Considering Bankruptcy?

Considering bankruptcy is often stressful and intimidating, we know that. However, the debt consultation attorneys at Adair & Myers, have established procedures and mechanisms to ease the evaluation process. For example, we use a list of unique Frequently Asked Questions to help our Texas clients and potential clients determine whether a Chapter 7, Chapter 11, or Chapter 13 bankruptcy is the right decision for them.

Does Bankruptcy stop foreclosure?

Yes, but only temporarily. Many debtors file bankruptcy with the hope of stopping a foreclosure action. This is effective in the short-term, but what happens to the property being foreclosed upon in the long-term can depend on several factors including the type of property that it is and the type of bankruptcy filed.

If you are considering bankruptcy to stop a foreclosure proceeding, you should consult an experienced bankruptcy attorney, like those at Adair & Myers, to examine your options and advise which scheme would work best for you.

Will bankruptcy ruin my credit?

The fact of the matter is that by the time people start thinking about bankruptcy, they are often already behind on their bills and struggling with debt. Their credit is often either already damaged or will soon deteriorate under the onslaught of creditor collection activity—even if they don't file for bankruptcy. However, there is no way around the fact that filing bankruptcy can cause a debtor's credit score to drop as much as 200 points or more. It is also true that a debtor's ability to borrow money after the bankruptcy may be damaged.

But bankruptcy also provides debtors with the opportunity to rebuild their credit—often by paying a higher interest rate. This is the so-called "fresh start" a bankruptcy can provide and is often the most positive result of bankruptcy for debtors.

What is the Automatic Stay?

For a debtor, the Automatic Stay is one of the most powerful and beneficial aspects of bankruptcy. It's like a "pause" button. From the moment a debtor files for bankruptcy, almost all collection activity must stop and creditors must stop calling and sending threatening letters. This can be a huge relief for a debtor and it provides the court-appointed trustee time to review and evaluate the debtor's financial circumstances.

However, the Automatic Stay is not impenetrable. Secured creditors will often ask the court for permission to resume collection activities, especially with regard to a particular piece of property. If you are considering bankruptcy, you should speak with an experienced bankruptcy attorney, like those at Adair & Myers, to advise you as to whether a creditor would be able to lift the Automatic Stay.

What can I keep?

A debtor in a Chapter 7 bankruptcy is allowed to "exempt" certain property from the bankruptcy administration, which will keep the property from being liquidated for the benefit of creditors. There are two lists of property that can be exempted: the Federal list and the Texas list. The debtor may choose which list to use. Most Texas debtors choose the Texas exemptions because they allow a debtor to keep more of their personal property. In fact, in Texas, typical Chapter 7 debtors can keep almost everything they own, including their house, cars, and furniture. If, on the other hand, you have assets that are not on the exemption lists, you may want to consider a Chapter 13 bankruptcy instead. Contact the offices of Adair & Myers today to arrange a free consultation.

Should I file for Bankruptcy?

Filing for bankruptcy protection is a serious decision and should be made only after a careful and deliberate analysis of your particular legal situation by a qualified legal professional. Bankruptcy protection does not come in a "one size fits all" package and your individual circumstances will dictate whether it is more beneficial to seek Chapter 7, Chapter 13 or Chapter 11 protection. Choosing the wrong bankruptcy chapter will not likely result in giving you the relief that you need and can make matters worse. For example, if you are attempting to protect your home from foreclosure or car from repossession, then a Chapter 7 bankruptcy will generally not help you, whereas a Chapter 13 will allow you to accomplish these goals.

If you're thinking about bankruptcy, you should consult a Texas bankruptcy attorney with the appropriate skill and knowledge in the field, the attorneys at Adair & Myers. Because of the increased number of bankruptcy filings in the past two years, there are many people and companies attempting to provide bankruptcy services who are simply not qualified. Inexperienced counsel can ruin the bankruptcy procedure for a debtor and even make a debtor's circumstances much worse than if no bankruptcy had been filed at all. The attorneys at Adair & Myers, have years of experience in helping both creditors and individuals in need of bankruptcy protection to navigate the perils of bankruptcy. Call today to arrange a free consultation.

What about debt defense or debt consolidation?

An increasing number of debt consolidation, debt defense, and credit repair services have arisen in recent years. Unfortunately, the majority of these services do not deliver what they promise and you end up being in just as bad of a situation as when you started their payment program. We have had innumerable clients who participated in consolidation programs with the good intent of trying to pay back their creditors. Without exception each of those clients paid hundreds, if not thousands, of dollars and received nothing for it. Furthermore, even though many of these consolidation programs tout themselves as being "non-profit" they end up taking a large percentage of what you pay as the cost of providing their services.

If you are not familiar with the laws of credit and debt, it can be very easy to be taken advantage of by promises of easy and fast solutions. The attorneys at Adair & Myers already have the experience you need. Call today for a free consultation.

What is a "Discharge"?

A discharge in bankruptcy is the order entered by a Court that relieves you of your legal liability on the debts that you owed at the time you filed for bankruptcy protection. For most debtors, it is the entire purpose for filing bankruptcy.

What's the difference between a Chapter 7 and a Chapter 13?

Simply put, Chapter 7 is a "total liquidation" of your debts whereby you receive your discharge within a matter of months. The potential downside of a Chapter 7 proceeding is that if you possess non-exempt property, that property might have to be turned over to a bankruptcy trustee. However, the property of the majority of persons filing for bankruptcy falls into the category of "exempt" property and is retained by them. While there are specific laws governing what kind of property is exempt, generally your home, car, household goods, retirement savings, and insurance policies are protected from your creditors. The exception to this is where the creditor lent you the money to purchase that property in the first place, such as your mortgage company or auto lender. The attorneys at Adair & Myers are highly experienced at analyzing what property, if any, might be at risk by a bankruptcy filing and helping you protect it to the maximum extent allowed by law.

While Chapter 7 has its advantages, it is restricted to those who make less than a certain amount of money. In order to be qualified to file for Chapter 7 relief you must pass the MEANS test, which compares what you earn to what the average family of similar size in Texas earns. The attorneys at Adair & Myers, will work with you to decipher this complex determination.

Chapter 13 is a payment plan over time where a set sum of money is paid every month for up to five years to a bankruptcy trustee and ultimately distributed to your creditors. If you stick to the plan and makes your payments, then at the end of the payment period your debt is discharged, no matter how much of the debt hasn't been paid off. The major advantage of a Chapter 13 is that it allows you time to pay back debts you are behind on, such as your house or car payment. A Chapter 13 is what you use to prevent a foreclosure or repossession. Chapter 13 can also be used to deal with tax debt or child support issues if the debtor has enough income to allow for full payment of these debts during the payment plan. In short, Chapter 13 may be what you need to give you the breathing space to get caught up.

Which option is best for a potential debtor depends on numerous factors, including the debtor's financial circumstances, what assets the debtor has, what kind of debt the debtor has, and, most importantly, what the debtor hopes to achieve by filing bankruptcy. Call Adair & Myers today to arrange to meet with one of our experienced bankruptcy attorneys to discuss how to get back on track.

Do I lose everything in Bankruptcy?

Total loss is one of the biggest myths about bankruptcy and it is not at all true. In fact, typical Chapter 7 debtors get to keep most of their property. In Texas, a debtor can almost always keep his or her home, cars, furniture, clothes, etc.

It works like this:

When a debtor files for bankruptcy, he or she is entitled to keep certain types of property. This is known as exempt property because it is exempt from collection efforts. Texas residents have a choice: they can choose the list of property exempted under Federal law or the list of property exempted under Texas law. There are significant differences between the Texas list and the Federal list. For example, Texas provides debtors with a substantial exemption for their home—the homestead exemption—which is much more generous than the Federal exemption and even those provided by other states. If, on the other hand, a debtor does not own a home, he or she might want to consider the Federal exemptions because it allows the debtor to declare a certain amount of personal property as exempt—no matter what kind of property it might be: jewelry, a boat, almost anything. This feature of the Federal exemptions is called the "wild card."

The experienced attorneys at Adair & Myers have been advising potential debtors just like you since 1972 about which scheme is appropriate for them. Call us today to schedule a free consultation.