Sugarland Texas Bankruptcy Information

Sugarland Texas Bankruptcy Information. What do creditors with mortgages against the debtor’s property do in a Chapter 7 case?

Creditors with valid mortgages against the debtor’s property are usually permitted to repossess or foreclose on the property, if the value of the property does not exceed the amount secured by the property and the mortgage is in default. If the mortgage is current on exempt property the debtor merely continues to make his regular payment (such as a car or house payment) as before and keeps the property. Although the debt will be wiped out by the bankruptcy discharge the mortgage lien is usually not extinguished in the proceeding. The lien may be enforced after bankruptcy even if the debt has been discharged. Foreclosure will usually only takes place where the loan is in monetary default which is not timely cured. The filing of bankruptcy is not sufficient grounds for calling a loan or declaring a default. A creditor must prove the validity of his mortgage and obtain a court order, however, before repossessing or foreclosing on any property, and the debtor should not turn any property over to a creditor until a court order has been obtained. If the value of the mortgaged property exceeds the amount secured by the mortgage, the creditor might not be allowed to repossess the property. The debtor is permitted to retain certain property even if there is a valid mortgage against it and the debtor may redeem certain mortgaged property from the creditor by paying less than the amount secured by the mortgage.

20. What do creditors without mortgages do in a Chapter 7 case?

If the debtor has non-exempt assets, creditors without mortgages (they are called unsecured creditors) may file claims with the court within 90 days after the date of the meeting of creditors. The trustee examines these claims and files objections to those that he deems improper. When the trustee has collect all of the debtor’s non-exempt property and converted it to cash, and when the court has ruled on any objections filed against the claims of creditors, the trustee distributes the funds according to certain priorities. Administrative expenses, claims for wages, salaries, and contributions to employee benefit plans, claims for the refund of certain deposits, and tax claims, are given priority, in that order, in the distribution of finds by the trustee. If there are funds remaining after the payment of these priority claims, they are distributed pro rata to the remaining unsecured creditors. If the debtor has no non-exempt assets, the creditors are notified not to file claims. If assets are later discovered the creditors will then be given an opportunity to file claims.

21. What should the debtor do if he moves before his chapter 7 case is closed?

He should immediately between a debtor and a bankruptcy court are by mail, and if the debtor fails to comply with a court order or a directive of the trustee because he did not receive it, his chapter 7 case may be dismissed and his discharge not granted. It is important, therefore, that the bankruptcy court always have the debtor’s current address. Many courts have change-of-address forms for the debtors to use when they move, and the debtor should obtain one when he is in court for the meeting of creditors.

22. How is a debtor notified that his discharge has been granted?

Usually by mail. Most courts send a form called “Discharge of Debtor” to the debtor and to all creditors. This form is a copy of the court order releasing the debtor from his dischargeable debts, and it usually serves as notice that the debtor’s discharge has been granted. It is usually mailed about four months after the case is filed, unless the trustee or creditor has filed an objection to the discharge of the debtor, in which case a hearing must be he so that the court can rule on the objection. If the debtor’s discharge is not granted, the court must inform the debtor of the reasons for not granting it.

23. What if the debtor wishes to repay one or more of his discharged debts after filing under chapter 7?

A debtor may repay as many of his dischargeable debts as he wishes after filing chapter 7. By repaying one creditor, a debtor does not become legally obligated to repay any other creditor. The only discharged debts that the debtor is obligated to repay after filing under chapter 7 are those for which the debtor and the creditor have entered into what is called a reaffirmation agreement that meets certain requirements of the bankruptcy law, which are too technical to list her. After you file your petition, a creditor may ask you to reaffirm a certain debt or you may seek to do so on your own. Reaffirming a debt means that you sign and file with the court a legally enforceable document, which states that, you promise to repay all or a portion of the debt that may otherwise have been discharged in your bankruptcy case. Reaffirmation agreements must generally be filed with the court within 60 days after the first meeting of creditors.

Reaffirmation agreements are strictly voluntary. Reaffirmation agreements are not required by the Bankruptcy Code or other state or federal law. You can voluntarily repay any debt instead of signing a reaffirmation agreement, but there may be valid reasons for wanting to reaffirm a particular debt.

Reaffirmation agreements must not impose an undue burden on you or your dependents and must be in your best interest. If you decide to sign a reaffirmation agreement, you may cancel it at any time before the court issues your discharge order or within sixty (60) days after the reaffirmation agreement was filed with the court, whichever is later. If you reaffirm a debt and fail to make the payments required in the reaffirmation agreement, the creditor can take action against you to recover any property that was given as security for the loan and you may remain personally liable for any remaining debt.

24. How long does a chapter 7 case last?

A chapter 7 case begins with the filing of the case and ends with the closing of the case by the court. If the debtor has no nonexempt money or property for the trustee to collect, the case will most likely by closed shortly after the debtor receives his discharge, which is usually about four months after the case is filed. If the debtor has nonexempt money or property for the trustee to collect, the length of the case will depend on how long it takes the trustee to collect the assets and perform his other duties in the case. Most consumer cases with assets last about six months, but some last considerably longer.

25. What should a person do if a creditor later attempt to collect a debt that was discharged in his chapter 7 case?

When a discharge is granted, the court enters an order prohibiting the creditors from later attempting to collect from the debtor any debt that was discharged in the chapter 7 case. If a creditor violates this court order he may be held in contempt of court and fined; and he may be liable to the debtor in damages. If a creditor later attempt to collect a discharged debt, the debtor should give the creditor a copy of the order of discharge and inform him that the debt has been discharged under chapter 7. If the creditor persists, the debtor should contact his attorney. If the creditor files a lawsuit against the debtor, it is important not to ignore the matter, because even though any judgment entered against the debtor on a discharged debt can later be voided, voiding the judgment may require the services of an attorney, which could be costly to the debtor.

26. Does a chapter 7 discharge affect the liability of other parties who may be liable to a creditor on a discharged debt?

A chapter 7 discharge releases only the debtor. The liability of any other party on a debt is not affected by a chapter 7 discharge. The only exception to his rule is in community property states where the spouse of a debtor may also be released from certain community debts.

27. What is the role of the attorney for a consumer debtor in a chapter 7 case?

The debtor’s attorney performs the following functions in a chapter 7 case of a typical consumer:

1. Analyze the amount and nature of the debts owed by the debtor and determine the best remedy for the debtor’s financial problems.

2. Advise the debtor of the relief available under chapters 7, 11, 12 and 13 of the bankruptcy laws, and of the advisability proceeding under each chapter. Chapters 7 and 13 are primarily used by individuals (consumers). Chapter 12 is primarily used for farmers and chapter 11 if primarily used for business corporations.

3. Assemble the information and data necessary to prepare the chapter 7 forms for filing

4. Prepare the petitions, schedules, statements, and other chapter 7 forms for filing with the bankruptcy court.

5. Assist the debtor in arranging his assets so that he can retain as much of them as possible after the chapter 7 case.

6. Filing the chapter 7 petitioners, schedules, statements, and other forms with the bankruptcy court, and if necessary, notifying certain creditors of the commencement of the case.

7. If necessary, assisting the debtor in redeeming certain personal property and in setting aside certain mortgages or liens against exempt property.

8. Attending the meeting of creditors with the debtor.

9. If necessary, preparing and filing amended schedules and certain statements and other documents with the bankruptcy court in order to protect the rights of the debtor.

10. If necessary, attending reaffirmation hearing with the debtor and assisting the debtor in reaffirming certain debts.

Our toll-free telephone number is at 1-866-912-9832. You need to learn about all of your options including information about credit, debt, bill consolidation services and federal bankruptcy law.  Please call us at 1-866-912-9832 so that we can discuss your case.You can also visit our web site: www.busby-lee.com. Our attorney fees are reasonable, competitive, and court- approved.   It is important that you call us soon. Our office is conveniently located near the Galleria and Highway 59 on Hillcroft between Richmond and Westheimer.  We also maintain a branch Katy, Texas office at 1804 Snake River Road, Suite, C Katy, Texas 77449  Call us toll-free at 1-866-912-9832 for directions to our office.

We provide bankruptcy services in the greater Houston metro area including the cities of Katy, Sugarland, Pearland, Friendswood, Clear Lake and Galveston. We also handle cases from The Woodlands, Spring and Tomball and cases in Baytown and Channelview.

We handle bankruptcy cases in all of these counties: Brazoria, Chambers, Galveston, Matagorda, Austin, Brazos, Colorado, Fayette, Fort Bend, Grimes, Harris, Madison, Montgomery, San Jacinto, Walker, Waller, Wharton

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