PHAM & CLOVES, PLLC

Bankruptcy - An Alternative To Stop Bank & Tax Foreclosures

In today distressed economic condition, families are struggling to make sufficient income to pay for mortgages and other necessities.  Despite the recent capital injections by the federal government into the U.S. financial system, banks are still not lending to one another, affecting consumers nationwide.  As such, the traditional methods to secure one’s home in acquiring additional loans, such as a home equity line of credit (HELOC) or obtain refiancing, are no longer viable.  Consequently, homes across America are being foreclosed at an unprecedented rate.  Alternatively, bankruptcy has become one of the few viable options to stop foreclosure, especially when there is equity in the property.  By filing bankcruptcy, homeowners (consumer) may have sufficient time to reorganize their finances, secure a job, or to obtain additional finance.  The Houston Real Estate Foreclosure Attorneys and the Houston Bankruptcy Filing Lawyers at Veritas Legal Group are ready to assist you in this difficulty period.  Please contact one of our Houston Real Estate Attorneys or our Houson Bankruptcy Lawyers for a personal consultation at 832-484-9015.

For consumers, bankruptcy comes in two types, Chapter 7 bankruptcy and Chapter 13 bankruptcy. A Chapter 7 bankruptcy involves liquidation of all the debtor’s non-exempt assets with payment to creditors and forgiveness of all debt not addressed by the liquidation process. The fact is most individuals who file a Chapter 7 bankruptcy do not have much, if any, non-exempt assets to liquidate. As such, for most Chapter 7 filers, the result is simply a forgiveness of all debt (aside from debt in the forms of taxes, some school loans, child support, alimony and fines). A Chapter 7 bankruptcy will stay on your record for 10 years after discharge.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is not a complete forgiveness of debt, but more like a payment plan. The bankruptcy trustee decides on what your available resources are in order to determine which creditors are paid and how much the repayment will be. Once the Chapter 13 petition is filed, the trustee is appointed. The trustee will collect funds from the debtor and disburse them to the creditors. The Chapter 13 petition must include: schedules of assets and liabilities; a schedule of current income and expenditures; a schedule of executory contracts and unexpired leases; and
a statement of financial affairs.

Chapter 7 Bankkruptcy

Chapter 7 bankruptcy filings include: a listing of all creditors including the amount and nature of their claims; the amount, frequency and source of the debtor’s income; a listing of all of the debtor’s property; and a list of the debtor’s monthly living expenses. Upon the filing of a Chapter 7 petition, collection efforts against the debtor are stayed, including any arbitrations or lawsuits associated with the collection of debt.

A short time after the Chapter 7 petition is filed a meeting with the trustee is scheduled wherein creditors have an opportunity to ask the debtor questions about his financial affairs. The trustee conducts the meeting; and, generally, no creditors show up. The trustee may require certain documents from the debtor in addition to the ones filed with the court. The debtor’s testimony is under oath with penalties for perjury attached.

In cases where a Chapter 7 filer wants to keep his car, the car must be listed as an asset with associated debt in the petition. However, the debtor can enter into a “reaffirmation agreement” with the lender wherein the debtor promises to pay the note and can then keep the car.

If you have questions about what bankruptcy can do for you, contact a Houston Bankruptcy Attorney or a Spring Real Estate Foreclosure Lawyer at Veritas Legal Group at 832-484-9015 to schedule a consultation via online inquiry. Because of the new rules now affecting bankruptcy filings, it is important to find out how bankruptcy can affect you.