Experienced Consumer Bankruptcy Representation

At Rinnou & Associates, P. C., in Richardson, Texas, our attorneys provide comprehensive counsel to individuals who want to use the federal bankruptcy lawsto get a fresh financial start. To set up a free initial 30 minutes confidential consultation, contact our office by e-mailor call us at 972-705-9184.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is often referred to as "liquidation". This may sound confusing, but think of it this way: ever heard the term "cash flow"? Cash can flow from person to person easily, just like water flows down a river. In a Chapter 7 Bankruptcy, your bankruptcy trustee will turn certain types of your property into cash (or "liquidate"), and that cash will then flow to your creditors to pay off your debts. In many Chapter 7 cases, all of the debtor's property is exempt, so the trustee will have no assets to liquidate and distribute to creditors.

The bankruptcy begins when you (and your attorney) file for bankruptcy with the court. You are no longer in bankruptcy when you receive a discharge.

What is Chapter 13 Bankruptcy?

Chapter 13 is a proceeding under the federal bankruptcy laws where a person turns his debts, together with a plan for repaying them, over to the Bankruptcy Court. The debtor (you) will make regular installment payments to a person called the Chapter 13 Trustee. The Trustee collects the installment payments and pays required creditors in the manner prescribed in the Plan. While the Plan is in effect, the court puts into effect an Automatic Stay which prevents collection efforts from all creditors.

Chapter 13 bankruptcy often provides a solution for people who have faced short-term financial setbacks like job loss, illness, or large unexpected expenses. Chapter 13 combines the Automatic Stay, with the ability to catch up past due payments over a period of three to five years after filing bankruptcy while keeping current payments up to date. Many people looking to stop foreclosure or avoid repossession choose Chapter 13 for this reason.

What's the Difference Between Chapter 7 and Chapter 13?

In a Chapter 7 bankruptcy, you don't pay off your debts. Instead, you must turn over all non-exempt property to the Chapter 7 Trustee. The Trustee will sell all non-exempt assets, and creditors are paid from the proceeds of this sale.

In a Chapter 13 you may keep all of your property. You have the opportunity to take (usually) 3 to 5 years to get caught up on debts that have fallen behind, while still making all current debt payments.

How long does the process take?

 Chapter 7 cases where there are no assets to distribute to creditors are closed fairly quickly, sometimes in as little as a few months. Even though you have received a discharge, however, you case with the Court will remain open until the judge enters an order closing the case. A copy of the order closing your case will be sent to you by the Court.  Chapter 13 repayment plans may take up to 5 years for you to complete.

What is the Chapter 7 Means Test?

To qualify for Chapter 7 bankruptcy, you must first pass a "Means Test". The Means Test has two steps. The means test can get very complicated so we at Rinnou & Associates PC recommend you seek the assistance of one of our experienced bankruptcy attorneys.

Should I file Chapter 7?

You may want to consider filing for Chapter 7 if you:

·         Have no income or low income

·         Have little or no money left after paying your necessary living expenses each month

·         Rent or have little equity in your home

·         Have few assets (or no assets) outside your furniture, clothing and other necessities.

Do I qualify for Chapter 13?

To qualify for Chapter 13 bankruptcy, a debtor must:

·         Have a regular source of income;

·         Have enough income left over after covering current necessary living expenses to make regular payments to the trustee; and

·         Fall within pre-set limits for secured and unsecured debts. The limits are updated periodically, and a local bankruptcy attorney can tell you the exact current limits.

Requirement of Credit Counseling:

Whether you are filing under Chapter 7 or 13, you must receive a Credit Counseling Briefing from a certified credit counseling agency – BEFORE YOU FILE. This counseling is REQUIRED by federal law (with very few exceptions), and your case may be DISMISSED if you do not attend a counseling briefing. Your bankruptcy attorney can recommend a counseling provider for you.

Bankruptcy Terminology:

Bankruptcy: A legal procedure for dealing with debt problems of individuals and businesses; specifically, a case filed under one of the chapters of title 11 of the United States Code (the Bankruptcy Code).

Bankruptcy Abuse Prevention and Consumer Protection Act:  The name (mis-name) given by Congress to the new bankruptcy law legislation passed and signed into law by President GW Bush, effective October 17, 2005 which was designed to dramatically changed the way eligibility for filing bankruptcy was determined.   It was neither designed to protect consumers nor to address actual bankruptcy abuse. 

Bankruptcy administrator: An officer of the judiciary serving in the judicial districts of Alabama and North Carolina who, like the U.S. trustee, is responsible for supervising the administration of bankruptcy cases, estates, and trustees; monitoring plans and disclosure statements; monitoring creditors' committees; monitoring fee applications; and performing other statutory duties. Compare U.S. trustee.

Bankruptcy Code:  The informal name for title 11 of the United States Code (11 U.S.C. ��101-1330), the federal bankruptcy law. 

Bankruptcy court: The bankruptcy judges in regular active service in each district; a unit of the district court. 

Bankruptcy estate: All legal or equitable interests of the debtor in property at the time of the bankruptcy filing. (The estate includes all property in which the debtor has an interest, even if it is owned or held by another person.)

Bankruptcy judge: A judicial officer of the United States district court who is the court official with decision-making power over federal bankruptcy cases.

Bankruptcy petition:  The document filed by the debtor (in a voluntary case) or by creditors (in an involuntary case) by which opens the bankruptcy case. (There are official forms for bankruptcy petitions.) 

Business bankruptcy:  A case in which the majority of total debts owed are business (or, non-consumer) related.