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What to Know About Credit Counseling and Bankruptcy
If you are filing for bankruptcy protection, bankruptcy law requires that you complete credit counseling within six months prior to filing bankruptcy. In order to proceed with the bankruptcy process you will have to submit a certificate of completion of credit counseling to the court, regardless of whether you plan to file for Chapter 7 or Chapter 13 protection.
Credit counseling is required to ensure that there are not better options to filing for bankruptcy, since other debt-management alternatives are available, and also to help prevent situations that necessitate bankruptcy in the future. Done correctly, credit counseling is one of the benefits of applying for bankruptcy protection. Speak to an experienced Houston, TX bankruptcy attorney to understand the details of the credit counseling process.
Bankruptcy Trustees 101 | Texas
Of all the aspects of the bankruptcy process, one that will have a significant role in the bankruptcy is the bankruptcy trustee. But if you are facing bankruptcy you are likely unfamiliar with the role of the bankruptcy trustee in a bankruptcy, which varies depending on whether you are filing for Chapter 7 or Chapter 13 bankruptcy. While your attorney can advise you on the trustee’s role in your case, it can be helpful to have a general idea of what the title "Bankruptcy Trustee" actually means.
What is a Bankruptcy Trustee’s Role?
In Texas, the bankruptcy trustee is appointed by the U.S. Trustee’s Office. The bankruptcy trustee is employed by the U.S. Department of Justice and works for the bankruptcy court. Their main role in the bankruptcy proceeding is to facilitate the bankruptcy process. The trustee acts as the go-between for you as the debtor and the bankruptcy court. Although trustees have a lot of powers, the court must authorize any action they take.
What to Do if a Creditor Objects at Your Confirmation Hearing
One of the final stages of a Chapter 13 bankruptcy is the confirmation hearing. At the confirmation hearing, the court will review your repayment plan to ensure that it meets the legal requirements. Your creditors will have the right to object at this hearing if they feel that their interests are not being adequately protected. If any of your creditors object, you will need to either negotiate with your creditor to resolve the issue out of court, or fight to convince a judge that your proposed repayment plan should be accepted. If you suspect that one of your creditors will object at your confirmation hearing, it is especially important to have a skilled Houston, TX bankruptcy lawyer representing you.
Involve a Bankruptcy Lawyer Immediately
If you had been planning to represent yourself throughout your bankruptcy proceedings, this plan may no longer be feasible. Objections at the confirmation hearing can create serious legal barriers to completing the bankruptcy process, at least in a way that is ultimately beneficial to you. Your creditor is almost certainly represented by counsel, and you should be too. An attorney should handle all communications with your creditors going forward, as he or she is in a better position to negotiate or address legal threats.
3 Signs It Is Time to Consider Bankruptcy
Deciding to file for bankruptcy is never easy. You may have been taught to view bankruptcy as a type of financial failure, but in reality, it can be a very big positive. People find themselves in extreme debt for a lot of different reasons that have nothing to do with financial irresponsibility. You may have had an excellent job when you took out a loan only for the company you worked for to close without warning, or had a serious accident that left you unable to work and caused you to miss credit card payments. Declaring bankruptcy can work as a sort of "reset button" on your financial life. You can get out of debt quickly and begin rebuilding your credit right away. An experienced Conroe, TX bankruptcy attorney can help you decide whether it is time for you to start considering bankruptcy.
Your Creditors Are Constantly Trying to Reach You
You are getting calls, letters, and emails almost daily - or multiple times each day - and you are tired of dodging these attempts at communication. You dare not answer the phone for unknown numbers because it is probably a creditor and you know you cannot make a payment today. Filing for bankruptcy stops most collection efforts immediately. As soon as your creditors hear that you have filed, they must stop attempting to get you to make a payment.
What to Expect From the Liquidation Process
Making the decision to declare bankruptcy is never easy. It can be an upsetting experience, even if it is clearly the wisest course of action. Most people choose Chapter 7 bankruptcy, which does involve liquidating your assets. Liquidation refers to the process of selling off your assets to pay back as much of your debt as possible before the rest of it is cleared away. While the idea of liquidation might be intimidating, the reality is rarely as bad as people expect it to be. An experienced Galveston, TX bankruptcy attorney can talk you through what liquidation will be like for you.
Inventorying Your Assets is the First Step in Liquidation
The first thing your attorney will help you do is inventory your assets if you did not already do this while qualifying for Chapter 7 bankruptcy. This means taking an accounting of everything you own and what it is worth. Even if an asset is probably going to be exempt from the liquidation process, your lawyer will still want to know about it. Most people who qualify for Chapter 7 bankruptcy have very few valuable assets, so this process is often quick and easy. You do not need to inventory every single item you own, but should report anything of value.
Are Alimony and Child Support Debts Cleared in Bankruptcy?
It is normal for people to struggle financially after getting divorced. It is easier to maintain a household when there are two adults to share financial and childcare responsibilities. Child support and alimony can consume a significant portion of your income. Your financial situation might also have changed after you got divorced, causing you to fall behind on child support and alimony payments. You may also have taken on debt while establishing a new household and replacing things like furniture you lost in the divorce. While child support arrearage cannot be cleared during bankruptcy, past-due spousal support sometimes can. A Brazoria, TX bankruptcy attorney can help you understand how bankruptcy might affect your family law obligations.
Spousal Support Debt is Sometimes Cleared in Bankruptcy
If you are behind on alimony payments, this debt may be dischargeable during bankruptcy in certain circumstances. Alimony is intended for situations where the former spouses are not on equal economic footing and one spouse was earning enough to support the family. If you are filing for bankruptcy, you are probably no longer in a better financial position than your spouse and cannot keep paying support.
Can One Spouse Declare Bankruptcy Without the Other? | TX
You can file bankruptcy with or without your spouse. Most married people who are not legally separated file for bankruptcy at the same time. Both parties’ finances are usually closely entwined in a marriage, meaning that if one party is struggling financially, so is the other.
However, there are some situations where only one spouse needs to declare bankruptcy. If you are married and considering filing for bankruptcy, it is important to understand how bankruptcy can affect both you and your spouse. You should speak to an experienced Brazoria, TX bankruptcy attorney who can assess your specific situation and help you move forward.
Why Would Only One Spouse Need Bankruptcy?
The most common reason why one spouse would want to file bankruptcy without involving the other is the existence of premarital debt. For example, say you took out a credit card when you were 18 years old and quickly maxed it out, then fell into a cycle of using payday loans as a recent college graduate, years before you met your spouse. You have not been able to pay it off yet due to high interest rates and a lack of disposable income. In this case, the debt is likely yours alone and there is no need for your spouse to join you in filing for bankruptcy, especially if he or she has little or no debt attached to his or her name.
Do I Qualify for Chapter 7 Bankruptcy?
Most people who are considering bankruptcy would prefer to file under Chapter 7. When you file Chapter 7 bankruptcy, any non-exempt assets you own are liquidated and used to pay back a portion of your debt. Once the liquidation process is over, the balance of your debt is cleared. While Chapter 13 does not involve liquidation, it does require you to spend almost all your disposable income on debt repayment for three to five years. When you consider the list of assets that are exempt from liquidation, it is easy to see why most people would prefer to file under Chapter 7. However, to qualify for Chapter 7 bankruptcy, you must pass a means test or show that your income is too low to allow repayment. An experienced Harris County, TX bankruptcy lawyer can help determine whether you qualify for Chapter 7 bankruptcy.
Qualifying for Chapter 7 Bankruptcy Based on Income
Chapter 7 bankruptcy is not meant to allow people whose income is high enough to allow for repayment to escape debt. People whose income is higher than the median income in their county usually cannot file under Chapter 7. The size of your household is taken into consideration. For example, say the median income overall in Harris County is $35,000 but the median income for someone supporting a family of four is $60,000. You have a family of four. If you earn under $60,000, you likely qualify for Chapter 7 bankruptcy.
Is it Possible to Discharge Student Loans in Bankruptcy?
People with advanced degrees are just as likely to struggle with debt as anyone else. Often, this happens after a long illness, a sudden change in the economy, or a business venture that did not work out. Having student loan debt can lead to wage garnishment in Texas. Normally, student loans are not discharged in bankruptcy. However, in some very limited circumstances, it is possible to discharge your student loans by filing for bankruptcy. A few strict requirements must be met in order to find relief from student loan debt this way. If you are in a position where you are very unlikely to ever regain the ability to make payments toward your student loans, you should speak with a Houston, TX debt relief lawyer to see if you qualify.
When Can Student Loans Be Discharged in Bankruptcy?
Most often, it is people who become permanently disabled after taking out student loans who qualify to discharge their student loan debt. You may be eligible to discharge your student loans through the bankruptcy process if you meet these requirements:
What is Creditor Harassment?
Both Texas state law and the Federal Fair Debt Collection Practices Act protect debtors against unfair, abusive, or excessively annoying conduct by creditors. Just because you owe money does not mean that you deserve to be harassed by your creditors. In fact, if one of your creditors is harassing you, they may be breaking the law. While most people are sometimes annoyed by a creditor's attempts to collect a debt, there are limits on what a creditor can do in an effort to get paid. A Houston, TX debt relief attorney may be able to help you not only take steps to stop the harassment, but work towards your ultimate goal of complete debt relief.
Examples of Creditor Harassment
While creditors can generally contact you - even repeatedly - there are limits regarding when and where they can attempt to make contact. Examples of creditor harassment include:
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