The Decision To File For Bankruptcy
If you find yourself facing foreclosure, repossession, lawsuits, tax problems, or overwhelming credit card debt, it is time to seek professional guidance. For various reasons, people often wait too long before looking for help with their financial struggles and in some instances do not realize they are facing a financial crisis until it is too late. Signs that you are sinking into a financial crisis include missing house, car or credit card payments, robbing Peter to pay Paul, doing balance transfers to be able to pay off credit card debt, borrowing from your retirement plan, taking equity out of your homestead to service debt, taking out payday or title loans or simply running out of money before you run out of month.
If you are considering bankruptcy, board-certified bankruptcy attorney Vicky Fealy* will meet with you personally for a confidential discussion about your situation. She delivers the highest quality legal services with compassion and skill. It is her firm belief that her duty is to inform you of your legal rights and options in the most caring, straightforward manner possible.
We Can Help You Obtain A Discharge Of Your Debts
Many people are afraid to file bankruptcy due to the negative stigma associated with the process. There is a lot of misinformation about the long term effects of filing bankruptcy. One of the main concerns we notice is that people believe they will not regain credit for up to 10 years. In reality, bankruptcy provides people with a fresh start by eliminating their debt. You can begin rebuilding your credit immediately after your case is completed. By using good habits going forward, you can raise your credit score to the 700s within 2 years of a Chapter 7 bankruptcy. You can also qualify for a mortgage 2 years after your case.
Our Chapter 7 attorneys in Houston, Texas have years of experience representing clients who file bankruptcy. Our goal is to make an overwhelming process understandable and seamless for our clients. During the initial consultation, we analyze your unique situation to figure out if bankruptcy is the right solution. We also make sure you qualify for a Chapter 7 by completing a means test.
Once a case has been filed, an automatic stay provides immediate protection from your creditors. This means all collection calls will stop. Also, any pending lawsuits or garnishment actions will stop. In most cases, you will only attend one short meeting with a Trustee appointed to your case. The typical Chapter 7 case will be completed about 3 to 4 months after the case is filed.
Getting Professional Legal Advice
$0 to $2,500
As mentioned in the previous section, at some point in the bankruptcy process, you may decide to hire someone to help you. If you qualify for free legal aid and help is available near you, this could cost you nothing. Or, if you just want help with the mechanical task of completing the forms and dont need legal advice, you can hire a bankruptcy petition preparer .
But if you have questions about how to interpret a particular form, or want an opinion about how bankruptcy law, state exemption laws, or federal tax laws apply to your particular situation, you may want to hire a bankruptcy lawyer, at least for an initial consultation.
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Why You Should Fight Lawsuits By Credit Card Companies
There are a number of people that dont bother fighting credit card lawsuits. Some choose not to because they fear the legal system and lawsuits or think that the suit may be too expensive. Credit Card companies will file a lawsuit, and if you dont respond, they will get a judgment and wait to attack when you least expect it.
They may hold onto the judgment until you have a means to pay and then attach it to your home, bank account or other non-exempt property. Remember they still have the right to collect interest on the original amount. When you fight back, it usually catches them by surprise and they often soften to accept much less than they filed suit for.
They settle because they know if they waste time fighting you in court for years, you may just file for bankruptcy and all their efforts would have been wasted. But filing bankruptcy is not the best option for some people.
Protecting Your Exempt Property
If you file for Chapter 7 bankruptcy, the bankruptcy trustee assigned to your case may sell your property to pay your debts unless the law specifically allows you to keep all or a part of it. The property youre allowed to keep is called your exempt property. For example, exemptions may allow you to keep at least some of the equity in your home, a car, and personal property such as your clothes and household goods.
Bankruptcy exemptions arent automatic. You must figure out what is exempt and list that property on your bankruptcy forms, along with the specific laws that allow you to claim the property as exempt. Exemptions are determined by state law some states have their own exemptions, while others allow you to use the exemptions provided by the federal bankruptcy code.
For more information on Texas law, see the Exemptions section of this website.
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Glossary Of Important Terms You’re Likely To Find In Court Websites
- 341 Hearing
- Your meeting with trustee and any creditors who choose to attend. At this meeting the trustee will ask you questions about the papers you have filed and creditors can ask questions and raise objections. For most debtors, this is the only time you have to go to the courthouse.
- The new anti-consumer bankruptcy law passed by the Republican congress in 2005. BAPCPA imposes many new procedural requirements on debtors filing for bankruptcy and can result in dismissal of a bankruptcy case on for failure to meet technical filing requirements.
- Case Management/Electronic Case Filing – Attorneys are required to file documents electronically. Links with this descriptor deal with the procedures for electronic filing of documents. Debtors representing themselves do not have to do this
- Fee waiver
- If your income is less than 150% of the poverty level income for a family your size in your state, you don’t have to pay the bankruptcy filing fee and may also not have to pay the fees for mandatory credit counseling and debtor education courses. The relevant income levels can be found at.
|Persons in family/household|
- Filing as an attorney but from outside the district.
Take Credit Counseling Course
You have to take two mandatory credit counseling courses to complete your Chapter 7 bankruptcy. The Chapter 7 trustee may request the certificate of completion in the meeting of creditors. The first course is a pre-bankruptcy course, and the second is the pre-discharge course.
If you are filing with an attorney, your attorney may have suggestions for both the credit counseling and debt education course. If not, you can see the list of approved credit counseling courses in Texas.
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Determine Whether To Hire An Attorney To File Bankruptcy
Once you understand the cost, you can now determine whether to hire an attorney to file bankruptcy. Most attorneys will send you a retainer agreement that will outline the terms of the engagement. You will most likely need to submit information like pay stubs and tax returns for them to file the bankruptcy petition.
You may want to be aware of these 5 things when hiring a bankruptcy attorney.
How Does Chapter 7 Bankruptcy Work In Texas
For most people, the goal of Chapter 7 bankruptcy is to wipe out as much debt as possible. In legal terms, this is called having your debts discharged.
In exchange for your bankruptcy discharge, you must be willing to turn over any of your property that is not exempt under bankruptcy law. The bankruptcy trustee in charge of your case will liquidate the property to pay as much as possible to your creditors thats why Chapter 7 is often called liquidation bankruptcy.
This article covers:
- debts you owe under a divorce or separation agreement
- fines, penalties, or criminal restitution payments, and
- any debts related fraud youve committed or injuries youve caused.
In addition, you often cant discharge debts that are secured by a particular piece of property. For example, if you have a car loan, the lender may be able to repossess your car. If you have a home loan and cant show that your home is exempt under bankruptcy law, the lender may have the right to foreclose your mortgage.
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Texas Bankruptcy Lawyer Cost
The average cost of a bankruptcy lawyer in Texas is a little higher than the national average and ranges between $975 – $2,000. Often, lawyers offer free consultations to folks wanting to learn more about their options for Chapter 7 bankruptcy in Texas. It makes sense to take advantage of such a free consultation at a local law office, but make sure you ask how much it will ultimately cost you to hire the attorney.
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What To Expect When Selling Your Property While In Chapter 7 Or Chapter 13 Bankruptcy
Home-Selling Process After Filing for Chapter 7 Bankruptcy
During a Chapter 7 Bankruptcy case, you will not be able to do anything with your property without the approval of the trustee and bankruptcy court.
You will need to file a formal Motion to Sell Real Property. Important details like the selling price and how you plan to go about the proceeds of the sale must be included. In some instances, a trustee will want to sell your home to generate cash for creditors. The trustee will also have to get the permission of the court.
Home-Selling Process After Filing for Chapter 13 Bankruptcy
Work with an experienced lawyer who can help you complete a great deal of paperwork involved in selling your house while in Chapter 13. You must give your attorney enough time to negotiate the sale with your trustee.
Your lawyer will draft a Motion to Sell Real Property for approval by the bankruptcy court. It includes a proposal on how the proceeds from the sale will be distributed and used. Notice must also be given to all your creditors. Once this document is approved, the sale can move forward.
What Are Texas Bankruptcy Exemptions
In Texas, bankruptcy exemptions protect the debtors properties and assets during bankruptcy. Texas residents may opt to choose federal bankruptcy exemptions or state bankruptcy exemptions. However, debtors are not allowed to use both federal or state bankruptcy exemptions. Most debtors prefer to use Texas bankruptcy exemption laws due to benefits, such as the homestead exemption. Under the state exemption law, debtors can retain their homes based on the property size and location.
The state bankruptcy exemption law, for example, does not exempt properties situated on more than ten acres in the city. In addition, debtors can retain the proceeds from a sold property for at least six months after the sale. Note that Texas bankruptcy exemption laws cover properties that serve as the debtors primary residence. Thus, rental properties are not protected under Texas bankruptcy exemption laws.
Furthermore, personal properties, such as jewelry, clothes, motor vehicles, and furniture, are also exempt from bankruptcy. For a single debtor, the total value of exempted properties must not exceed $50,000. On the other hand, a joint filing for bankruptcy in Texas may double the total value of exempted properties to $100,00
In contrast, debtors may file for bankruptcy using federal bankruptcy exemption laws to take advantage of the wild card exemption rule. The wild card exemption rule enables debtors to exempt any preferred property.
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Collect Your Texas Bankruptcy Documents
Your first step should be to collect the documents youâll need during the bankruptcy process. Some documents, like your paycheck stubs, medical bills, collection letters you have received from creditors, and a recent copy of your credit report will be useful when filling out your bankruptcy forms.
Other documents, like the tax returns you filed in the 2 years before filing bankruptcy will need to be submitted to the bankruptcy trustee before your meeting of creditors. If youâre closing a bank account before filing your bankruptcy, make sure you get a complete copy of your bank statements for the 6 months before the account is closed. Your bankruptcy trustee may want to review your statements, and once an account is closed, it can be time consuming and even expensive to get them from the bank.
Try to be as organized as possible when collecting the documents for your Texas bankruptcy. It may take you a while to collect everything but when youâre ready to take the next step, youâll feel more prepared.
What Do Texas Bankruptcy Records Contain
Anyone who requests a Texas bankruptcy record from the federal courts can obtain personal information such as the debtors name, address, and contact details the attorneys name and phone number and the names and addresses of creditors. The record will also comprise financial information including schedules, amounts owed to creditors, the debtors assets, and current income sources. Lastly, relevant case information will be included, such as:
- The case number and case status
- The chapter filed for the case
- The filing and disposition dates
- The judges and courts name
- The closing, discharge, or dismissal order
- Information on the 341 meetings of creditors
- Proof of claim deadlines
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What Is Bankruptcy Protection In Texas
Bankruptcy Protection refers to a legal process where a bankruptcy court prevents creditors from claiming a debtors properties or assets. It prevents actions and appeals on judgments passed on a debtors assets before filing a bankruptcy petition. Thus, bankruptcy protection protects a debtors assets until the bankruptcy case is over.
What Are The Other Types Of Bankruptcy In Texas
Besides filing for a Chapter 7, 11, or 13 bankruptcy in Texas, persons or entities can also file for a Chapter 12 bankruptcy. First used in 1980 to reorganize farmers debts, the Chapter 12 bankruptcy petition specifically caters to farmers and fishermen. Eligible persons may file for Chapter 12 bankruptcy to prevent loss of properties and assets.
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Rebuild Your Credit After Filing Bankruptcy
Unfortunately, Chapter 7 bankruptcy can negatively impact your credit and Chapter 13 can negatively impact your credit. That said, you have an opportunity to rebuild your credit shortly after bankruptcy. To assist, you can use our free credit rebuilding portal designed to help you increase your credit score by 100 points in less than 6 months.
Explore Your Bankruptcy Options
At Leinart Law Firm, our overriding goal is to provide you with top-notch legal advice and help you obtain financial freedom. We utilize bankruptcy laws to help you stop collections, harassment, foreclosures, repossessions and wage garnishments. Our compassionate, competent team knows that the burden of insurmountable debt can be overwhelming. Were here to help you find relief, understand how to file for bankruptcy, guide you through the process and represent your interests at all bankruptcy proceedings.
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Full Production Of Documents
Disclosing your assets and liabilities also requires documentation to support your claims. This documentation is collected before your case is filed. Our attorneys will identify for you what documents you will need to collect by providing a thorough checklist. In addition, you must produce your previous four years tax returns. If you do not have these records with you, our attorneys have the IRS contact information you need to obtain the necessary transcripts.
Advantages Of Chapter 13 Bankruptcy
Most people thinking about bankruptcy will choose Chapter 7 if they qualify for it, because Chapter 7 is usually over in just a few months and it totally wipes out most debts. But Chapter 13 may be right for people who are overwhelmed by secured debt because it offers ways to:
- restructure mortgage payments to save a home from foreclosure
- reduce the amount of some secured loans to match the value of the property , and
- reduce certain tax debts that cant otherwise be discharged in bankruptcy.
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