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Texas Bankruptcy Filing Information

This page is a continuation of another important Article Regarding Filing Bankruptcy in Texas.

Chapter 13 Bankruptcy Requirements
If you will be filing Chapter 13, a repayment plan is required to be submitted along with bankruptcy paperwork. Once reasonable expenses are allowed to have been paid, the amount of money left over is analyzed for the ability to make payment toward creditor bills. This amount of money would be divvied out according to priority claims (like taxes along with back alimony and child support) which must be fully paid; any unsecured debts (such as credit cards or medical bills) typically come next and usually are only partially paid. Depending on specific judgement amounts that have been awarded or obtained in your case, debts that are unsecured may be paid off at rates commonly around 10 cents/dollar.

Additionally, repayment plans that are submitted must also fit into three more criteria including the following:
1) The repayment plan must be delivered in good faith such that it is reasonably understood that it reflects the true and correct financial situation and reflects true intent to pay according to plan.
2) Creditors which are unsecured need to be paid a minimum amount that coincides with amounts that would have been paid in the case of a Chapter 7 Bankruptcy filing. Typically this value refers to nonexempt assets and property which you own (Refer to Texas bankruptcy exemptions).
3) Any and all disposable monetary income is required to be paid towards the plan for a minimum of at least 3 years (although in some cases it may required as many as 5 years in order for your situation to comply with the minimum dollar amounts to match amounts paid in a Chapter Seven Bankruptcy).

If you’ve filed Bankruptcy under Chapter 13 already, plan payments begin right away and generally payments are withdrawn directly out of wages or according to plans and procedures worked out with your attorney. Remember that our attorneys are here to help you. So don’t hesitate to contact us.

Obtaining an Automatic Stay for Bankruptcy
After you’ve filed bankruptcy paperwork with the court, immediately a specific order goes into place called an automatic stay. This bankruptcy provision keeps and prohibits creditors to contact you directly or to stake any type of claim on any of your assets, possessions or property immediately upon filing. This stops foreclosure proceedings as well. And in the case where you’ve filed Bankruptcy under Section Chapter 13, plan payments also begin immediately.

Your Trustee for Bankruptcy
When you file, the courts assume control legally of your unpaid debts as well as your property which doesn’t fall into protected assets in Texas bankruptcy exemptions. Trustee is used to refer to the officer prescribed and ordered by the court to your bankruptcy case. The specific job of trustees is making sure that your personal creditors get paid the most possible legal amount for their legal debts to you. This is the person assigned by the court to review paperwork, repayment plans, assess any assets, possessions, debts, equity, and also to review any protected assets for accuracy and truthfulness. The trustee can also challenge anything at all in your bankruptcy case that is deemed by them to be necessary.

Texas 341 Meeting with Creditors
About a month past filing, the bankruptcy trustee calls a 1st meeting with creditors, which proceeding is called the § 341 meeting, and the debtor–you–must attend along with any creditors who choose to be present. In this meeting which is named for the corresponding portion in the court’s legal bankruptcy code, creditors typically do not ever attend; instead, a trustee will typically be the only one present in addition to you and your attorney. Creditors do sometimes attend Chapter 13 bankruptcy meetings, especially in cases where they want to ascertain and assure that all questions to the legitimacy and reasonableness of the repayment plan are addressed. Any objections typically will be resolved through negotiation with the debtor’s legal counsel for bankruptcy present along with creditors and the trustee present in some cases. When compromises are not reached straightaway, judges intervene.

The meeting with creditors usually lasts 5 minutes. You’ll get notice for the location where the meeting will be held, and your attorney will also help with this; however, if you want to be sure about it, you can contact court staff to check addresses, times, and other details. Usually Chapter 7 bankruptcy filings don’t involve un-exempt property or possessions, but in the case which you’ve applied for Chapter 7 bankruptcy with non-exempt property, you’ll need to hand over such non-exempt possessions (or in some cases the associated FMV (fair market price or value) in the form of cash) to the bankruptcy trustee following the meeting. The bankruptcy trustee then sells these assets, distributing proceeds to creditors. In cases where the property is not worth a large amount and/or may be difficult or cumbersome to put up for sale, trustees often decide to return such property to you. Additionally, trustees along with creditors are allowed SIXTY days for challenging debtors’ discharge rights. In cases where no challenges exist, you’ll receive notice (from the bankruptcy court) that dischargeable personal debts have properly and legally been discharged after a period of about 3-6 months.

Chapter 13 Bankruptcy Plan Confirmation
In cases where you specifically filed Chapter 13  Bankruptcy, a hearing must be attended in front of a bankruptcy judge that has power to confirm/deny/request more information regarding your specific repayment plan. In most cases where your plan is confirmed right away, and your payments are properly made, the debt balances exceeding the amounts you pay in the repayment plan are discharged. In some cases, the full amount is paid in this repayment and the main benefit of the Chapter 13 bankruptcy is in the protection and legal requirement of creditors to allow for specific times and dates for repayment.

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