Bankruptcy FAQ’s
In Dallas, Garland, Irving and Mesquite, Texas
What is involved in the bankruptcy process?
Will I lose anything if I file for bankruptcy?
When do I get relief from creditor harassment?
Is my bankruptcy status confidential?
What is an adversary proceeding?
How is an adversary proceeding initiated?
What is a determination of discharge ability?
How do I know if I should file for bankruptcy?
How do I begin to reestablish my credit after filing for bankruptcy?
What's the difference between Chapter 7 and Chapter 13 bankruptcy?
How often can a debtor file for Chapter 7 bankruptcy?
What if a Chapter 7 or Chapter 13 case was dismissed?
When can a Chapter 7 debtor file for Chapter 13?
What property can be garnished? What property cannot be garnished?
Can filing for bankruptcy stop a garnishment or a judgment?
Can my property be repossessed because I am late making a payment?
Can a repo agent take back property with no warning?
If my vehicle has been repossessed, do I still owe money?
If my vehicle has already been repossessed, what can I do to get it back?
What property is exempt from creditor claims?
Which debts are not able to be discharged when filing for bankruptcy?
Can I file for bankruptcy separate from my spouse?
What is involved in the bankruptcy process?
You will sit down with Attorney Billy D. Price for a thorough bankruptcy evaluation. After he assesses your situation, you will proceed to filing for either Chapter 7 or Chapter 13 bankruptcy. The paperwork detailing your financial history goes through the local court and a trustee is appointed to your case. If you file Chapter 13, you will submit a plan of action and timeline for repayment of your debts, over the next 3 - 5 years. During the term of your plan, you will send a consolidated monthly payment to the trustee, and he or she subsequently pays your creditors.
Will I lose anything if I file for bankruptcy?
Filing for bankruptcy is a process that is designed to help clients hold onto their personal assets while achieving relief from creditors. In most cases, clients are able to hold onto to personal belongings such as their house, car and other possessions. State exemption laws are written to protect your property. Clients who fail to file for bankruptcy may actually be more at risk for losing their personal property.
When do I get relief from creditor harassment?
Attorney Billy D. Price will give you advice about dealing with creditors and measures to take to stop invasive phone calls and letters immediately.
Is my bankruptcy status confidential?
When you file for bankruptcy with Attorney Billy D. Price, your information is kept in the strictest confidence. When your filing is complete, the IRS and creditors will be notified of your Chapter 7, Chapter 13 or Chapter 11 bankruptcy status. When the bankruptcy filing is complete, your bankruptcy will become a matter of public record.
What is an adversary proceeding?
Under Bankruptcy Rules, an adversary proceeding may be filed in a debtor's bankruptcy action for certain specific reasons. Creditors may initiate adversary proceedings to determine the validity or priority of a lien, to determine the validity of a debt, to obtain an injunction, or to subordinate a claim of another creditor. The debtor in possession may institute an adversary proceeding to recover money or property for the estate. An adversary proceeding is a lawsuit filed within a bankruptcy case. The proceeding takes place in the bankruptcy court and is tried by the bankruptcy judge.
"Adversary proceeding" is defined by the Bankruptcy Rules as a proceeding before a bankruptcy judge for legal, equitable or declaratory relief that arises under applicable law. Any of the following proceedings are considered adversary proceedings:
- to recover money or property, except certain proceedings including those to compel the debtor to deliver property to the trustee;
- to determine the validity, priority, or extent of a lien or other interest in property, other than a proceeding involving liens impairing debtor's exemptions;
- to obtain approval for the sale of both the interest of the estate and of a co-owner in property;
- to revoke an order of confirmation of a Chapter 11 bankruptcy , Chapter 12 or Chapter 13 plan;
- to determine the discharge ability of a debt;
- to obtain an injunction or other equitable relief;
- to subordinate any allowed claim or interest, except when subordination is provided in a Chapter 9, 11, 12 or 13 bankruptcy plan;
- to obtain a declaratory judgment relating to any of the foregoing; or
- to determine a claim or cause of action removed pursuant to the United States Code.
How is an adversary proceeding initiated?
Adversary proceedings are initiated by filing a complaint with the bankruptcy court to resolve both federal and state law issues.
What is a determination of dischargeability?
Objections in bankruptcy cases occur most often when a creditor is alleging that a debt should not be forgiven or discharged because of fraud, but it can also happen if a creditor thinks the debtor is abusing the system, has not disclosed assets, or has not fairly characterized its claim. A debtor or any creditor may file a complaint to obtain a determination of the dischargeability of any debt. In a Chapter 7, chapter 12, or chapter 11 bankruptcy case, a complaint to determine the dischargeability of any debt must be filed not later than 60 days following the first date set for the meeting of creditors held pursuant to Section 341(a). The bankruptcy court must give all creditors not less than 30 days notice of the time. On motion of any party, after hearing on notice, the bankruptcy court may for cause extend the time, but the motion must be made before the time has expired. If the creditor prevails, the debt or claim is declared to be non-dischargeable by the bankruptcy court, and the creditor may attempt to recover the debt under state laws that may apply.
How do I know if I should file bankruptcy?
Several factors should be evaluated when deciding whether or not to file for chapter 7, chapter 12, or chapter 11 bankruptcy. If you have received notice of home foreclosure, or if your car is about to be repossessed, quick action by a qualified bankruptcy attorney can help you save your assets.
- Is your home being foreclosed or is your car about to be repossessed?
- If your house is being foreclosed or your car is about to be repossessed, Chapter 7 may not be an option. Chapter 13 may save your house and your car.
- Do credit cards or medical bills have you so deep in debt that it is hard for you to save for the future?
If you are only paying the minimum payment on the credit card bills from month to month (generally from two to three percent of the outstanding balance), and the interest rate is only 15%, you will take about 20 years to pay off a $10,000 debt. Do you really want to be in the same financial situation in twenty years? Chapter 7 bankruptcy can provide you with a fresh start that you are entitled to under the law and get you out of debt NOW.
How do I begin to reestablish my credit after filing for bankruptcy?
Although bankruptcy may legally be reported to your credit report for up to 10 years, you can begin reestablishing credit immediately. Remember that "credit" is your ability to borrow money. Lenders consider many factors while determining whether to loan you money, but most importantly, they consider your debt-to-income ratio. If you have more debt than ability to pay, then your credit record is in jeopardy.
Bankruptcy eliminates most, if not all of your debts, therefore reducing your debt-to-income ratio, potentially improving your ability to borrow money in the future. Some financial institutions actively solicit business from people who have filed bankruptcy. Lenders are in business to make money by lending you money and charging you interest. Lenders know that once you have filed bankruptcy, you will not be able to file again for 6 years.
Many of our clients have purchased cars immediately upon receiving their discharge orders. Many lenders have programs that provide for post-bankruptcy borrows to obtain home financing within a year or two after a bankruptcy discharge. Many of our clients even receive solicitations for unsecured credit cards almost immediately upon receiving their bankruptcy discharge.
What's the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 "liquidation" is the process by which debtors are rid of many of their debts. Chapter 13 "reorganization" is the process by which an individual or a business prepares a plan for repayment of creditors.
How often can a debtor file for Chapter 7 bankruptcy?
A debtor can file for Chapter 7 bankruptcy every eight years. The eight-year time period is measured from filing date to filing date. No matter how dire a bankrupt debtor's financial situation becomes, he or she cannot file another Chapter 7 until eight years after filing for Chapter 7. If, however, a Chapter 13 debtor received a discharge in good faith after repayment of at least 70 percent of its unsecured debts, the eight-year prohibition does not apply.
What if a Chapter 7 or Chapter 13 case was dismissed?
When a bankruptcy case is dismissed, the bankruptcy proceeding ends and the debtor is not adjudicated as a bankrupt. The debts are neither liquidated nor reorganized. Accordingly, the eight-year bar does not apply. However, a debtor cannot file for Chapter 7 bankruptcy if his previous Chapter 7 or Chapter 13 petition was dismissed within the past 180 days for either of the following reasons: the debtor violated a court order or the debtor himself requested the dismissal after a creditor sought relief from the "automatic stay" provided by filing of the bankruptcy petition.
When can a Chapter 7 debtor file for Chapter 13?
Although a Chapter 7 debtor is barred from filing a subsequent Chapter 7 petition for eight years after the Chapter 7 discharge, he or she can file a petition for Chapter 13 bankruptcy at any time. A debtor would do so in order to obtain a discharge of his or her "post-petition" debts that were incurred after filing for Chapter 7. For instance, a Chapter 7 debtor who has had her debts liquidated may encounter a subsequent emergency or a disaster that leaves her in "new" debt.
What property can be garnished? What property cannot be garnished?
When property or paychecks are garnished, that means the creditor can take money from your paycheck and have it go straight to the creditor. Bank accounts are one thing that can be garnished.
However, your bank account or your paycheck cannot be garnished until the creditor gets a judgment against you in the court of law. If there is not a judgment against you, then it is not legal to have your bank account or wages garnished.
Can filing for bankruptcy stop a garnishment or a judgment?
Filing bankruptcy will end the garnishments to your wages that are earned after the complete filing of the bankruptcy.
The wages you earned previous to the bankruptcy filing may be recoverable from the pursuing party except under the circumstances that the wages would have been exempt.
Can my property be repossessed because I am late making a payment?
Most repossessions occur because a borrower failed to make one or more payments. Your contract may allow for a grace period, but many contracts have strict provisions that permit repossession after minimal time.
Can a repo agent take back property with no warning?
Although in many cases it is legal for a creditor to repossess as soon as you default, many companies utilize unfair or illegal repossession tactics. If repo agents fail to follow the law, you may be entitled to a return of your vehicle and money damages. Repo agents can come on your property, but may not enter your home or garage.
If my vehicle has been repossessed, do I still owe money?
In most cases, once a car has been repossessed, the debtor will be free of obligations. However, if the creditor sells the car for a lower amount than you owe, he or she may be able to sue you for the deficiency.
If my vehicle has already been repossessed, what can I do to get it back?
The creditor will likely offer you the opportunity to pay the total amount due. If you cannot pay in full, the creditor can sell the vehicle under law. However, he or she is also required by law to inform you of the time and date of the sale, allowing you to bid on the property.
What property is exempt from creditor claims?
A major theme of the bankruptcy system is that the honest debtor is entitled to a ''fresh start'' after discharge. At least the necessities of life are required by the debtor, spouse, and dependents to make the fresh start meaningful, which is the purpose of exemptions. Exempt property is property that can be kept by the debtor and not distributed to creditors in the bankruptcy case.
Every state has its own scheme setting forth property that is exempt from claims of creditors. The Bankruptcy Code introduced a uniform set of federal exemptions, but it continues to allow individual debtors the option of selecting the state exemptions plus any exemptions available under federal non bankruptcy law. Debtors using state exemptions may also claim any interest in joint tenancy or tenancy by the entireties property that is exempt from process under non bankruptcy law.
Married joint debtors or married debtors whose cases have been consolidated may each claim a set of exemptions. They may use either state or federal exemptions, if federal exemptions are allowed, but one spouse cannot use state and the other federal exemptions. If they cannot agree, they are both deemed to have elected federal exemptions if allowed in that state.
Which debts are not able to be discharged when filing for bankruptcy?
The major reason for an individual going through a bankruptcy case in any chapter is usually to obtain a discharge. This operates as an injunction prohibiting creditors holding prepetition debts from collecting them from the debtor. Certain debts are not dischargeable as to individuals under Chapters 7, 12, chapter 11 bankruptcy ,and under the Chapter 13 hardship discharge. Nondischargeable debts that are pertinent to family law issues include the following:
- Alimony, maintenance or support of a spouse, former spouse or child that arose in connection with a separation agreement, divorce decree or other court order, and obligations that are in lieu of such orders; and
- Property division obligation arising under separation agreement, divorce decree, court order or order of governmental unit, unless the debtor is unable to pay from income necessary for the support of the debtor or dependents or, if the debtor is in business, is unable to pay from income necessary for the continuation, preservation and operation of the business.
Can I file for bankruptcy separate from my spouse?
Yes. Most of the time both spouses filing petitions or a joint petition will have the same economic goals. However, not all spouses have unity of economic interests. If spouses have conflicting goals or if one course of action will achieve results having greater benefit for one spouse than the other, they have a right to independent legal advice. Each spouse has the right to undivided loyalty of an attorney, and an attorney has the corresponding duty to act without conflicts of interest.
Garland Attorney Billy D. Price can answer all your chapter 7, 13, and chapter 11 bankruptcy questions. Call our office today to schedule your free, confidential debt relief consultation.
