Dallas Bankruptcy Attorney – Getting help with a Bankruptcy in the DFW Metroplex….
Bankruptcy provides a means to resolve debt issues in an instant. There are many misconceptions about bankruptcy and this page is meant to provide you a broad bankruptcy overview. Misconceptions lead to people either being afraid of bankruptcy or refusing to consider it. From process misunderstandings to outright lies, there’s more misconceptions about bankruptcy than about any other area of law, and the debt collectors like it that way. For example, many people believe that you will lose your retirement or 401(k) in bankruptcy. This is not true. You can keep your retirement and even the extra furniture in the garage. If you understand bankruptcy-including what it does and does not do, it can benefit your life and potentially give you the peace of mind you deserve.
Understanding Bankruptcy – How Does Bankruptcy Help Me?
Bankruptcy helps in two chief ways: automatic stay and discharge. What this means in practical terms is that it provides relief from harassment by creditors and it provides a means for you to reorganize your debt or start over. It can eliminate all of your debt in just a few months. It puts a stop to wasting hundreds of dollars each month on servicing credit card debt. It ends creditor harassment. The next time a creditor calls you and asks, Å“When are you going to make a payment? Â. Your mind doesn’t have to start churning with magic date you can come up with to get the guy off the phone. It can save your home from foreclosure. The cliche is true: bankruptcy gives you a fresh start. Instead of running around trying to keep up with your bills, bankruptcy allows you to restart at zero with a chance to start saving for the future.
Brief Bankruptcy History
Remember these words: bankruptcy is a privilege that is not guaranteed. You have to qualify for it. The origins of bankruptcy dates back to the beginning of our republic. Just like the 1st amendment, our founding fathers thought that bankruptcy was so important that it was included right into the ! The Constitution gave Congress explicit authority to establish the rules for bankruptcy. In 1938, Congress created the ability to file voluntary petitions. Subsequently, Congress has passed two major bankruptcy acts. The Bankruptcy Reform Act of 1979 and the Bankruptcy Abuse and Consumer Protection Act (“BACPA”) of 2005. Constitution of the United States
Bankruptcy Reform Act of 1979
The Bankruptcy Reform Act of 1979 setup our modern bankruptcy system as we know it today. Today there are six (6) different types of bankruptcy. Each bankruptcy type is handled by a unique chapter in the U.S. bankruptcy code. The chapters of bankruptcy are 7, 9, 11, 12, 13, and 15. Chapter 7 is known as the straight bankruptcy. It can be filed by both businesses and consumers. Chapter 9 is for governments. For example, Puerto Rico filed for bankruptcy under Chapter 9. Chapter 11 can be filed by both businesses and consumers. Chapter 12 can be filed by fishermen and farmers. Chapter 13 is like Chapter 11 except more generous in benefits and more restrictive on who can file under it. Chapter 15 is for foreign governments.
Our Dallas Bankruptcy Attorney provides help in three different bankruptcy chapters: 7, 11, and 13. We help people file re-organizational or liquidation (straight) types of bankruptcy cases. Chapter 7 bankruptcy (aka straight bankruptcy) provides relief for both individuals and businesses. The Chapter 7 process is quick from start to finish. The case is usually over in just 3 months. Chapter 11 and Chapter 13 are re-organizational types of bankruptcy. Chapter 11 has three different sub-types. The first sub-type is known as the complex chapter 11 case. These type of cases are filed by large corporations such as American Airlines or Toys ‘R Us. However, Chapter 11 isn’t just for big business. Small business owners and consumers who earn too much to qualify for Chapter 7 or 13 can file under Chapter 11. We help small business owners and consumer seek re-organizational debt relief under Chapter 11 or Chapter 13. Chapter 13 is filed by individuals seeDallas to save their home from foreclosure or car from repossession. Chapter 13 cases are also filed by those who don’t qualify for Chapter 7 because of their income. Both Chapter 11 and 13 require regular monthly payments and the confirmation a “plan” by the court.
The Bankruptcy Abuse and Consumer Protection Act of 2005
In 2005, Congress passed the Bankruptcy Abuse and Consumer Protection Act (“BACPA”). BACPA created significant limitations on who could file bankruptcy and what type of bankruptcy they can file. BACPA also introduced the concept of credit counseling. Before you can file for bankruptcy, you must obtain a credit counseling certificate. For individuals, this is when their bankruptcy case begins because this is the first thing that they are required to do by the court. Individuals must then take a second course called the financial management course after the case is filed (usually after the 341 hearing). Businesses, on the other hand, do not have to take the credit counseling course.
Initially, it seemed BACPA’s introduction of credit counseling was a good idea. Many organizations began offering credit counseling courses to debtors. For many years, Dave Ramsey offered a true credit counseling course where clients really learn something about managing their money. I used to enthusiastically recommend Dave Ramsey’s course to my clients. Over the last 10 years, competition has driven the cost of credit counseling down to a mere ten dollars. Interestingly, the price competition has had a detrimental affect on the quality of the credit counseling courses. Sadly, price competition drove Dave Ramsey’s excellent credit counseling course out of the market. We are all the worse for it. Today’s credit counseling courses are a mere shadow of their prior glory. These days it’s just a checkbox. A requirement that must be done before you can file for bankruptcy.
How does Bankruptcy Work?
Bankruptcy begins with the filing of a petition for bankruptcy in U.S. Bankruptcy Court. Your petition is the starting basis for the entire process. In the petition you select which chapter you wish to file. The petition provides the court with fundamental information about yourself and your financial situation. The petition sets the ground rules for what debt you can eliminate (via a discharge order). The petition helps the court determine if you qualify for bankruptcy. Your petition will include schedules which will list everyone you owe and what assets you still own. The people you owe money to are known as the creditors. You are considered the debtor.
The Automatic Stay
After you file for bankruptcy, the court issues an automatic stay against all of your creditors. The automatic stay is the first of two benefits provided by bankruptcy. It comes with the benefit of taDallas affect immediately after you file. This means that bankruptcy ends all bill collector calls instantly. They can’t call you. They can’t send you a bill. They can’t repossess your car. They can’t foreclose your home. They can’t even evict you. The automatic stay even stops the IRS. For most clients, the first night after filing is the best sleep that they’ve had in a long time. If you filed Chapter 11 or 13, you will need to make sure your first plan payment arrives at the trustee’s payment office within 30 days of your filing date.
It’s at this point cases begin to diverge. Once a case is filed, a trustee is assigned to oversee your case. Chapter 7 cases are randomly assigned to a number of trustees in the DFW metroplex. Chapter 11 cases are assigned to the U.S. Trustee’s office at the U.S. Department of Justice to oversee the case. Chapter 13 cases will have one of four different trustees. Tom Powers is the designated Trustee for most debtors in the DFW metroplex. Carey Ebert handles Plano and most of northern Dallas. Pam Bassel or Tim Truman is the assigned trustee for cases out of Fort Worth.
The Meeting of Creditors – 341 Hearing
The next big event is the assignment of the meeting of creditors known in the industry as the 341 hearing. The Court Clerk issues Chapter 7 341 dates automatically based on the assigned trustee. Chapter 13 cases work differently. Tom Powers and Carey Ebert issue their own 341 date directly. The general rule is to expect your 341 date assignment a few days after the assignment of the trustee. Be sure to mark it on your calendar. This is not a hearing you can miss. Your attendance will be mandatory. Remember to bring both your driver’s license and your social security card. Your attorney will prepare and deliver what is known as the 4002 docs to the trustee. Typically the 341 hearing is about 5 weeks out from the date of filing. However, there are instances in which it can be as little as 3 weeks or as much as 7 weeks.
During the 341 hearing, the trustee will examine your case. You will be asked a number of questions about your financial situation. It is important to answer the questions truthfully and honestly. If there are issues with your petition most will be will be raised at the 341 hearing by the trustee. It is not uncommon for amendments to need to be made to your schedules. If you filed Chapter 11 or 13, you’ll be seeDallas confirmation of your plan and will be maDallas monthly payments to the Chapter 13 trustee. For more information on plan confirmations and the process of those cases, see our sections on Chapter 11 and Chapter 13.
If you filed Chapter 7, you’ll take the second financial course. If you are keeping your home or car, you’ll also sign reaffirmation agreements. Finally, your attorney will work in the background. Provided you have what is known as a no-asset case, your job at this point is to await your discharge. More information about no-asset v asset chapter 7 cases is provided under the Chapter 7 page. Typically, the discharge order will go through 61 days after the 341 hearing. At this point it’s time to start rebuilding your credit and worDallas to improve your credit score. If our clients are interested in repairing their credit, we often recommend that they obtain a credit card through either Credit One or Capital One Bank.
Our Dallas Bankruptcy Attorney can help.
If you’re ready to start seeing the sun instead of the darkness of debt, give us a call at [phone] to setup an appointment. The Engel Law Firm, assists individuals in the Greater Dallas area with the entire bankruptcy process â€œ from deciding if this is the right choice, to filing the paperwork and representing our clients in court. Go ahead, make the decision to escape the burden and stress that debt creates, pick up the phone and get started today.
Do you wonder if you can qualify for a Chapter 7? Or if you’ll qualify for a Chapter 13? Our Dallas Bankruptcy Attorney can guide you through the process and show you your options for financial recovery including tips on repairing and restoring your credit.Still want to know more about the process itself? Take a look at our dedicated page on the bankruptcy process page which provides a rough road map about the mechanics of the Bankruptcy Process >> Click Here