Bernard E Brooks L.C.

Bernard E. Brooks L.C.

Bankruptcy Frequently Asked Questions (FAQ'S)

Can I have a bank account after I file bankruptcy?
Answer: Yes. Every Debtor is entitled to have a bank account prior to, during and after the filing of the Bankruptcy. The money you have in your bank account is an asset just like any other property you own and becomes part of your bankruptcy estate upon the filing of your bankruptcy case. It is the amount of money that you have in the bank on the date you file your bankruptcy that is important.
Will I have to go to court after I file for bankruptcy?

Answer: Every debtor has to personally attend what is referred to as a 341 creditors meeting. This meeting usually takes place approximately 4-6 weeks after the bankruptcy case is filed.
If I have a lawsuit for personal injuries I suffered in an accident what will happen to my claim for injuries.

Answer: Your claim for damages for the injuries you suffered is an asset and must be disclosed in your bankruptcy irrespective of whether or not you have filed a lawsuit on this claim. Depending upon the nature of your claim the Trustee named to administer your bankruptcy may take over this claim.
I have a boat and some other property that my non-bankruptcy attorney is not exempt. Can I transfer this property to my friend or relative to hold it for me and then file bankruptcy?

Answer: All transfers of property within one (1) year of the commencement of your bankruptcy case must be disclosed. Since you did not receive a fair equivalent value for this transfer the bankruptcy trustee in your case could have the transfer set aside and the boat or other non-exempt property turned over to the trustee.
I am recently married does my new spouse have to file bankruptcy with me when I file for bankruptcy?

Answer: No. A debtor who is married can file for bankruptcy protection just in his or her name without the joinder of the other spouse. However, all community property owned by both spouses must be listed and included on the bankruptcy schedules at the time the bankruptcy case is filed. Before making this decision you must look carefully to determine if your spouse may be liable for any of the debts you are listing in your bankruptcy.
I own a house and car will the trustee take this property away from me when I file bankruptcy? Answer: No. In most cases the loans on your house and car will be classified as secured debts. In Texas your home, if it is your homestead, can only be taken away for taxes, purchase money and loans for improvements made to the home. If you live in the city the number of acres can not exceed ten (10) acres. If you live in a rural area you can have as much as 200 acres exempted from sale. At present there is no cap on the fair market value of your home that is exempted from sale. As long as the equity in your car does not exceed $30,000.00, along with your other personal property, it cannot be seized by the bankruptcy trustee.
Can a creditor object to the discharge granted a Debtor by the bankruptcy court?
Answer: Yes. If the Debtor has committed certain acts prior to filing bankruptcy a creditor can file an action in the bankruptcy court excepting to the discharge. One example would be a Debtor that incurred a debt in excess of $1,000.00 less than sixty(60) days before filing bankruptcy. Full disclosure is required by the bankruptcy code and any transfers of real or personal property by the Debtor within 1 year must be disclosed on the Statement of Affairs filed with the court.
What happens if I fail to list one of my creditors in Bankruptcy?

Answer: A creditor who is not listed will not have the debt discharged unless you can prove the creditor had actual knowledge that you had filed bankruptcy. If you can find the error or omission before the discharge you can add the creditor your bankruptcy. If you discover the error or omission after your discharge and the creditor attempts to collect on this debt you should file a motion to re-open your bankruptcy and have this creditor listed.
How many vehicles can I keep if I file for Bankruptcy?

Answer: This Depends on the equity you have in each vehicle and the kind of vehicle that you own. A single adult can exempt up to $30,000.00 in personal property when he or she files for bankruptcy. A married couple can exempt up to $60,000.00 in personal property when they file for bankruptcy. In addition, a single person or married couple can exempt a vehicle for each minor dependent in the household.
My home is posted for foreclosure and I have a great deal of equity in my home. What can I do to stop the foreclosure of my home?

Answer: If your home is posted for foreclosure and you do not have it on the market for sale you should file a Chapter 13 to stop the foreclosure. For example if you are in arrears for 4 months at the time you file, you will be able to pay the arrears back on your home over a 3 year period. This payment plan can be extended to 5 years if additional time is needed to repay all of your secured and priority creditors. You could file a Chapter 7 but you must be current on your mortgage on your home at the time you will be discharged in your Chapter 7.
I owe income taxes for several years will these tax debts be dischargeable if I file for Bankruptcy?

Answer: Recent income taxes are not dischargeable in bankruptcy. By recent the bankruptcy code refers to income taxes for the last three(3) years. There is a three(3) prong test for determining if taxes are dischargeable in Bankruptcy.

These are as follows:

    (a) The tax years in question must be more than three(3) years old. That means that all tax years prior to 1999         are now dischargeable if the taxpayer in question in timely filed his or her tax return..

    (b) The tax return must be filed at least (2)years prior to filing of the bankruptcy.

    (c) The tax for the tax years in question must be assessed at least 240 days prior to the filing of the Bankruptcy.

    Note: Taxes for the tax year 1999 will be dischargeable on April 16,2003, provided taxpayer who seeks to discharge this tax year filed his tax return on April 15, 2000. It is important that the debtor understand that even if the taxes are discharged the Internal Revenue Service will still have a lien in the value of the debtors real and personal property that he or she owned at the time he or she filed for bankruptcy. Before filing your bankruptcy petition always obtain a Simple English transcript to determine if you can meet (a), (b) or (c) listed above.
Are student loan dischargeable in Bankruptcy?

Answer: The general rule is that student loans are not dischargeable in bankruptcy. There are exceptions to this rule but the burden is on the debtor to prove that he qualifies for the exception. To do so he or she must prove undue hardship. This is a heavy burden but it is worth the risk if the debtor can prove that under the circumstances his hardship qualifies him for the discharge in whole or in part.
I have just moved to Texas can I file for Bankruptcy?

Answer: Probably not. On the bankruptcy petition you must disclose the length of time you have lived in the district in which you are filing your petition. If you have lived in the district less than 180 days and the Trustee discovers this than he could object to your discharge.
Will the trustee come to my house and inspect my household goods and personal property listed in my inventory?

Answer: Probably not. In my more than 30 years of bankruptcy and having filed more than 750 cases. I have only had 1 case in which the trustee personally came to my clients home to inspect his personal property. In that case the debtor was a doctor and had a considerable annual income in excess of $200,000.00, The trustee believed that my client had some valuable antiques and art objects that he did not disclose, This belief was unfounded and after a personal inspection the doctor and his wife were allowed to exempt all of the personal property listed on his schedules.
If I file a Chapter 13, when will I have to begin monthly payments to the Chapter 13, Trustee?

Answer: If your Chapter 13 Plan is not filed with the filing of your petition your payment is due 30 days after your plan is filed. The Chapter 13 Plan must be filed 15 days from the date your petition is filed. Therefore, the payment date can never begin more than 45 days after the filing of your petition.
Will I be able to get a tax refund if I file a Chapter 13?
Answer: When a Chapter 13 is filed the Internal Revenue Service reviews your case to determine if any tax liability is owing to them. After this is done, your refund will be released to the Chapter 13 Trustee. The Chapter 13 Trustee will then attempt to see if you are current in your Chapter 13 payments, and will then follow the instructions in the Confirmation Order regarding tax refunds.
May I purchase a new or different vehicle during my Chapter 13 Plan period?

Answer: The Chapter 13 Trustee administering your plan will request that you write a letter asking for permission to purchase an auto. A buyer’s “Order Form” (Purchase Order) from the car dealership showing the type of auto, amount, interest rate, and approximate monthly payment will be necessary. The Trustee’s staff will then advise you if any additional information is needed

May I sell property while in bankruptcy? What do I need to do?

Answer: Yes, however you must have permission from either the Trustee or the Court to sell it. You may have to get your attorney involved to make this request. Send a letter to the Trustee requesting permission to sell the property. The Trustee’s staff will advise you and/or your attorney if additional information is needed

May I purchase a new home while in bankruptcy?

Answer: Yes, if you have obtained permission from the Trustee or the Court.

If my income is reduced can my Chapter 13 Plan payments be lowered?

Answer. Contact your Chapter 13 attorney and see if it is feasible to modify your Chapter 13 Plan. If not, you may want to convert to a Chapter 7 and discharge your unsecured debt.

I owe a great deal more money on my vehicle than it is worth. What can I do to reduce my indebtedness on this vehicle?

Answer: You can file a Chapter 13 Plan and request that this debt be “ crammed down.” The lien holder on this vehicle will then only receive the fair market value of the vehicle at the time your petition is filed. For example, if your vehicle is worth only $15,000.00 and you owe $25,000.00 you can cram down this vehicle and the lien holder will only receive the $15,000.00 plus interest during the duration of the Chapter 13 Plan. The remainder of the debt owed the lien holder will be an unsecured debt in your Chapter 13.