Frequently Asked Questions About Bankruptcy

 

1.  What should I expect at the initial consultation? 

 

At the initial consultation, I review a person’s financial situation to determine if he/she can file a Chapter 7/13 bankruptcy, if he/she should file a Chapter 7/13 bankruptcy and what issues may cause a trustee to object to his/her bankruptcy.  I also want to determine if the debtor has any property which may not be exempted in the bankruptcy. 

 

2.         What should I bring? 

 

A general list of all debts and assets (house, land, vehicles)

For secured debts(debts with collateral), know the full balance owed, the monthly payment and the estimated value  

If employed, (or if your spouse is employed), please bring a couple of months of paystubs.  If not employed, please know the average monthly gross and net income for the household

 

3.         How long will the initial consultation take?

 

            Please plan on 1 hour.

 

4.         Will I be expected to pay anything or sign a contract?

 

            No.  If I determine that you are eligible to file a Chapter 7 (meeting all legal requirements) AND if I determine that filing a Chapter 7 bankruptcy would be in your best interest, I will quote you a fee for what I would charge to complete and file your bankruptcy.  I will also tell you how much is required as a retainer and explain how my legal agreement and payment plan works.  Whether you file bankruptcy or choose to hire me is completely your decision.  Some clients prefer to pay a retainer immediately and get started on the process, while others prefer to think it over and reschedule.

 

5.         Will I be required to pay for the bankruptcy in full before I file?

 

           Yes, for Chapter 7 bankruptcies.  Otherwise, I would become a creditor.  However, I do not expect my clients to be able to pay in full when they sign the contract.  I work with each client’s individual situation and let clients develop a payment plan that works with their budget.

 

6.         If I can’t afford my bills, how can I afford to pay an attorney?

 

Once a client decides to file a Chapter 7 bankruptcy (and I have determined that the client can file) the client stops paying towards all unsecured debts or any debts that will be discharged in the bankruptcy.  Stopping these payments usually frees up some income that may be diverted toward the bankruptcy fees.

 

7.         What happens while I am paying towards my bankruptcy?

 

As soon as my clients have paid a retainer, I am their attorney and I field collection agency calls for them.  I also provide my clients with an instructional video to help in completing all the necessary paperwork, and if necessary, I also help my clients complete the paperwork by answering questions by phone, by email or in person.  Unlike with some bankruptcy attorneys, I do NOT charge extra fees to answer my clients’ questions throughout the process.

 

8.         How long does a Chapter 7 Bankruptcy take? 

 

            From the date of filing, a Chapter 7 Bankruptcy, with no non-exempt assets, objections or issues, takes about 3 and a half to 4 months.

 

            From the date of filing, a Chapter 13 may take 36 to 60 months (3 to 5 years).

 

9.         Will I be required to go to court?

 

            Normally, but due to COVID-19, hearings are currently being held by telephone.  You will be required to attend an informal hearing (now by phone), known as the 341 First Meeting of Creditors, which takes place in front of a trustee assigned to your case.  The average Chapter 7 Bankruptcy hearing takes about 5 minutes (the average Chapter 13 takes about 12 minutes) , and it is usually a simple process of verifying the information you provided in your schedules.  It is nothing to be nervous about, and I sit next to my clients during the hearing providing any help or guidance they might need.  The Chapter 7 341 hearings take place in room 333 of the US Post Office and Federal Court Building located at 615 E. Houston Street, San Antonio, Texas 78205. 

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10.       Will I lose any property when I file bankruptcy?

 

            It depends on what you own and whether your property is protected by exemptions.  After assessing a client’s assets, I can usually determine if he/she would be in danger of losing anything in the bankruptcy.  There are two types of exemptions, state and federal, which usually work to protect most, if not all, of a client’s property.  Many factors have to be considered.  For example, depending on the value, the date of purchase and the equity, a client is usually allowed to exempt one homestead property.

 

11.       Can I pick and choose what I include in the bankruptcy?

 

            No, bankruptcy is based on full disclosure of all income, debt and assets, which means ALL creditors must be listed.  On secured items, you may choose to keep or surrender the collateral.  If you choose to keep the collateral, you will continue to pay for the item,  You may enter into a reaffirmation agreement, or redeem the item for the fair market value.  If you surrender the collateral, you would not be responsible for any more payments or any deficiencies.  For unsecured debt, you have to list every debt that you owe, whether it is dischargeable or not.  You may keep and continue to use a debit card.

 

12.       Is it better to do a debt consolidation plan than file a bankruptcy?

 

            Probably not.  The problem with a debt consolidation plan is that the process is equally damaging to a credit score, while not providing the full relief from the debt which one receives from a Chapter 7 Bankruptcy.  The debt-consolidation process is also longer with no set date of closure.  My clients who filed a Chapter 7 Bankruptcy are usually already on the way to rebuilding their credit while a person in debt consolidation is still struggling to pay unsecured debt and sitting on bad credit.