FILING FOR BANKRUPTCY IN SAN ANTONIO
If you live in the San Antonio, Texas area and are considering filing for Bankruptcy, there are some things you need to know. The first thing to understand in making the decision to file for bankruptcy is to know that nobody ever wants to file for bankruptcy. However, when you have tried to avoid filing for bankruptcy but the weight of debt is preventing you from living a normal life, you would be wise to consider the benefits of bankruptcy. That is why several million people a year file for bankruptcy protection...not to get out of paying their debts, but to get relief from debts once they have tried every way possible to pay their debts but it has become overwhelming and they are worthy of the fresh start bankruptcy has to offer the honest American living in San Antonio.
The text of the bankruptcy law itself contains the words "fresh start" for a reason. The law is intended to help honest people who find themselves under the weight of unmanageable debt for whatever reason, a path to being free from debt, getting a fresh start and being able to enjoy a productive and happy life going forward after a bankruptcy discharge.
HIRING A SAN ANTONIO BANKRUPTCY ATTORNEY
The best way to find out how your specific situation would play out in a bankruptcy case is to consult with and hire a San Antonio Bankruptcy Attorney who is experienced in handling bankruptcy cases in San Antonio, Texas. The following list of questions are all things that a qualified and experienced San Antonio Bankruptcy Attorney can and should answer in advising you on the bankruptcy process. It should always begin with determining whether bankruptcy can even help you in your current situation, what type of bankruptcy case you should file and whether you qualify.
There are different requirements under the different chapter of bankruptcy and a lot depends upon your income, your assets, recent events and the nature of your debts. So getting advice from a qualified and experienced San Antonio Bankruptcy Attorney is the best way to know what your best option is or whether you should even file for bankruptcy.
So let's begin answering some of these questions about the bankruptcy process:
CAN BANKRUPTCY HELP ME?
This is the first question to ask and the answer is based upon a number of factors, including the type of debts you have, the amount of debts, when they were incurred, the assets you currently own, your income and whether you have transferred assets or other conduct that can impact a bankruptcy case.
TYPES OF DEBTS
Some debts cannot be discharged in a bankruptcy case, such as most student loans, criminal fines and restitution, most domestic support obligations and some taxes. This is why an experienced San Antonio Bankruptcy Attorney can quickly determine and advise you on whether bankruptcy can even help you based upon the type of debts you have.
For example, if the only debts you owed were federal student loans from an accredited state college, filing for bankruptcy may not do much to help you. However, if most of your debts were credit card debts incurred over a period of years, filing for bankruptcy may very well give you the fresh start you need to get on with your life.
AMOUNT OF YOUR DEBTS
Under some types of bankruptcy cases, such as a Chapter 13 bankruptcy case, there are debt limits that would prevent you from filing if the amount of your debts exceeds the limits allowed. This is not really a factor in a Chapter 7 bankruptcy case but in Chapter 13 bankruptcy cases, it is a very important factor. An experienced San Antonio Bankruptcy Attorney can give you the expert advice you need on whether debt limits factor into your bankruptcy case, based on what your goals are in filing for bankruptcy and what chapter under the bankruptcy law is best for you.
WHEN YOUR DEBTS WERE INCURRED
When debts are incurred too close to the date of filing for bankruptcy, those debts may not be able to be discharged. This might defeat the entire reason why you filed for bankruptcy in San Antonio so you need to be aware that this is an important factor to consider before filing for bankruptcy. Some people wrongly believe that they can just go out right before they would file for bankruptcy and an incur new debts and just add them in with other older debts and everything will be discharged. This is called "loading up on the eve of bankruptcy" and is a huge no-no! So, timing of when debts were incurred is a very important consideration because there are various "look back" provisions in the bankruptcy law.
AMOUNT AND TYPE OF YOUR ASSETS
Many people mistakenly believe that you lose everything you own when you file for bankruptcy. This is simply not true! Under a Chapter 7 bankruptcy, there are certain types of assets that you get to keep. We call these "exempt" assets because they are exempt from liquidation based on the specific exemption laws that govern your case. Sometimes state law governs what assets are exempt in bankruptcy and sometimes federal bankruptcy law will govern which of your assets are exempt (protected) when you file for Chapter 7 bankruptcy. The exemption law that governs your bankruptcy case will determine whether your home, cars, personal property such furniture, clothing, household goods, retirement accounts and other assets are exempt or protected and to what amount. This is why it is so important to have an experienced San Antonio Bankruptcy Attorney who can determine exactly what you will get to keep in your bankruptcy case and what is subject to liquidation by the Trustee to pay your creditors.
AMOUNT OF YOUR INCOME
The amount of money you make is very important in determining whether filing for bankruptcy can help you with your debts. When the bankruptcy law was amended in 2005, it established "means testing" for Chapter 7 bankruptcy. If you make too much money, you may not qualify for a Chapter 7 bankruptcy case and may instead have to file a Chapter 13 bankruptcy case and repay your creditors over time. The important thing to remember is that the bankruptcy means test does not just look at your current income. It looks at your income in the 6 month period before you filed your bankruptcy case to determine whether you qualify for a Chapter 7 bankruptcy case. Also, certain income (such as social security benefits) do not get counted under the means test. This is a very technical calculation and a perfect example of why it is always a bad idea to not hire an experienced San Antonio Bankruptcy Attorney and instead try to file on your own without an a lawyer. The devil is certainly in the detail when it comes to filing for bankruptcy in San Antonio.
ASSET TRANSFERS AND PREFERENTIAL PAYMENTS
Just like the "look back" periods mentioned above related to when debts were incurred, there are a number of other very important types of conduct issues and look back periods that are examined when you file for bankruptcy. The most important issue is whether you have given away, sold or transferred assets prior to filing for bankruptcy. There is normally a 2 year look back on asset transfers (some are longer depending on the type of asset) and not disclosing this fact of timing your filing in light of this fact could be disastrous. Not only might you not get a discharge of your debts, the main reason you filed for bankruptcy, but the Trustee could still go recover (take back) those assets you transferred and sell them to pay your creditors. Think about it, if people could just transfer assets out of their name to a relative or friend prior to filing a bankruptcy, who would just transfer them back after the bankruptcy case, that would not be fair to creditors.
Another conduct and timing issue deals with paying back some creditors too close to when you filed for bankruptcy but not paying back other creditors. The bankruptcy law calls this a preference and a Chapter 7 Trustee can demand those payments be returned to distribute them evenly. There are different and longer look back periods when it comes to repaying debts to "insiders" (relatives and friends) prior to filing for bankruptcy.
All of these factors explained above are very important in answering the question "will bankruptcy help me" and why a qualified and experienced San Antonio Bankruptcy Attorney is crucial in helping you not only determine "if" you should file for bankruptcy but sometimes just as importantly "when" you should file for bankruptcy in San Antonio.
DO I QUALIFY FOR BANKRUPTCY IN SAN ANTONIO?
As outlined above, the bankruptcy means test is only one factor that determines if you qualify to file for bankruptcy and under what chapter of the bankruptcy law. Debts limits also factor into it and waiting to get past asset transfer or preferential payment issues, or debts being too recently incurred are all important factors in determining not just "if" you qualify for bankruptcy, but whether and "when" you may qualify for bankruptcy. Sometimes, based on very recent events in your life, the timing of a bankruptcy filing can make all the difference in answering the question of qualifying for a certain type of bankruptcy case.
For example, it could be the situation that you might not qualify to file for a Chapter 7 case now but you would qualify in a few months, such as if you were recently laid off or fired from a high paying job and your circumstances have drastically changed. Think about it...this is one of the main reasons we have a bankruptcy law: to help people discharge debts they might have incurred at a time when their income was easily high enough to repay those debts but now it is not. Job loss, injury, illness, divorce are some of the most common reasons why people seek protection and a fresh start under the bankruptcy law in San Antonio.
WHAT TYPE OF BANKRUPTCY SHOULD I FILE IN SAN ANTONIO?
An experienced San Antonio Bankruptcy Attorney can properly advise you on which chapter of the bankruptcy law would most help you achieve the outcome you desire based on your individual situation. Putting whether you qualify for a Chapter 7 under the means test aside for the moment, you need to know about why people typically file bankruptcy in Tampa under Chapter 7 or Chapter 13 of the bankruptcy law. Only then can you identify which scenario is more closely related to yours and with the help of your bankruptcy attorney, decide the best course of action and the proper chapter of bankruptcy to file under if you are filing a bankruptcy case in San Antonio.
CHAPTER 7 BANKRUPTCY
Chapter 7 bankruptcy is what most people think of when they think of bankruptcy. It is called liquidation because when you file a Chapter 7 case in San Antonio, a Chapter 7 Bankruptcy Trustee is appointed to your case and that Chapter 7 Trustee has one job: to recover assets they can sell (liquidate) to pay your creditors. Of course they get a percentage of any assets they liquidate so they have an incentive to recover and liquidate anything the bankruptcy law under Chapter 7 allows them to liquidate.
Basically they look at what you own, deduct out whatever you own that is exempt property under the law and if there are assets you own above those allowed exemption amounts, they have the right to sell them. Sometimes your San Antonio Bankruptcy Lawyer can negotiate to pay them the difference on any "non-exempt" assets so you can keep them. This is called a buy-back agreement. Keep in mind, the Chapter 7 Trustee is also looking at other information, like the timing of any asset transfers, preferential payments and other conduct of yours prior to your bankruptcy filing, as we discussed above.
Chapter 7 is most often filed by people who are overwhelmed by "unsecured" debts. These are debts you owe where there is no collateral for the debt. This type of debt usually consists of credit card debts, medical bills, signature loans, but could also include deficiency amounts or judgments resulting from the surrender or repossession of debts that were "secured" debts, like cars and real estate.
If you have "secured" debts where there is collateral securing the debt, like car loans and mortgages on real estate, you have a choice. You can surrender the collateral in your Chapter 7 bankruptcy and give it back to the secured creditor or if you can afford to keep paying and you are current in your payments, you can keep it and continue making payments.
The advantage of a Chapter 7 bankruptcy case is that it is short, typically only open for 3 or 4 months after the filing of the case. If there a no assets for the Trustee to liquidate and distribute, you would get your Bankruptcy Discharge and the case would close shortly thereafter.
So if you are under a certain level of income under the means test, everything you own is exempt and protected and you are current on your home mortgage and car loans, Chapter 7 can help you discharge the debts you have and you can get your fresh start much faster than under Chapter 13.
CHAPTER 13 BANKRUPTCY
A Chapter 13 bankruptcy case is basically a court supervised repayment plan where you make a monthly payment to a Chapter 13 Bankruptcy Trustee for 3 to 5 years. Many of the same rules apply that apply in a Chapter 7 bankruptcy case but there is no liquidation. Instead, you pay on your debts over time either because you are behind on a secured debt and want to catch up on those payments or you have excess disposable income under the means test and can afford to pay part of your unsecured debts.
Many people file Chapter 13 bankruptcy to solve mortgage problems. It allows you to cure a mortgage default and catch up on past due mortgage payments so that you can keep your home. If you only have enough income to cover your living expenses and cure the mortgage default, you usually do not have to pay on your other unsecured debts. However, whatever income you have above what is needed to live and cover the secured loans in your plan, you have to pay that into the plan as well to go to your unsecured creditors.
The other reason people in San Antonio file for Chapter 13 bankruptcy is because they make too much income to qualify for a Chapter 7 bankruptcy and they are still better off paying creditors a percentage on the dollar of the debts they owe so that eventually they receive a discharge in bankruptcy. Chapter 13 bankruptcy cases are also used to catch up on tax debts, child support obligations and sometimes student loans.
The disadvantage of a Chapter 13 bankruptcy case is the length of time you have to be in the case. 3 or 4 months in a Chapter 7 is lot better 3 to 5 years in a Chapter 13 bankruptcy case, but it all depends on the goals you are trying to accomplish in your bankruptcy case and your individual circumstances on what is best for you to get the debt relief you need.
WHAT CAN I EXPECT IN MY SAN ANTONIO BANKRUPTCY CASE?
The answer to this question starts with a very simple question: how honest were you with your San Antonio Bankruptcy Attorney. The more your bankruptcy attorney knows, the better they can advise you. If you hide things, it's impossible for them to work around issues that may complicate your case. When in doubt, over-disclose everything to your bankruptcy lawyer. The more they know, the better you can honestly discuss the facts, the complications, the strategy and the better they can advise you in your bankruptcy case.
THE AUTOMATIC STAY
After your San Antonio Bankruptcy Attorney receives all information from you and the credit bureaus and drafts your bankruptcy petition, the case is filed with the U.S. Bankruptcy Court. The moment your San Antonio bankruptcy case is filed, the "Automatic Stay Injunction" goes into effect. This is an immediate injunction that says that creditors MUST CEASE all collection efforts against you. No more phone calls, collection letters, any lawsuits must stop and you now are under the protection of the United States Bankruptcy Court. This all important protection is one of the biggest and most immediate benefits of filing for bankruptcy. Relief from the collection efforts of creditors you have probably been living with for quite some time now stop. This is your first taste of debt freedom on the way to your fresh start once you receive your Discharge in Bankruptcy at the conclusion of your bankruptcy case.
THE MEETING OF CREDITORS
About 1 month after your bankruptcy petition is filed, you must appear at a Meeting of Creditors and meet your bankruptcy trustee and any creditors who want to attend and ask you questions relating to your bankruptcy case filing. This called a 341 meeting. Your bankruptcy trustee will ask you to verify the information you filed in your bankruptcy case again, under oath, and ask you any relevant questions they feel would lead to assets they can liquidate.
Creditors sometimes attend this initial meeting but usually only if there is an issue of fraud or something else that may be contested in your bankruptcy case. Remember, if you are honest and upfront with your bankruptcy lawyer, you will already know if a creditor is likely to attend and ask questions. Sometimes, creditors are just angry or want to harass debtors, but they are not really allowed to go very far with this type of conduct in a bankruptcy case unless they have some proof that you did something wrong. Not being able to pay the debt you owe them is not enough for them to do much to you once you file.
CHAPTER 7 TIMELINE
In a Chapter 7, the timeline depends upon whether there are any assets for the Chapter 7 Trustee to administer (sell and distribute to creditors). If not, the Bankruptcy Court will issue a Discharge of Debts in your bankruptcy case about 4 months after you filed your Chapter 7 bankruptcy case. You will still normally get you Discharge on time, even if there are assets the Chapter 7 Trustee is administering, but the case will remain open while they finish this process.
CHAPTER 13 TIMELINE
In a Chapter 13, the timeline is much longer. You will appear for your 341 meeting, just like in a Chapter 7 bankruptcy case, but then the next milestone occurs in several months, usually about 6 months. That milestone is called "Confirmation." In that 6 month period, creditors have to file "proofs of claim" and your San Antonio Bankruptcy Attorney has the chance to object to those claims, in an effort to reduce or eliminate them altogether. When this process has completed, and provided you are current in your monthly payments to the Chapter 13 Trustee, the Court will "confirm" your Chapter 13 Plan. You then continue making your monthly payments according to that "Order Confirming Plan" and when you make your final payment to the Chapter 13 Trustee, within a few months the U.S. Bankruptcy Court will note your Plan has been completed and will issue a Discharge Order in your case.
THE LEGAL EFFECT OF A BANKRUPTCY DISCHARGE
A Discharge Order in a bankruptcy case is the goal of every bankruptcy case. It is an Order that protects every debtor from being harassed or from collection efforts by creditors after the bankruptcy case has been completed and then Discharged. If a creditor ignore the Discharge Order and tries to collect, harass or sue on a discharged debt, they can be called before the U.S. Bankruptcy Court Judge in your case and be held in contempt for violating the Discharge. Many times, debtors also recover damages so it's important to log notes if this happens after your case and let your San Antonio Bankruptcy Attorney know about it. The Discharge is meant to protect you after your bankruptcy case and sometimes you have to assert it if any creditor choose to ignore this important legal Order from the U.S. Bankruptcy Court.
BANKRUPTCY IS DEBT RELIEF FOR HONEST PEOPLE IN SAN ANTONIO
Despite the best efforts of big banks and their lobbyists, the United States Bankruptcy law is still alive and well in San Antonio, Texas. It can help residents of San Antonio who are overwhelmed by debt, facing foreclosure on their home or other financial issues. With the help of an experienced San Antonio Bankruptcy Attorney to guide you through the process, it may be the best thing you ever do that you probably never wanted to do. Bankruptcy is a beginning, not an ending. The Fresh Start offered by the bankruptcy law may help you move past bad events in your life so that you can live your life in relative peace financial freedom and be a contributing member of the San Antonio community.
Below are some videos produced for United States Bankruptcy Court that may be useful in providing you more information about filing for bankruptcy in San Antonio. Enjoy them along with other bankruptcy information resources listed below.
BANKRUPTCY BASICS - PART 1: INTRODUCTION
BANKRUPTCY BASICS - PART 2: TYPES OF BANKRUPTCY
BANKRUPTCY BASICS - PART 3: LIMITS OF BANKRUPTCY
BANKRUPTCY BASICS - PART 4: FILING FOR BANKRUPTCY
BANKRUPTCY BASICS - PART 5: CREDITORS' MEETING
BANKRUPTCY BASCIS - PART 6: BANKRUPTCY CRIME
BANKRUPTCY BASICS - PART 7: COURT HEARINGS
BANKRUPTCY BASICS - PART 8: THE DISCHARGE
BANKRUPTCY BASICS - PART 9: LEGAL ASSISTANCE