Bankruptcy Blog
February 22nd, 2012 by Reed Allmand 
Most people who file Chapter 7 bankruptcy have little assets and qualify to have most of their unsecured debt discharged. Unsecured debt that may qualify to be wiped off or discharged includes medical bills and credit cards. Having little assets and qualifying debt can help make the process a lot easier. Keep in mind, there are specific qualifications that should be met in order to complete your bankruptcy case successfully.
In the beginning, you’ll share concerns and discuss your situation with your bankruptcy attorney who will review legal issues and solutions for your finances. You’ll present necessary documentation to have a petition created for your case. Credit counseling is required to be completed upon filing but if you have not completed it, a legal expert can recommend an approved agency for you to begin the counseling.
When your bankruptcy petition is completed, you’ll review and sign off on the documents so they can be filed with the bankruptcy court. Take time to review these documents carefully to ensure information is true and correct. The fee to file bankruptcy may be collected at this time.
When your case is filed, your creditors are notified about the proceeding and about a month or so after they are notified, a meeting is scheduled with the creditors and Trustee. Creditors often don’t attend but you will be asked questions about your finances under oath. The Trustee then creates a report that details their findings about your situation after the meeting. Creditors have about 60 days to object although this is rare. If no objection is made, your case may conclude in getting your debts discharged.
After your case has been filed, you’ll be required to complete a financial management course in order to receive a discharge of your debts.
February 22nd, 2012 by Reed Allmand
If you are in a Chapter 13 bankruptcy and you experience any reduction in your income, you may be able to file Chapter 7 under certain circumstances depending on your qualifications. There is a means test that can be taken to determine eligibility. The procedure for converting chapters may vary depending on what jurisdiction the filing will occur in.
If your income changes while in a Chapter 13 due to reduction of hours or you lose your job, contact your bankruptcy attorney or Trustee to let them know of your situation. You may be required to conduct a means test which determines eligibility by reviewing your income. The test gives an idea of what disposable income you have left after taking care of pertinent expenses.
You may also qualify for converting your bankruptcy if your expenses have changed. If you qualify to file Chapter 7 you’ll have to convert your case by filing a notice of conversion with the bankruptcy court . This is also known as filing a motion to convert your Chapter 13 case to Chapter 7. It’s common for debtors to experience changes in their financial situation and converting your case may allow you to get qualifying debts discharged.
Most cases that are converted are not challenged by the court when sufficient information is presented showing the need for the change. Discuss any changes to your income with your bankruptcy attorney.
February 21st, 2012 by Reed Allmand
To many consumers, this may be an odd question since the overall purpose of bankruptcy is to eliminate debt. While many debtors often include credit card accounts they are unable to pay, some may have a credit card account that is in good standing. A debtor may feel that the account in good standing may help them continue to build credit after bankruptcy but this theory may not be as simple as you think.
When you file bankruptcy, you are required to list all of your debts including accounts that are in good standing. Creditors will learn about your bankruptcy, even those who were not listed upon filing. When you file, the automatic stay goes into effect which affects all creditors. The credit card company in which you have an open account with may choose to cut off the usage of the card in order to avoid violating the stay.
If you want to keep the account you may need to contact the credit card company before filing. Mention that you intend to file for bankruptcy and ask if the card account can be reaffirmed during the filing. You should also discuss which debts can be or should be reaffirmed with your bankruptcy attorney.
February 21st, 2012 by Reed Allmand
Debtors looking to seek bankruptcy protection often are unable to make debt payments or want to have their debt reorganized so that it is easier pay on what is owed. Bankruptcy can help debtors deal with their finances but certain financial decisions made before filing may make your case more challenging and even decrease chances of getting qualifying debt discharged. Since bankruptcy laws can be complicated for those who are unsure about the process, it is important to review your situation with a bankruptcy attorney.
Some people look to make a payment to a creditor or someone they borrowed money from but this action may be scrutinized in the bankruptcy process if it is over $600 and it was made within 90 days of filing. If you happen to fall on hard times you may think about cashing out your retirement funds. This option is often not recommended for several reasons including the fact that retirement funds can be protected in bankruptcy.
If you have credit cards you should stop using them before filing. This may come off as possible fraud if you use them regularly and then begin the filing process. In many cases the debtor will still be responsible for paying what is owed on the card before bankruptcy. If you have questions about what activity can be done before filing, such as transferring a balance, taking a cash advance or using the card for any purchase, you may want to review your intentions with a bankruptcy attorney.
Transferring or selling personal property right before filing bankruptcy may make your case more challenging. This can include a house, vehicle or anything of value. Sometimes the action looks suspicious, especially if it was done illegally. Your bankruptcy attorney can review proper measures to take if you are interested in doing this type of transaction in order to avoid a legal chaos.
February 20th, 2012 by Reed Allmand
If you are being sued bankruptcy may be an option to consider. Chapter 7 bankruptcy allows for qualifying debt to be discharged while Chapter 13 restructures debt. A discharge means the debtor will not be obligated to pay toward the judgment. Many debtors have been able to get judgments discharged but it often depends on who and why the lawsuit was filed against you.
As a debtor, if you are being sued by a creditor for unpaid credit card accounts, medical bills and other certain unsecured debts, it’s likely your judgment will get discharged by the bankruptcy court. Keep in mind, some judgments may not receive a discharge; meaning the debtor will be responsible for paying the outstanding balance owed. Judgment situations related to the following will most likely be non-dischargeable:
- Debt incurred from fraud or theft.
- Injuries obtained due to misconduct of the debtor.
- Obligations related to back child support or spousal support.
- Motor vehicle accident that resulted in injuries or death cause by debtor operating vehicle while intoxicated.
- Penalties, fines and restitution owed to a government entity.
While the above list is not complete, it gives a general idea of the most common types of judgments that may not obtain a discharge. Questions or concerns can be reviewed with an experienced bankruptcy attorney.
February 20th, 2012 by Reed Allmand
There’s no denying that each individual will need to approach the issue of personal bankruptcy in his or her own unique way. However, with that being said, most individuals express the same concerns when filing for Chapter 7 or Chapter 13 bankruptcy. They worry that they’ll end up losing their homes, or they’re concerned about how long a bankruptcy will remain on their credit scores.
That’s why we have compiled the most popular questions about personal bankruptcy. If any of your questions aren’t answered here, be sure to contact a bankruptcy attorney for more information:
1. Will I lose my home if I file for bankruptcy? While the answer to this question is an undeniably frustrating, “it depends”, the truth of the matter is that the majority of personal bankruptcies won’t result in a lost home. New federal exemptions have made it possible for you to keep your home and car (up to a certain value). However, if you have vacation homes or more than one car, the bankruptcy courts might liquidate these assets to pay off your creditors.
2. Can bankruptcy protect me from foreclosure? Bankruptcy can protect you from foreclosure; in fact, federal law deems it illegal for your bank to take any foreclosure action against you during the course of the bankruptcy. This prevention of debt collection is known as an “automatic stay”, and it protects you from creditors who insist on collecting your debts.
3. How will my credit be affected? While there’s no denying that a personal bankruptcy will remain on your credit score for some time, the truth is that most people who file for bankruptcy already have poor credit. Additionally, if you try to continue paying your debts in an effort to keep your credit, you may end up with permanent bad credit, rather than just the few years it takes to rebuild a healthy score.
4. Which type of bankruptcy should I file for? Again, the answer to this question will depend on the individual filing for bankruptcy. For example, if you’re determined to repay your debts, a Chapter 13 bankruptcy will re-arrange your debts into a new repayment plan. If you want to wipe out your personal debts altogether (with some exemptions), then filing for a Chapter 7 bankruptcy makes more sense if you qualify.
Again, if you didn’t find the answer to your most commonly asked questions, contact a local bankruptcy attorney immediately!
February 17th, 2012 by Reed Allmand
For some reason, many people have different ideas about what types of debts are eliminated in a Dallas bankruptcy. Ask any one of your friends or family members, and you’ll experience a myriad of opinions. Some will insist that you’ll lose your house to bankruptcy, while others are convinced that all debts – even tax debts and student loans – are eliminated by filing a bankruptcy in Dallas.
If you are looking for a straightforward answer as to which kinds of debts are eliminated with a personal bankruptcy, you’ve found the right place. Our Dallas bankruptcy attorneys have complied a list of the debts you can wipe out – and which ones will remain in place once the bankruptcy smoke clears.
Medical Debts
Under federal law, medical debts can be wiped out by filing a personal bankruptcy. It’s not just you who’s breathing a sigh of relief at this news – as a vast majority of bankruptcies are caused by unexpected medical bills, this provides significant financial relief for much of the country.
Credit Card Debts
Filing for a personal bankruptcy in Dallas will allow you to eliminate credit card debts. However, please note that there are certain exceptions to this rule. For example, if you decide to go on a spending spree with your credit cards before filing for bankruptcy, the Dallas bankruptcy courts may throw out your case due to fraud. To ensure that your credit card debts are paid off, you need to show that they were only used to purchase necessities, like food, clothing (no designer clothes!), and housing.
Mortgages
If you want to stay in your home for the foreseeable future, it pays to file for a Chapter 13 bankruptcy if you are behind on your mortgage. This rearranges all of your debts into a new and much more manageable repayment plan. In order to file for Chapter 7 bankruptcy your mortgage must be current, but other debt can be eliminated which can help lessen your other financial burdens.
Student Loans, Alimony/Child Support, and IRS Debts
Unfortunately, filing for a personal bankruptcy in Dallas won’t get rid of student loan debt, alimony/child support payments, and some IRS debts. Bankruptcy courts will only dismiss the former if you can show that paying the student loans will greatly interfere with a reasonable standard of living. However, the burden of proof on this is severe, so get ready to show Dallas bankruptcy courts plenty of evidence.
February 17th, 2012 by Reed Allmand
Making the decision to file bankruptcy can be the first step toward reaching financial freedom. Now you’ll want to get prepared for your next step: meeting with your bankruptcy attorney. Being prepared for the first meeting with your attorney can save time and money. The first meeting is quite important since you and the attorney will discuss pertinent information about your case.
It helps to bring information about your finances to review with the attorney. This includes creditor information, loan agreements, contact information, bank statements and receipts to show payments made and foreclosure documents if proceedings are pending. If you are being sued or received any correspondences from creditors, this should also be presented. The information you bring will help the attorney get a better idea about your financial background. This also helps begin the bankruptcy process sooner.
The attorney may need to collect additional information from you about your finances. Be honest in answering any questions. Providing false details or withholding information may lead to your case being dismissed without getting debts discharged.
This is a good opportunity to ask any questions you may have. Before meeting with the attorney, make a list of questions and concerns to review. Ask if bankruptcy is an option for you and if not, what other options do you have. Ask about eligibility factors and any potential issues that could hinder your case moving forward.
February 16th, 2012 by Reed Allmand
You’re getting squeezed by your debtors. There’s not an hour that goes by when you don’t receive harassing phone calls from collections agencies. Every time you open your mailbox, you’re met by a cascade of final demands and urgent notice letters, all of which document exactly how much you owe to whom. It’s enough to make you want to tear out your hair, swear off modern life, and run away for good.
If this sounds familiar to you, we only have one question to ask you: what’s holding you back from filing for bankruptcy?
Locate your answer below – and get ready to be amazed by how many misconceptions you have bought into about Chapter 7 and Chapter 13 bankruptcies.
Bankruptcy Will Hurt My Finances.
Really? And those mountains of credit card bills, medical debts, and other loan demands won’t? Listen: these debts are designed to have you pay off as little as possible over a maximum time period (that’s how creditors make their money!). That means without bankruptcy, you’ll always be struggling with bad credit. With bankruptcy, you can immediately eliminate the old debt and start fresh. So which seems better: a lifelong struggle with bills, or just a couple of years rebuilding a great credit score?
Bankruptcy will Ruin My Credit For a Decade
Not likely. While there’s no denying that getting a loan or credit card after bankruptcy will be harder, think of it this way: what is the likelihood of you getting a loan or credit card now? Besides, with regular payments on your utilities, mortgage/rent, and other debts, your credit rating will bounce back a lot faster. Some individuals even report getting credit card offers and loan approvals within a couple of years after filing for personal bankruptcy.
I’ll Lose My Home
In personal bankruptcies (like Chapter 7) where your assets are sold to pay for your debts, there is a possibility that your home will be used. However, stronger federal exemptions have made this less likely. Additionally, if you file for a Chapter 13 bankruptcy, you won’t lose your home at all. Add to the fact that filing for bankruptcy halts the foreclosure process, and it’s no wonder more homeowners look to bankruptcy for the immediate relief they need.
Now that we’ve addressed your misconceptions about bankruptcy, ask yourself this: why haven’t you met with a bankruptcy attorney today to see if it is the option for you?
February 16th, 2012 by Reed Allmand
During Chapter 7 or Chapter 13 bankruptcy proceedings a trustee is appointed by the federal government to oversee the case. In most cases, a bankruptcy attorney or accountant will serve as the trustee. The trustee plays an important role during the bankruptcy process, including making sure debtors are in compliance with regulations, being honest about their situation and that fraud isn’t being committed.
When a trustee is appointed to your case, they examine information associated with your filing to make sure it is presented correctly to the court. A trustee may request additional information from the debtor to justify data in the petition. A bankruptcy case could be dismissed if fraud is suspected.
While both Chapter 7 and Chapter 13 have trustees appointed their roles differ depending on the chapter filed. Chapter 7 discharges or eliminates qualifying unsecured debts. In Chapter 7, if qualifying assets are present, the trustee would oversee the distribution to creditors if the assets have value. It’s common for debtors to not have assets of significant value when filing this chapter because there are exemptions in place to allow you to keep most assets.
Chapter 13 involves reorganizing debt through a structured payment schedule. This option usually has debtors making payments for a three to five year period. A Chapter 13 trustee makes sure debtors make their payments according to the repayment plan. The trustee will review the plan, oversee the process and collects payment from debtors to disburse to creditors.
