DALLAS CHAPTER 13 BANKRUPTCY ATTORNEY: Debtors in Chapter 13 bankruptcy file a repayment plan with the Court that states which creditors will be repaid and the terms of the repayment. The plan is reviewed by the Trustee and the creditors who may or may not file an objection to confirmation of the plan. Objections to confirmation ask the bankruptcy judge to not approve the Chapter 13 plan. Usually these objections are filed because the Trustee believes that the plan doesn’t meet the requirements of the Bankruptcy Code or the creditors don’t like their treatment in the plan. Objections to confirmation can be resolved by a hearing in front of a bankruptcy judge but usually they are resolved by agreement before the hearing. Once all of the objections to confirmation are resolved, assuming the plan meets the other requirements of confirmation, such as the debtor having paid all payments due under the plan at the time of confirmation, the bankruptcy judge will sign an order confirming the plan. Confirmation makes the plan an order of the court rather than just a proposal of reorganization of debts by the debtor. A confirmed plan changes the creditor’s rights and sets forth what the debtor must do in order to receive a discharge in the bankruptcy case.
Category Archives: Bankruptcy Code
Dallas Bankruptcy Attorney: BANKRUPTCY NOT LIMITED TO INDIVIDUALS AND BUSINESSES
We all know the economy is struggling right now. Unemployment is high and the stock market and real estate market are on the decline. But the economy doesn’t affect just individuals and businesses. City governments are struggling financially too.
Drowning in debt and unable to seek concessions from city employees, the struggling Rhode Island city of Central Falls filed for bankruptcy Monday. The city, north of Providence, has a population of 19,000 living in roughly a square mile.
It isn’t alone in seeking court protection. In March, Idaho’s Boise County filed for Chapter 9 protection after it was found in violation of a federal law and ordered to pay $6.2 million to a housing developer. Central Falls took the step after it was unsuccessful in asking police and firefighter retirees to give up 50% of their pension.
“In the end, we were left with no practical option,” said former State Supreme Court Judge Robert Flanders who has overseen the city’s finances. “We cut city services to the bone, we raised taxes to the maximum allowable, we negotiated with Council 94 and fire and police unions without success,” he explained. “We needed cooperation and monetary agreements from all sides to make this work,” Flanders said. “That didn’t happen, and so that’s why we’re all here today.”
Without the filing, it projected a deficit of $5.6 million by next June — based on $22 million in expenses and $16.4 million in projected revenue.
(Source: cnn.com)
TEXAS BANKRUPTCY: IS MY BANK ACCOUNT PART OF THE BANKRUPTCY ESTATE?
In many Dallas bankruptcy cases there is confusion about whether money in a bank account is part of the bankruptcy estate. For bankruptcy purposes, money in a bank account is part of your bankruptcy estate if the money in the account is your money. Just because your name is on a bank account doesn’t necessarily mean that the money in the account is part of the bankruptcy estate. For example, if you are listed as a signer on an account but do not have an ownership interest in the account or the money in the account, then the account and the money are not part of the bankruptcy estate. This is often done in cases where a debtor is added as a signer on an account owned by an elderly family member, so that they can help them with their finances. Similarly, if you share title to an account with another person, and the money in the account was deposited by the other person with no intent to transfer ownership to you, then you must list the account itself in the bankruptcy estate but the portion of the balance that belongs to the other person is not part of the estate. In this type of situation you may be required to provide proof to the Trustee that the money in the account is not your property.
TEXAS BANKRUPTCY: YOU DON’T HAVE TO BE INSOLVENT
I received an email from a client recently asking if she needed to be “broke” before filing bankruptcy. I have never been asked this question before, and I am surprised, because it is a very good question. The Bankruptcy Code doesn’t require you to be insolvent in order to be eligible to file bankruptcy. Actually, the opposite is true. The Code allows you to select exemptions which can be used to protect your property. These exemptions may protect equity in your house, your cars, household goods, retirement accounts, and many other types of assets. You may even be able to protect the money in your bank accounts.
Because of your ability to exempt property in bankruptcy, you should consider filing bankruptcy earlier than later. What I mean is, the moment you realize that you are not going to be able to repay your debt you should stop making payments to your unsecured creditors (credit cards, unsecured personal loans, etc.) and contact a bankruptcy attorney. If you continue to make payments to these creditors you are throwing your money away. You don’t have to keep making payments until you have no more money left before filing bankruptcy. In most situations a bankruptcy attorney can protect your property from liquidation and still get you relief from your debt.
BANKRUPTCY: CREDIT COUNSELING AND DEBTOR EDUCATION
The Bankruptcy Code requires that all individuals filing bankruptcy receive credit counseling before their case is filed. Credit counseling must be provided by an agency approved by the Department of Justice’s U.S. Trustee Program. These agencies will charge a fee of around $50. Upon completion of the course, debtors receive a certificate of completion. This certificate has to be filed with the bankruptcy documents and must have been issued within 180 days before the bankruptcy filing. If the certificate is dated after the date the case is filed or more than 180 days before the filing date, the court will dismiss your bankruptcy case.
The Bankruptcy Code also requires that debtors take a debtor education course. This course is completed after the bankruptcy case is filed and upon completion of the course debtors will receive a certificate of completion. In chapter 7 cases, debtors must file the certificate within 45 days following their 341 meeting of creditors. In chapter 13 cases the certificate must be filed before the debtors complete their chapter 13 plan and receive a discharge. In both chapters, failure to file the debtor education certificate will prevent debtors from receiving a discharge of their debts.