Your attorney can advise you on your legal options for discharging your debts and keeping your lawsuit proceeds. Pending lawsuits is actually common, and an experienced bankruptcy attorney can guide you through the legal maze without terminating your rights.

Clients are often pleased to learn about one of the bankruptcy law's most powerful protections: the automatic stay. When a bankruptcy case is filed, the debtor receives immediate protection from creditor collection actions. This relief is known as the “automatic stay” because it immediately stops lawsuits, telephone harassment, and other attempts to collect on a debt. The automatic stay continues throughout the bankruptcy case until either the stay is modified by the court or the case ends.

But what about co-signors?

Most co-signors are considered "jointly and severally liable" for the debt. That means that each party is liable up to the full amount of the debt. If you file bankruptcy, your co-signor is typically on the hook for 100% of the outstanding debt. Contrary to a popular misunderstanding, the bankruptcy discharge does not "erase" a financial obligation. The discharge is a legal injunction that prohibits your creditors from enforcing your debts against you individually. The debt still exists, and can be collected from others who are not protected by the bankruptcy laws.

Filing a Chapter 7 bankruptcy case will not stop a creditor from collecting against a co-signor or co-debtor. However, a Chapter 13 bankruptcy case contains a protection known as the “Co-Debtor Stay.” This protection is meant to protect a debtor by insulating him from indirect pressures from his creditors exerted through friends or relatives. The Co-Debtor Stay stops all collection actions against any individual who is obligated on a consumer debt owed by the debtor. This protection continues until the Chapter 13 case has concluded, or the Co-debtor Stay is modified or lifted by the bankruptcy court. Typically, the Co-Debtor Stay will last the duration of the debtor's Chapter 13 bankruptcy case, or three to five years.

There are limits to the Co-Debtor Stay. The Co-Debtor Stay only prohibits collection on personal debts, not business obligations. Additionally, if your co-signor actually received the benefit of the debt, and your Chapter 13 plan proposes not to pay the debt, the creditor can seek to lift the stay. This is often the case when the bankruptcy debtor co-signed a loan so that a friend or family member could purchase a car. Of course, if the creditor is receiving timely payments on the loan, there is usually no issue or impact to the co-signor.

If you need bankruptcy relief, but are worried that your co-signors will be harmed, discuss the issue with an experienced bankruptcy attorney. Your attorney can recommend several options to consider when dealing with co-signors.
 

 There are many myths circulating regarding bankruptcy. One of the most popular myths is that a bankruptcy debtor can pick and choose which debts are included in the bankruptcy discharge. This myth is simply the result of a misunderstanding of the discharge process.

When you file bankruptcy you are required to honestly disclose all personal financial information to the best of your ability. That means listing all of your income, expenses, assets, and debts in your bankruptcy schedules. Intentionally failing to list a debt is a very serious matter and the bankruptcy court could deny your discharge if you are less than honest.

In many cases a bankruptcy debtor has a good reason for wanting to continue paying on a debt. The most common reason is to retain property used as security for a loan (e.g. a car or house loan). In bankruptcy, secured property must be paid for or returned. Fortunately, the bankruptcy code allows the debtor to continue paying the secured creditor and keep the property.

In other cases a debtor may want to continue to pay an unsecured creditor. This is normally the case when the discharge of a debt in bankruptcy will cause financial harm to a co-debtor. For instance, you may owe money to a family member that you want to repay. The bankruptcy discharges the legal obligation to pay the debt, and enjoins the creditor from seeking collection. However, while the bankruptcy prevents your family member from asking for payment, it does not prevent you from making voluntarily payments after the bankruptcy.

The same voluntary payment principle applies to medical bills, credit cards, and any other financial obligation. Voluntary payments do not alter the bankruptcy court’s discharge injunction. A discharged creditor is forever prohibited from taking any action to collect on the discharged debt, including asking for payment, sending a bill or statement, or filing a lawsuit against you.

If you need a bankruptcy attorney in Texas, but also want to continue to pay certain debts, discuss your situation with an experienced Texas bankruptcy lawyer. Your attorney can explain your obligations under the federal bankruptcy code, and can help you decide which debts you should pay.

In every consumer bankruptcy case there are three categories of fees: (1) attorney fees; (2) bankruptcy filing fees; and (3) credit counseling fees. The attorney fees are negotiated between yourself and your attorney. Attorney fees are generally paid up-front in Chapter 7 cases. In Chapter 13 cases, your attorney may require a partial payment of the attorney fees before filing your case. Attorneys may elect to be paid the remaining amount in equal monthly installments through the Chapter 13 plan.

Bankruptcy filing fees are the same throughout the country. For a Chapter 7, the filing fee is $299. For a Chapter 13, the filing fee is $274. Typically the filing fee is paid at the time of filing, although there are exceptions to this rule. In some cases the filing fee may be paid in installments, and the filing fee may be waived altogether for extremely poor debtors. Bankruptcy filing fees are the same whether a debtor files a single or joint husband and wife bankruptcy.

The Bankruptcy Code requires each consumer debtor to receive credit counseling from a nonprofit budget and credit counseling agency approved by the United States Trustee within 180 days of filing a bankruptcy. This counseling fee is around $50.00 per household and is available in-person, by telephone, or over the internet.

The Bankruptcy Code also requires that the debtor complete an "instructional course concerning personal financial management." This class is also available in-person, by telephone, or over the internet for a fee around $35.00 per filer.

If you are in need of debt relief, but are afraid that you cannot afford the legal fees, schedule a free consultation with an experienced bankruptcy attorney and discuss your financial situation. The bankruptcy process is surprisingly affordable and there are strategies that your attorney can employ to make the process more affordable for your budget. 

 Some people wonder if hiring a bankruptcy attorney is worth the expense. Self help books and internet advice often portray the bankruptcy process as simply a matter of filling out paperwork. The truth is that bankruptcy is a mixture of state and federal statutes, case law, procedural rules, and court and creditor customs. An experienced attorney can help you navigate any legal obstacles, but there are other benefits to hiring experienced counsel to handle your case.

Once you hire an attorney, third party collectors are prohibited from contacting you directly. The Fair Debt Collections Practices Act applies to collection agencies and collection attorneys, and forbids contact with the debtor by mail, telephone, or any other means. The collector must communicate with your attorney, which gives you immediate peace of mind.

Your attorney will act as a financial advisor to help you forge a new financial future. Bankruptcy is a remedial process to cure poor financial health, and can eliminate or restructure your debt. Bankruptcy processes like reaffirmation, redemption, lien-stripping, and cram-down can be very beneficial to the debtor, but require experience. Choosing the right bankruptcy chapter, the proper exemptions, and applying the correct legal theories to your debts and property can mean the difference between getting a “fresh start” and a “false start.”

Your bankruptcy attorney will communicate with your creditors, the bankruptcy trustee, and the judge. Your attorney will attend the meeting of creditors with you, as well as any court hearings. Your attorney will be your legal representative throughout your bankruptcy.

If you are considering filing a bankruptcy case, consult with an experienced attorney and discover how to use the federal and state laws to your benefit. The federal bankruptcy process can be complex and intimidating, but an experienced attorney can guide you to a fresh financial start.

The Bankruptcy Code forgives many honest financial mistakes. However, it also provides creditor remedies for debts that may be less than honest. The Bankruptcy Code allows a creditor to object to the discharge of a credit card debt when there is evidence that the debtor has committed fraud.

A bank objecting to the discharge of a credit card debt on the basis of fraud will file an adversary case against the debtor. The fraud claim is usually one of two types: (1) fraud in obtaining the credit; or (2) fraud in incurring the credit.

A bank may claim that the debtor committed fraud in obtaining the credit card. If the creditor can prove that the card was obtained under false pretenses (i.e. that the application was false), the credit card debt may be declared non-dischargeable because of the fraud. False pretenses may include many things, but is usually lying about financial stability or income.

The bank may claim that a charge was made when the debtor was unable to repay, and had no intention to repay the debt. Because proving this may be difficult for the creditor, the bankruptcy law presumes that a charge is fraudulent if luxury goods are purchased, or a cash advance is taken, shortly before the bankruptcy case is filed. It is then up to the debtor to prove that the charge is not fraudulent or the charge is not included in the bankruptcy discharge.

Banks routinely check the bankruptcy debtor’s account for signs of fraud. Some red flag actions include:

• Filing bankruptcy on a new card;
• Taking a cash advance prior to filing;
• Charges for travel or vacation;
• A debt transfer from one card to another;
• Credit charges while unemployed; and
• Charges made after consulting a bankruptcy attorney.

The more time between the credit card activity and the bankruptcy filing, the less likely the charge will cause a discharge dispute. The best advice is: if you are considering bankruptcy, stop using your credit cards. Consult with your bankruptcy attorney regarding the best way to discharge your credit card debt.

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

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