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341 Meeting

How to Recover After Bankruptcy

Most of us hope that we never experience bankruptcy; however, there is no telling when we could become its victim. Bankruptcy might be a taboo word for most people, but it isn’t new – it is a fact of life. Despite what people might say, it is possible to recover from it. Here is how you can get back on your feet after bankruptcy.

·        Determine What Went Wrong

There is always a reason why an individual declares bankruptcy. To ensure that you don’t experience the same problems again, determine what went wrong. Here are some common reasons for declaring bankruptcy:

Medical Debt

Most people in America file for bankruptcy due to medical debt, and that is why it is essential to have health insurance coverage.

Loss or Reduction of Income

Loss or reduction of income can make things very difficult for you. If this was the reason behind your bankruptcy, you would have to manage your expenses better in the future.

·        Create a Budget

Following bankruptcy, you should create a budget. When creating a budget, set realistic restrictions on your spending and see your financial plan as a road-map to help you accomplish your savings goals. Set a goal of limiting all your expenses to 50 percent of your income. You can be flexible with your budget and adjust it as your financial circumstances change over time.

·        Pay all Your Bills on Time

Bankruptcy may have discharged your larger debts, but you will still have some financial obligations. If you want to recover, you will have to pay your bills on time and avoid defaults or late payments, although it might be hard. Making late payments can have a negative impact on your credit report. Not only that, but this will also make recovering after bankruptcy more difficult for you.

·        Rebuild Your Credit

You will have to rebuild your credit rating after some time, especially if you want to buy a new car, home, or invest in the future. Don’t try to rush into this; only take on debt that you can afford to pay off quickly. If you already owned a home and were able to keep it during bankruptcy, make sure to make timely repayments every month. Try to avoid products that lead you towards bankruptcy. For example, if you got into trouble because of credit card debt, then you should avoid applying for a credit card to re-establish your credit rating.

Final Thoughts

Bankruptcy isn’t the end of the world. If you stay positive and do everything we have discussed above, you should be able to recover from it and return to normal life. For questions and queries, feel free to reach out to us.

Should You File for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy?

Chapter 7 bankruptcy and Chapter 13 bankruptcy are two common legal options with different consequences, but both are helpful for borrowers who have accumulated too much debt. Chapter 7 ba

Chapter 7 bankruptcy and Chapter 13 bankruptcy are two common legal options with different consequences, but both are helpful for borrowers who have accumulated too much debt. Chapter 7 bankruptcy can help clear some or all of the debt. However, if you file for this type of bankruptcy, you will have to surrender assets such as cash or property. Chapter 13 bankruptcy helps you get some of the debt discharged, but you get to keep your property, and you can repay your debts through a repayment plan. If you have accumulated too much debt and want to file for bankruptcy, you would want to determine which type of bankruptcy would be right for you. We will help you with this.

Should You File Chapter 7 Bankruptcy

If you have very little disposable income, you could consider filing for Chapter 7 bankruptcy. Here are a few things that you should consider if you are struggling to decide whether you should file for Chapter 7 bankruptcy or not.

·         Less Debt-Repayment Load

Chapter 7 bankruptcy discharges some or all of your debt. This means that you won’t have to pay money towards credit card bills or loans, and you can use that cash for other things such as basic household expenses.

·         Relief from Collectors

If you are struggling to pay your debts, Chapter 7 bankruptcy can stop debt collectors from taking any legal action against you. When you file for Chapter 7 bankruptcy, some of your creditors would be restricted from contacting you, collecting cash from you, continuing wage garnishment, and starting lawsuits against you.

·         Loss of Assets

One of the major consequences of filing for Chapter 7 bankruptcy is the potential loss of assets. You might have to give up your property or cash, depending on the laws in your state.

Should You File Chapter 13 Bankruptcy

If you want to keep the property that you own, Chapter 13 bankruptcy might be a better option for you. Here are some things that you should consider to determine whether Chapter 13 bankruptcy is right for you or not.

·         Repay the Debt

Chapter 13 bankruptcy can help you repay your debt in a more cost-effective and convenient way. Through it, you will create a plan to repay some or all of your debt. You can make monthly payments towards all your debts based on the repayment plan. Your monthly payments might be reduced, which would make it easier for you to repay them.

·         Discharge Your Debts in Three to Five Years

With Chapter 7 bankruptcy, your debts will be discharged quickly, but this doesn’t happen with Chapter 13 bankruptcy. Under Chapter 13 bankruptcy, your debts won’t be discharged until the completion of the repayment plan, which generally takes about three to five years.

·         You will have to file for Chapter 7 Bankruptcy if You Have Sufficient Income

You will only qualify for Chapter 7 bankruptcy if you can prove that you don’t have the money to repay your debt. If you have sufficient income, then you won’t be able to file for Chapter 7, and Chapter 13 bankruptcy will be your only option.

Final Thoughts  

Bankruptcy is a very important decision with some serious consequences. You should consider your options and determine whether you should file for Chapter 7 bankruptcy or Chapter 13 bankruptcy.

5 Biggest Reasons Why so Many Chapter 13 Cases Fail

According to available data, only 33% of Chapter 13 bankruptcy cases result in a discharge. For comparison, nearly 96% of Chapter 7 cases succeed.  There are many factors involved that result in such a striking failure rate for chapter 13 cases. We list down the 5 biggest reasons why so many chapter 13 cases fail.

1. Loss of Motivation

Filing Chapter 13 is a long and arduous process. Unlike Chapter 7, which usually lasts for only a few months, in the case of Chapter 13, you need to complete a 3-5 year repayment plan before the remaining debt is discharged.  Many filers simply get tired of the process and realize that fighting to retain certain properties simply isn’t worth their energy.

2. Not Enough Resources

A lot of individuals filing for Chapter 13 bankruptcy just don’t have the required resources to begin with. Often as a sort of last resort, they file for a Chapter 13 case to stop a foreclosure or lawsuit. It is only when once the process is started that the court discovers that the filer doesn’t have the financial means to go through the Chapter 13 repayment plan and dismiss their case.

3. Sudden Changes in the Financial Status

As mentioned before, a Chapter 13 plan is a long drawn process. During that 3-5 year period, a lot could change that would undermine a filer’s ability to go through the plan. They could lose their job, lose their medical insurance, or incur extra expenses due to some unforeseen circumstances. All this impacts their ability to go through with the repayment plan, and their cases are dismissed as a result.

4. Strategic Reasons

Sometimes, debtors themselves may file for Chapter 13 without the intention of completing it through. They do so for strategic reasons. This could range from wanting to delay foreclosures, to avoiding a lawsuit, to negotiating a new settlement with their creditors. Not all of them would necessarily benefit from discharge, and they drop out halfway through the case.

5. Not Hiring an Attorney

Chapter 13 Bankruptcy is a far more complicated process than most people realize. There is a lot of subjectivity in how the legal provisions are interpreted, and you need an experienced legal profession on your side to help you built up your case. According to a 2011 study by the Bankruptcy Court for the Central District of California, of all those who filed for Chapter 13 bankruptcy without an attorney, only less than 0.5% managed to get a confirmation. In comparison, those filers who were represented by an attorney have a confirmation rate of an astonishing 55%!

Struggling with debt and in need of legal assistance? Book an appointment online or call at 512-640-3340 for a free consultation with a seasoned attorney.

What Should You Expect at a 341 Meeting?

A 341 Meeting, also known as a Meeting of Creditors, may sound unnerving for first-timers. However, the process itself is fairly routine and quick. In the meeting, an appointed trustee will oversee your case, confirm your identity, and proceed to ask a series of questions about your bankruptcy paperwork. Here in this article, we give a detailed overview of what to expect at a 341 meeting.

Preparing for the Meeting

Before going to the meeting, make sure to double-check your bankruptcy petition in case you missed something. You should have all the information provided exactly as it, and as accurate as possible (e.g., the value of your assets, your name as it appears on your government issued ID, etc.). The trustee will be looking at the information you provided, and will check for any signs of misleading information or fraud.

What to Bring

The list of documents you need to bring along for the hearing is short. Typically, you are required only to bring along an approved photo I.D, your Social Security card, and any documents that reflect a financial change since you filed the petition.

The Hearing

Most 341 hearings last no more than 10 minutes. During the hearing, the trustee will ask you a series of routine questions which only demand a simple answer from you. Afterward, they may then proceed to ask questions more specific to your case. Creditors might also be present to ask questions about your finances. Although such cases are rare and most of the time, creditors won’t be present at the 341 meetings.

Some Typical Questions They May Ask

Below are some typical questions a trustee may ask during a hearing. However, different cases may involve a different set of questions, and thus, it always a good idea to check with an attorney before your scheduled 341 meeting.

  1. To the best of your knowledge, is all of the information provided in your bankruptcy papers correct?
  2. Did you recheck your bankruptcy petition and schedules before filing with the court?
  3. Have you listed all of your creditors in the petition?
  4. Have you disclosed all of your assets?
  5. Have you ever declared bankruptcy before?
  6. Did anything change since you filed for bankruptcy?
  7. Have you filed all your due tax returns?
  8. Do you have any domestic support obligations such as alimony or child support?
  9. In the last year, have you made any payments to creditors exceeding a total of $600?

Consider hiring an Attorney.

An attorney can help you better prepare for your 341 meeting by finding and fixing any honest mistake or inaccuracy that may be in your bankruptcy paperwork. Presenting accurate and complete information to the trustee is important, otherwise they may ask you to re-file an updated petition or worse, in case they mistakenly view the information you provided as fraudulent, alert the court. For a free consultation with a seasoned attorney, book an appointment online or call at 512-640-3340.

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