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HOW OFTEN CAN I FILE BANKRUPTCY?
Anyone who has received a Chapter 7 discharge cannot file another Chapter 7 for 8 years. However, you may convert to a Chapter 7 if you are currently in a Chapter 13.
WHERE IS MY BANKRUPTCY FILED?
In the office of the Clerk of the United States Bankruptcy Court District where you have lived or maintained your principal place of business for a majority of the past 180 days. The bankruptcy court is associated with the United States District Court. Each county in Texas is assigned to a particular federal district.
DO A HUSBAND AND A WIFE HAVE TO FILE TOGETHER?
A husband and wife do not have to file together, but a husband and wife should file together when they both owe some of the same debts. If one spouse files alone, creditors may try to force the other spouse into paying them, even if they are unemployed.
WHEN SHOULD I FILE BANKRUPTCY? That depends on you and your particular situation. You may choose to wait to file bankruptcy if you are likely to incur sizable new debts in the near future. For example, if you are in bad health and have huge medical bills, you may choose to wait until the illness is cured. It will do you little good to discharge $10,000 in medical bills now and then incur another $10,000 in the next few months. You may choose to wait a few months and discharge all of them. Also, under bankruptcy law all nonexempt property that becomes yours through inheritance or divorce within 6 months after the date that you file must be turned over to the court for liquidation. So, if you anticipate acquiring any money or property, you may choose to wait to file. I usually tell people that the right time is when they have reached the end of their rope with collection activities.
HOW DOES FILING BANKRUPTCY AFFECT LAWSUITS AND ATTACHMENTS THAT HAVE ALREADY BEEN FILED AGAINST ME?
Filing bankruptcy will automatically stop all lawsuits and attachments against you. Your creditors must stop all actions against you immediately after a bankruptcy is filed. The only cases not affected are criminal cases and those to collect debts for alimony, maintenance or child support.
WHEN WILL I GO TO COURT AND WHAT WILL I DO THERE?
You are required to appear in court one time for what is called the First Meeting of the Creditors. This will occur about 30 days after your case is filed. The trustee will ask you questions concerning your bankruptcy papers and assets. Few, if any, of your creditors will appear. You will be required to provide for inspection documents such as bank statements and copies of property appraisals. This meeting usually takes less than 20 minutes.
WHAT IS A TRUSTEE IN BANKRUPTCY?
The trustee is an officer of the court, usually a practicing attorney, appointed by the bankruptcy court. His or her primary duty is to gather your non-exempt property, turn it into cash, and pay this money to your creditors. You are required by law to cooperate with the trustee. If you refuse to cooperate, your discharge may be denied.
WHAT ASSETS CAN I KEEP?
Both the federal government and the State of Texas have passed laws defining what assets are exempt. Generally, the statutes are: State of Texas Homestead, subject to purchase money or improvement liens thereon, consisting of a lot or lots not exceeding ten acres of land, if located in town, or 200 acres if located in a rural area. Personal property having a value of not in excess of $30,000 for a single person or $60,000 for a family comprised of the following items: - Household furnishings
- Tools of the trade, including a work vehicle
- Clothing
- Two firearms and sporting equipment
- A passenger car or light truck for each licensed driver in the household
- Cash surrender value of life insurance policies
- Current wages
- Household pets and certain livestock
Federal - (Double the amount for a married couple)
- $20200 in value in real or personal property used as a residence
- A vehicle up to $3225 in value
- Up to $9550 in value of household furnishings or wearing apparel
- Up to $1225 in jewelry held for personal use
- Up to $1850 in tools of the trade
- Any unmatured life insurance contract on the debtor
- The right to receive certain support and disability payments
- Any property selected by the debtor in any amount not exceeding $925 plus any unused amount of the $20200 listed about up to $10100, including income tax refunds. This is called the wildcard exemption.
You cannot use both exemption statutes. The use of the Federal statute is the most advantageous for those without homesteads. The Texas statutes are most beneficial for those with substantial equity in their homesteads. The choice is yours and your attorney will provide you with specific information as to which is more favorable to you. One of my goals as your attorney is to protect as much, if not all, of your property from liquidation.
WHAT HAPPENS IF MY CASE CONTAINS NON-EXEMPT ASSETS?
If your case involves non-exempt assets, the trustee will immediately begin to collect all of your non-exempt property. Your creditors may file claims to be approved by the court. The trustee will liquidate these assets and pay your creditors' claims.
WHAT WILL HAPPEN IF THERE IS NO MONEY OR PROPERTY TO TURN OVER TO THE TRUSTEE?
If you have no money or property of a value over the exemption allowed by law, your case will be considered a "no asset" case. It will probably be closed shortly after the creditor's meeting.
WHAT IS A DISCHARGE IN BANKRUPTCY?
It is a court order that enjoins your creditors from attempting to collect their debt.
WHAT DEBTS ARE NOT DISCHARGED IN BANKRUPTCY?
Debts that are not discharged include: - Most taxes. (There are some exceptions to this rule.)
- If the bankruptcy court so rules, debts for obtaining money, property, services or any extension, renewal or refinancing of credit by means of false pretenses, fraud or a false financial statement used with intent to deceive.
- Debts not listed on your bankruptcy papers, unless the creditor has actual knowledge of the case in time to file a claim.
- If the bankruptcy court so rules, debts for fraud, embezzlement, or larceny.
- Debts arising from domestic support obligations including child support, alimony, or any other obligation arising from a domestic relations court.
- If the bankruptcy court so rules, debts for intentional injury.
- Debts for certain fines and penalties payable to government units.
- Debts for student loans unless not discharging the debts would impose an undue hardship on the debtor.
- Debts involving drunk driving accident.
HOW DOES FILING BANKRUPTCY AFFECT MY CREDIT RATING?
The fact that you have filed bankruptcy will remain in your credit file for 10 years. It will not keep you from acquiring credit in less time but may make it more difficult.
WILL NEWS OF MY BANKRUPTCY BE PUBLISHED?
Your bankruptcy papers become public records and may be published by some credit reporting agencies. Most newspapers do not report consumer bankruptcy unless you are a public person.
NOTE: THE INFORMATION HERE IS NOT EXHAUSTIVE AND YOUR CASE MAY BE DIFFERENT. NONE OF THIS INFORMATION IS INTENDED AS LEGAL ADVICE. IT IS ONLY INTENDED TO MAKE YOU AWARE OF THE LAW.
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