Chapter 13 Bankruptcy in Alief, Texas: A Legacy Perspective
As a legacy debtor attorney who represented over 4,000 individuals navigating financial struggles through bankruptcy, I am now focused on assisting creditors and handling family law matters. However, the knowledge gained from years of representing debtors remains invaluable, especially when addressing the complexities of Chapter 13 bankruptcy in Alief, Texas.
Understanding Chapter 13 Bankruptcy
Chapter 13 bankruptcy provides individuals an opportunity to restructure and repay their debts under a court-approved plan. Below, we address some of the most common questions and scenarios that arise during the process.
What Is Required for Court Approval of a Chapter 13 Plan?
The court will confirm a Chapter 13 plan if it meets the following criteria:
- Compliance with Legal Requirements: The plan aligns with Chapter 13 legal statutes.
- Payment of Fees: All fees, charges, and deposits are paid.
- Good Faith Proposal: The plan is proposed with honest intentions.
- Unsecured Creditors’ Payment: Creditors must receive at least as much as they would under Chapter 7 bankruptcy.
- Feasibility: The debtor demonstrates the ability to make the required payments.
- Secured Creditors: Secured creditors must be addressed per Chapter 13 guidelines.
When Do Debtors Appear in Court?
Debtors must attend a meeting of creditors approximately one month after filing. During this meeting, the Trustee reviews the case and may require attendance at an orientation. If necessary, the debtor may also appear at a confirmation hearing. Both meetings typically take place at the United States Federal Court Building, located at 515 Rusk, Houston, Texas.
What Happens If the Court Does Not Approve the Plan?
If the court rejects the proposed Chapter 13 plan, the debtor can:
- Modify the plan to address the court’s concerns.
- Convert the case to Chapter 7 bankruptcy.
- Dismiss the case entirely.
The court will usually specify the reasons for disapproval, allowing the debtor to adjust the plan accordingly.
How Are Creditors’ Claims Handled?
Creditors must file claims within 90 days after the first meeting of creditors. Claims not filed within this period are barred, and unpaid claims are discharged upon plan completion. A debtor may file claims on behalf of creditors, and the Chapter 13 trustee begins payments once claims are approved.
What If New Debts Are Incurred During Chapter 13?
Only specific types of new debts can be included in the plan, such as:
- Taxes that become payable during the case.
- Necessary consumer debts pre-approved by the trustee.
Other debts incurred after filing must be paid outside the plan. It’s crucial to seek trustee approval before incurring any new debt.
What Happens If the Debtor Moves?
Debtors must notify the court and trustee immediately of any address changes to ensure they receive all necessary communications. Failing to update an address can lead to case dismissal.
Discontinuing a Chapter 13 Case
Debtors can voluntarily dismiss or convert their Chapter 13 case to Chapter 7 at any time. However, simply ceasing payments may result in court actions compelling compliance. It’s recommended to handle such decisions through an attorney for a smooth resolution.
What If Payments Cannot Be Completed?
If a debtor cannot complete their Chapter 13 payments, they have three options:
- Dismissal: End the case.
- Conversion: Convert to Chapter 7 bankruptcy.
- Hardship Discharge: Seek a hardship discharge if the inability to pay is due to circumstances beyond their control.
Bankruptcy Considerations and Resources
When navigating bankruptcy, full transparency about financial transactions and a detailed understanding of the law are critical. Many individuals can successfully protect their homes, assets, and peace of mind by seeking expert advice.
Although I no longer represent debtors in bankruptcy cases, I encourage those facing financial difficulties to consult experienced bankruptcy attorneys who can provide tailored advice and representation.
Service Areas and Legacy Support
Over my career, I proudly assisted clients in Alief, Katy, Sugar Land, Pearland, Friendswood, Clear Lake, Galveston, and beyond. Today, I continue to serve the legal community by leveraging my expertise in creditor support and family law matters.
