Houston Bankruptcy Attorney

If you are considering bankruptcy, it is important that you take into consideration many legal rights and regulations that will have an impact on your case.  Bankruptcy laws were put in place to help consumers and businesses from financial ruin.  By allowing individuals and businesses to have their qualifying debts eliminated or reorganized, bankruptcy offers all Americans a second chance at controlling their debt and a fresh start.

Attorney Paul Moody can help you through the bankruptcy process and make sure you make prudent informed decisions to successfully file a bankruptcy claim.

Houston Bankruptcy Lawyer

Types of Bankruptcy

The first decision you have to make is which kind of bankruptcy you should file for: Chapter 7 or Chapter 13? Chapter 7 is usually filed by persons with fewer assets and lots of unsecured debt. Homeowners who are trying to avoid foreclosure can file Chapter 13 to stop an action by their mortgage holder. It allows them to restructure their debt and keep their home.

For debtors seeking an opportunity to emerge out of a financial crisis and start afresh, then Chapter 7 of the Bankruptcy Code is the way to achieve this end relatively faster. Under Chapter 7 of the Bankruptcy Code all non-exempt property of the debtor is sold and the proceeds of the same are distributed to the creditors. In most cases where Chapter 7 is brought into force the debtor has no assets to lose, therefore the fresh start takes place relatively faster.

Also known as liquidation (converting assets into money) or a straight bankruptcy, Chapter 7 is the most common form of bankruptcy filing. This type of bankruptcy filing accounts for as much as 65% of all Consumer Banking filings.

As mentioned before, this is one of the faster ways of starting afresh, and more so if there are no Objections from any of the parties’ involved. Ordinarily, most (if not all) debts would be discharged. within months of the attorney filing a bankruptcy petition. A trustee is appointed who collects all non-exempt property, sells the assets and distributes proceeds from this sale to appropriate creditors. Chapter 7 is different from other bankruptcy filings because the debtor needs not make a payment to the trustee. Even though in some cases this would mean that you will lose all your assets, this need not always be the case. Under Chapter 7 Bankruptcy, the debtor receives a discharge on all dischargeable debts. There are 19 general classes of debt that are discharged under Chapter 7 Bankruptcy;

For individuals, some property is exempt from liquidation, meaning that the trustee cannot take it away. The individual may choose between federal or state exemptions (each state has different exemption rules). We will help you make that choice, depending upon your particular situation. Some common exemptions include a homestead, a car, certain personal property, a certain amount of cash, etc. Most individuals are able to exempt most, if not all of their property, meaning they do not lose anything in the bankruptcy process.

An added advantage with Chapter 7 is that by signing a reaffirmation agreement a debtor can continue to pay for a car loan or a mortgage on their home. This agreement is in place because as per the US Government Bankruptcy Code a debtor could be allowed to retain some or all of his property.

Debtors engaged in business would usually not like the prospects of liquidation and Chapter 11 might be a better option for such individuals associated with corporations and partnerships. Also, individuals with regular income if in a debt situation would be better suited to file a Chapter 13. Also, any person who has been granted a Chapter 7 discharge (or completed a Chapter 13 plan) within the last 8 years, cannot file for a Chapter 7 plan.

When someone files for bankruptcy under Chapter 13 of the Bankruptcy Code, their aim is to have the opportunity to repay some or all the debts in their name, in better terms, i.e. lower or no interest. Unlike Chapter 7 which involves liquidation of assets, this process involves. restructuring debts which allows the debtor to use whatever income they may have in the future to pay off the creditors. Filing Chapter 13 is thus applicable fore debtor who has a regular income, and thus can afford to request for such adjustments or reductions. The United States Bankruptcy Code gives the debtor a ceiling of 5 years, within which the creditors must be paid back. The entire process is carried out under the supervision of the courts.

While debtors are allowed to keep all of their property, the court approves a new interest-free plan for repayment. A written plan is created giving details of all the transactions that will occur, and the duration of the same. The repayment must begin within thirty to forty-five days after the case has started. The transitory stage of paying a trustee who then pays a creditor, as in Chapter 7 Bankruptcy is usually eliminated with Chapter 13 Bankruptcy. Although, in some cases people may involve a trustee who would take care of disbursing money to the creditors as per the plan. Also, as per the law the creditors must strictly adhere the repayment plan approved by the court and are in fact prohibited to collect any claims from the debtor. We will prepare hew repayment plan to best suit your situation.

The most important criteria for a person to be able to file for Chapter 13 bankruptcy is that the individual must have a regular income.

Bankruptcy is not for everyone. Some individuals and businesses do not qualify; others prefer to settle their debts outside of the bankruptcy court. Whether it be negotiating the debt owed, or litigating the validity or amount of the debt in court, we can help you solve your debt problems.

Texas Bankruptcy Statistics 2000-2020

During the 12 months leading up to March 31, 2020, Texas was the state with the highest number of Chapter 11 bankruptcy filings, totaling 1,002. Overwhelmingly, it was businesses that filed for Chapter 11 bankruptcy, accounting for 959 of the total bankruptcies in Texas during this period.  Chapter 11 bankruptcy is where the debtor negotiates with their creditors to alter the terms of their repayments. While the terms of the loans are changed, the outstanding debt still needs to be repaid.  Texas also has the sixth most personal bankruptcies in the nation.

Chapter 7 Filings
Chapter 13 Filings
All bankruptcy Filings

Are you considering bankruptcy?

There are some restrictions on who can file for bankruptcy protection in the United States. In order to be eligible, you must live, have a residence, piece of business or property in the country. You must take a means test to determine if you are eligible for Chapter 7 or if you will have to file under Chapter 13. The means test, along with a requirement for credit counseling, was added to the bankruptcy process by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), For Chapter 7, you must not have been granted a discharge under Chapter 7 or completed a Chapter 13 repayment plan in the past 6 years. You also must not have had a bankruptcy filing dismissed for cause in the past 180 days. Requirements under Chapter 13 Bankruptcy require that you have a regular income, have less than $250,000 in unsecured debt and less than $750,000 in secured debt.

Frequently Asked Bankruptcy Questions

Chapter 7 bankruptcy, sometimes call a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick “fresh start”. One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts. More information on Chapter 13.

There has been much doom and gloom written about the bankruptcy means test under the new laws and how much more difficult it’s going to be to file Chapter 7. It’s true that there are more hoops to jump through under the new laws and it’s true that the bankruptcy means test will result in some people having to file chapter 13 instead of Chapter 7. However, for the vast majority of filers Chapter 7 is still available with very little extra effort! That’s why it is very important to have a bankruptcy lawyer.

Yes, they will! By law, all actions against a debtor must cease once the documents are filed. Creditors cannot initiate or continue any lawsuits, wage garnishees, or even telephone calls demanding payments. Secured creditors such as banks holding, for example, a lien on a car, will get the stay lifted if you cannot make payments.

Your wife or husband will not be affected by your bankruptcy if they are not responsible (did not sign an agreement or contract) for any of your debt. If they have a supplemental credit card they are probably responsible for that debt. However, In community property states, either spouse can contract for a debt without the other spouse’s signature on anything, and still obligate the marital community. There are a few exceptions to that rule, such as the purchase or sale of real estate; those few exceptions do require both spouse’s signatures on contracts. But the day to day debts, such as credit cards, do NOT require both spouses to have signed. Community property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Your lawyer will be able to guide you in this regard.

Paul Is Here To Help You

Filing for bankruptcy can be a difficult decision.  You may be thinking that you are giving up or feel embarrassed.  Many times, people wait too long to file for bankruptcy.  Schedule a confidential consultation with Attorney Paul Moody.  He will look at your unique case and give you sound legal advice on how to proceed and what to expect.

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