Dallas Bankruptcy Blog

Are you are in bad financial shape and exploring the idea of filing for bankruptcy in Dallas, Texas?

Then follow these steps to ensure that your bankruptcy is settled - in the least amount of time, and with the least amount of expense and effort.

Contact a Bankruptcy Attorney

You should first contact a bankruptcy attorney who can first determine whether filing for bankruptcy is the best way out of your financial problems. If your attorney determines that it is in your best interests file, then they should guide you on the filing under the proper chapter.

Under the new Bankruptcy act, which is applicable for all bankruptcies filed on or after October 17 th, 2005, you will have to undergo credit counseling within 6 months before you can file for bankruptcy - and you will also need to complete a financial management program after your filing is complete.

This Is Not a Test

Actually, when it comes to bankruptcy, there is a test - you will need to pass the ‘means test’ or ‘median income test’, where your income and your expenses will be calculated and compared with the average in your state. If you live in Dallas, that state is Texas.

The results of those tests will determine whether you can file for bankruptcy under chapter 7, where most of your debts will be discharged, or chapter 13, where your unsecured debts, such as credit cards or unpaid medical bills, can be restructured in a more convenient way over a longer period of time.

This will require you to sit with your bankruptcy attorney and your creditors and devise a new method of repayment, and then get the plan approved by the bankruptcy court.

A trustee will be appointed by the court to make a detailed list of all your assets - and that trustee will also try to ensure that your creditors get the maximum amount that they are owed back.

At Allmand and Lee, we take the time to listen, in a non-judgmental manner, to each client’s particular case. We know sometimes bad things happen to good people. Our only goal is to get you the financial relief that you deserve.

Time Taken To Get Back On Track

If all goes well, you can expect your case to be decided in 3 to 6 months. Under chapter 13, your bankruptcy attorney will work out a 3 to 5 year repayment plan with your creditors.

If your repayment remains on schedule, then you can expect your credit rating to slowly climb up again, even as the bankruptcy remains on your record for the next 10 years.

Think Of Bankruptcy as a Second Chance

Do not feel disheartened about filing for bankruptcy; rather, think of it as getting a second chance to set things right in your financial life for both you and your loved ones.

If you know that filing for bankruptcy is your only choice, make sure you get experienced, professional representation. At Allmand and Lee, we’ve built our practice on helping people rebuild their financial lives. We can do the same for you.

Once you have filed for bankruptcy in Addison, Texas and entered into a repayment program according to the courts, then there are some things that you need to understand before you can become eligible to get a new loan.

By consulting with bankruptcy attorneys Allmand and Lee before you make the decision to file, you will have a good idea of what your financial options will be.

What to Expect

It is important to understand that once you have filed for bankruptcy in Addison, Texas, your credit rating will be affected. Unless it is very critical, we recommend that you not apply for a new loan immediately. This is because even if you do manage to get one, the loan period will also not be for very long and the terms and conditions will not be in your favor, since lenders will treat you as a high-risk borrower.

A better option would be to diligently pay off all your outstanding debts as soon as financially possible before applying for a new loan. That way, your past record and your repayment efficiency will be recorded on your credit report. A favorable credit report will ensure that you are able to get a loan at a lower rate of interest, and with the maximum period possible.

If we decide that you should file for bankruptcy under chapter 13, then you will have to first clear off all previous outstanding debts that you owe to your creditors before you can become eligible for a new loan.

Your Credit Rating

Similarly, if you file for bankruptcy under chapter 7, then you will have to wait for a period of 2 years before you will become eligible to apply for a new loan. You should use this period of time to build up your credit rating so that when you do become eligible, lenders have no hesitation in giving you a loan.

At Allmand and Lee , our clients’ financial situations usually improve drastically in the first few years after the bankruptcy filing.

After the initial 2 year period, your credit rating can only go up; and if you do manage to clear off all your past debt, then your bankruptcy will slowly be pushed towards the back of your credit record. If you have managed to make regular payments, then you could also become eligible for a new loan at regular interest rates and your credit rating will be restored.

So once you have hired us as your Addison, Texas bankruptcy attorney, and we have filed on your behalf, then you will have cleared off your debts and you will be able to successfully apply for a loan in the near future.

Once you reestablish your ability to obtain new credit, make sure that you use it wisely.

For the first time since 2005 the Northern District of Texas Bankruptcy Court had to use their en banc procedure in order to resolve a question that resulted at the enactment of BAPCA. When the law changed in 2005 under Section 1324 (b)(2) of the Bankruptcy Code the legislature replaced the words three years (36 months) when determining the unsecured creditor pool with “applicable commitment period”. This applicable commitment period is further defined in this section as either 36 months if the person is below the median income or 60 months if they’re above the median income. The case of first impression before the Court today was whether or not a person who is above the median income uses proceeds from the sale of non-exempt property to pay off the balance of his plan and receive a discharge prior to the expiration of the applicable commitment period.

The Chapter 13 Trustee argued the law was not merely a mathematical formula but it actually imposed a time restraint on the debtor in which they had to be in Bankruptcy for their applicable commitment period of time no matter whether or not they had fully funded the plan. In essence his argument is it’s not just a mathematical component but in fact a temporal requirement of Bankruptcy law. He further argued if a person is able to fully fund their plan and pay off early they would have to first petition the Court for a Motion to Modify in order to change the time requirement as noted in Section 1329 (b). This section states the person may file a Motion to Modify to reduce the period of time that is in their previously confirmed plan. Unfortunately the trustee’s argument is essentially the time requirement is mandatory and cannot be changed. That is, if you’re above median income you are required to remain in Bankruptcy for 5 years-no matter when you’re able to fund your plan. He additionally argued if the Debtors want to shorten the time according to section 1329 (a)(2), which states a person may move to modify the plan to either lengthen or shorten the plan duration.

Debtors attorneys argue the temporal requirement alleged by the trustee was not in fact temporal at all but was merely a mathematical formula used to determine the entire amount needed to pay the unsecured creditors, the plan was a contract, and once that contract was fully performed on behalf of the debtor then he is then to receive a discharge. The debtor’s attorney argued that because section 1325 (b)( 4) specifically states the applicable commitment period is for the purposes of that section only and does not have the power or the purpose of modifying any other section of the Bankruptcy Code.

The trustee was essentially arguing because the time requirement is mandatory and cannot be changed, the only way a debtor may be successful in reducing the length of their time to pay is if the trustee and creditors do not object. This of course would violate the adversarial process that is the heart of our American jurisprudence. Essentially you’d be filing a Motion with the Court in which you had absolutely no chance of winning despite the laws and facts if the opposing parties simply objected. This would require everybody to have an Agreed Order in order to succeed in that Motion. The real implications is if a person funds their plan based on the 60 month disposable income projection, they’re given the amount and that’s how much is needed to pay their unsecured creditors, and at a later date they elect to sell non-exempt property they had at the time the plan was created and was accounted for in the UCP. If they receive enough money which allows them to fully fund the plan, under the trustee’s argument the debtor would still be required to be in Bankruptcy for the remaining years and expose themselves to the potential liability of increased income. If their income increased, a Motion to modify could be filed to increase the amount of funds needed above and beyond the agreed amount.

Of course this would have a chilling effect on all debtors essentially preventing anyone from paying off their plan early. Instead they may sell their non-exempt property and simply keep it as cash on hand or use it to buy other property. With the 35% completion rate on Chapter 13 case, this would be detrimental to future success.

The Court was concerned mainly with two issues: whether the person could simply pay off with as little as one payment and which would be in essence buying a “super discharge” of Chapter 13 or would they have to file a Motion under 1329. Their main concern seemed to be reconciling section 1329(b) with Section 1325(a)(2). However, it remains unclear as to how to resolve this issue. The judges may not reach a unanimous decision. If they don’t, under their own procedural rules, the decision will return to the Court of the judge originally hearing the case and he alone will make the ruling.

Below are the briefs that pertain to this matter:

1. Amicus Brief
2. Appendix for Brief in Opposition
3. Brief in Opposition of Debtor
4. Brief in Support of Debtor
5. Nacba Amicus Brief

If you are thinking about filing for bankruptcy in the DFW area, then there are some points to ponder while doing so.

Even though the new bankruptcy laws have made it difficult to file for a Chapter 7 bankruptcy, it is still possible to do so if you pass a few tests.

Filing for Bankruptcy Is Not the End of the World

It just means that you have realized that you are ready to make a fresh financial start. Your credit rating will come down, but it does not mean that you can never take a loan for the rest of your life.

If you do not wish to tell your friends, relatives or even your employer about your bankruptcy, then chances are that they will never find out.

Filing bankruptcy doesn’t mean that you are unsuccessful or that you are a bad person. Rather, it means that you have the fortitude to make the decision to improve your life and those of your loved ones.

Contact a Knowledgeable Bankruptcy Attorney

You should contact an experienced and knowledgeable bankruptcy attorney who will be able to guide you on whether to file your bankruptcy under chapter 7, 11 or 13.

Under the new laws that came into effect in 2005, it is now quite difficult to file bankruptcy under Chapter 7. Filing Chapter 7 essentially means that a chunk of your debt can be discharged, provided you pass the ‘means test’ or the ‘median income test’.

If your bankruptcy attorney determines that you are eligible to file under Chapter 13, then they can work out repayment details along with your creditors. This repayment schedule could last anywhere from 3 to 5 years, provided the plan gets approval from the court.

Filing under Chapter 13 can give you a breather - and help you pay off your old debts in a way that won’t sink your financial ship.

What Happens After I File?

It might take around 3 to 4 months for the court to come to a decision once you have filed for bankruptcy. An efficient bankruptcy attorney can ensure that you do not have to visit the bankruptcy courtroom in person – which in and of itself can be very stressful - and they can take care of all the required paperwork.

Your credit rating will be wiped clean once you file for bankruptcy. But by repaying your debts on time, you can ensure that your credit rating makes a comeback, and you can soon be eligible for a loan.

Some of your old IRS taxes could also be discharged when you file for bankruptcy depending on your particular situation.

If you have student loans, then some of them may not be discharged when you file for bankruptcy. However, your creditors will have to stop calling you and will not be allowed to harass you for overdue payments once your bankruptcy attorney has filed on your behalf.

So instead of listening to rumors, get the advice of an experienced advocate that you can trust. Bankruptcy attorney Allmand and Lee stand ready with a combined 20 years of experience to help you file for bankruptcy, so that you can get out of your financial quagmire and start a new phase in your life.

Although you may think that any bankruptcy lawyer is good enough to handle your case, this is not always true. There are certain qualities that can give a particular lawyer an advantage when handling your case and a better chance for you to have a successful bankruptcy. Below are the six best qualities that you should look for when deciding which bankruptcy lawyer should represent you.

• Experience – Your bankruptcy lawyer should have plenty of experience filing for consumer bankruptcy. Even better is if you can hire a lawyer who specializes in consumer bankruptcies. Sometimes the bankruptcy process can get complicated when you have creditors who try to fight it or a judge who wants to deny it; you need someone who has faced these challenges before to help you overcome these obstacles.
• Reputation – Your bankruptcy lawyer should also have a good reputation for being fair and honest. You want someone who is going to help you win your claim without being dishonest. You also want someone who is going to be straight forward with you about the situation and who won’t make promises that they can’t keep.
• Track Record – When looking for your bankruptcy lawyer, it is important that they not only have experience taking on bankruptcy cases, but that they have experience winning them too. You have one shot to get your bankruptcy discharged, so you want to give it your all and don’t want to be disappointed by a dismissal.
• Support – You also want someone who is going to stand beside you and support you throughout the process. You want someone who is going to do what they can to make sure that you understand what is happening every step of the way and who will be there to answer any questions that you may have during the process.
• Understanding – A good bankruptcy lawyer will also show understanding with his clients. He won’t act rude or disrespectful when they call unexpectedly with a question or concern and he won’t make them feel bad for being in this situation in the first place.
• Willingness to Listen – Lastly, you want to hire a bankruptcy lawyer who will listen to you and your concerns and make you feel comfortable with the bankruptcy process.

These qualities are important because you want someone who can get your bankruptcy successfully discharged and who also treats his clients with the respect that they deserve. By seeking out a bankruptcy lawyer who possesses most, if not all, of these attributes, you will be more likely to have a successful bankruptcy discharge that is stress-free for you.

Once you have filed for bankruptcy, then certain rules have to be followed before you can file for another one.

There are generally 2 chapters under which you can file a personal bankruptcy - and depending on the chapter (7 or 13) that you initially filed under, you can file for another bankruptcy if the need arises.

Given below are 2 of the most common chapters under which you can file your bankruptcy, and the time periods that must elapse before you can file for bankruptcy again.

Filing under Chapter 7

 Most people file for bankruptcy under chapter 7, since it allows you to liquidate your unsecured debts, such as credit cards or hospital bills. In this case, a trustee is appointed by the court who will then dispose of all your non-exempt assets to pay off all your debt.

So, if you have limited non-exempt assets, then this is a quick way of getting out of the debt trap.

Many types of taxes, student loans or child support claims can be disposed of faster under chapter 7 laws. If you manage to get your creditors to sign a reaffirmation agreement, then you can continue to pay your car or home mortgage loans while still retaining possession of your assets.

However, depending on your case and the amount of your outstanding debt, you could still lose a substantial part of your assets. That said, filing under chapter 7 can provide you with a fresh start in just a few months, compared to filing under chapter 13.

If you have been granted a chapter 7 discharge, or completed a chapter 13 bankruptcy plan in the last 8 years, then you cannot file for another bankruptcy under chapter 7.

If you manage to get a discharge under chapter 7, then you will have to wait another 6 years before you can get a discharge from a chapter 13 bankruptcy.

Filing under Chapter 13

If you are still employed and receiving regular salary, or are receiving business income on a regular basis, then filing for bankruptcy under Chapter 13 will give you a chance to repay your old debts within a 5 year period. You will also be able to retain your assets.

A repayment plan will need to be worked out between you, your creditors and your bankruptcy attorney. It will need to be approved by the bankruptcy court.

After your bankruptcy attorney submits the written repayment plan, the court will appoint a trustee, who will then collect the monthly payments and hand it over to your creditors.

This process has to start within 45 days after you have filed for bankruptcy under Chapter 13. You will need to strictly follow the repayment plan. If you do that, then you can get a ‘discharge’ at the end of the repayment period.

Even if your creditors do not approve your repayment plan, you can still go through with it, provided the court is satisfied with the plan. Your creditors however, can file an appeal if they do not agree with the plan. This is where it pays to have a good, knowledgeable bankruptcy attorney.

Your case can be discharged every 2 years if you have filed under Chapter 13. If you get a discharge under Chapter 13, then you will need to wait another 4 years to get a discharge from a Chapter 7 filing.

Generally, there is no limit to the number of times that you can file for bankruptcy; but it all depends on the number of times you have received a discharge from your case.