Bankruptcy

The decision to file a bankruptcy case is a serious decision. You need proper advice in determining which type, if any, bankruptcy will benefit you, and an attorney that can get the results you want. Consumer bankruptcy cases carry can be very satisfying and give you a fresh start. However, bankruptcy can be tricky and cause more problems than existed before if not properly followed.  It begins with a thorough analysis of your complete financial situation, knowing what strategy to develop and how to guide you through what can be a complicated process.

Although our firm is small, you will meet with a lawyer. A lawyer will handle and prepare your petition and schedules. A lawyer will attend all of your meetings and court hearings.   

Whether the pressure is coming from, medical expenses, consumer debt,  divorce, taxes, personal guarantees of business debt, or student loans, you need to know your rights and what options are available to you.

The attorneys at the law Office of Jeffrey R. McCombs, P.C. has successfully represented individuals and commercial clients in bankruptcy proceedings for 18 years.

SERVICES & PRICING

When you come in for your consultation, we will review your personal situation and explain how bankruptcy may affect each of your debts, property and assets. We will not recommend bankruptcy unless you need it. Our aim is to provide the very best counsel to our clients and we will be as objective as possible about your options.

At the end of your consultation, if you decide that bankruptcy is the best option, we will quote you a very reasonable rate. Payment plans are available. You are under no obligation for whatever you decide. If bankruptcy is your best option, we will help you proceed and get you to where you need to be.

Chapter 7
If you are being crippled by high credit card debt or medical bills, Chapter 7 may be a way for you to discharge those debts. Also called "liquidation," "debt wipe-out" or "fresh start," Chapter 7 cases are typically resolved in about 4 months after the filing date. You will receive a Bankruptcy Discharge and your obligation to the discharged debts will be over. Together we determine if this is the best course of action for you.

Chapter 13
Chapter 13 is also known as a "wage earner plan," "reorganization" or "consolidation." If your income is determined to be too high for a Chapter 7 procedure, but you are facing foreclosure on your home, auto repossessions or tax debts, Chapter 13 can help give 
you some breathing room.. Most debtors who file Chapter 13, keep their assets. This may also be the best option for joint husband/wife filings.

Foreclosure
Frequently, those who file bankruptcy and keep their homes are able to recover their lost equity. We can help you protect your largest investment.

Prices
Typically payment plans begin at $25 per month for a Chapter 7. Because we do not file the bankruptcy in most cases until the final amount is paid. Pay as much or as little as you like per month. The filing fees required by the Court for Chapter 7 currently are $335. In some cases, that can be waived by the Court or the Court may let that be paid in installments. The total amount paid in attorney fees $2,000 plus filing fees.

In a Chapter 13, the attorney fees can be paid out as part of the plan. Our office usually requires a down payment of an agreed amount for the attorney fees and the Chapter 13 filing fee (currently $310) be paid before filing with the remainder of the fees to be 
disbursed as part of the plan. Typically the total amount of attorney fees in the plan varies depending on the amount you put down. The total fees, inclusive of filing fees are between $2,500 and $3,500.

                    

 

Brief Chapter 7 Overview

 

Frequently asked questions

Question: Do I need an attorney to file bankruptcy?

Answer:

No, however the legal system is a maze of very complex laws, rules, and regulations. It is very easy to make mistakes as the wording in the Bankruptcy Code is confusing for even some seasoned attorneys. Mistakes can be very costly. A  knowledgeable and experienced lawyer will make sure that your bankruptcy is filed quickly and correctly. In addition, banks and credit card companies hire teams of aggressive lawyers to fight bankruptcy cases. An attorney representing you is in a better position to negotiate on your behalf.

Question: What are the main differences between Chapter 7 and Chapter 13 bankruptcy?

Answer: Books have been written about the differences and details between the chapters.  

Chapter 7 is frequently called "liquidation" or "straight" bankruptcy. Most people who qualify for Chapter 7 in Texas, and use the Texas exemptions, do not have non-exempt assets. Chapter 7 is reserved for individuals and businesses with little or no ability to repay debts in the future. However, if a debtor has non-exempt assets, the Trustee may seize those assets and distribute the proceeds to the creditors. Chapter 7 Bankruptcy is a fairly short process in legal terms. A debtor must qualify for Chapter 7 under the means test.

Chapter 13 is called "reorganization" or "wage earner plans" bankruptcy because it allows consumers to reorganize their debts and payment schedules. Anyone filing for Chapter 13 must also propose a repayment plan over time. These plan would allow you to catch up on mortgage or vehicle arrears. Under most circumstances in the Courts we practice, the Trustee will take the plan payment from the Debtor's paycheck. No property is seized by the Trustee regardless of exemption status.

Question: Does this mean I lose my house in Chapter 7? 

Answer: No. Typically we can protect your house (under the homestead exemption), vehicles, retirement, household furnishings, etc. For all secured property, you must tell the court what are your intentions with the property. If you are current on your home and you elect to keep it, all you must do is keep making the payments that you are obligated.

Question: Will I ever be able to buy a house?

Answer: Most mortgage companies tell us that after 2 years, bankruptcy doesn't hurt your chances of buying a home, so long as you are otherwise qualified.

Question: What does bankruptcy do to my credit?

Answer: In the end, a bankruptcy can make your credit better. Even if all your payments have been made on time, you may owe so much money that a new credit application would be denied. In some cases where a client's credit score was destroyed, the score went up almost immediately after filing. 

Question: What if I'm behind on my mortgage or car can I still file Chapter 7? 

Answer: Often times it would be better to repay the arrears over time in a Chapter 13. It is possible to still file Chapter 7, but debtors quickly and frequently find themselves in a worse situation than before they started.

Question: Will I be able to finance a new car after bankruptcy?

Answer: Your income qualifies you, you will most likely be able to finance a new car. However, you will probably be charged a higher rate of interest.

 

Question: Do I have to have a attorney represent me? 

Answer: No. You have the right to represent yourself. With that said, the Bankruptcy Code is often politely described by attorneys as "convoluted" and "unintelligible." There are pitfalls and traps throughout the process.  The non-lawyer who successfully handled his/her own bankruptcy is very rare. Most bankruptcy attorneys have never met this person.

Question: Can a paralegal or a legal document service represent me?

Answer: In Texas, legal document preparers and paralegals cannot represent you. They cannot even give you legal advice. Further, they cannot represent you in court. Only an attorney can do those things for you. People go to them because they feel that it is cheaper than hiring a lawyer. Bankruptcy cases are very complicated and it takes the full attention of an experienced attorney to get the very best outcome for you.

Question: How much do you charge? 

Answer: We charge a $2000 flat fee for Chapter 7. This must be paid in full before we file the case. Any third party fees are paid directly by the client to that third party. We allow clients to pay the attorney fees over time if they desire at incredibly flexible rates.

Attorneys fees in a Chapter 13 are typically paid through the Chapter 13 plan and we are treated as a creditor. We can file a chapter 13 for $0 down in attorneys fees in some cases. Typically, we charge $500 down, plus any third party fees, with the remainder to go into the Chapter 13 plan. 

There are court filing fees of about $335 for Chapter 7 and $310 for Chapter 13 that must be paid to the Bankruptcy Court.

For those clients who are not filing bankruptcy, but have issues with a bankruptcy case,  Attorney fees vary depending on what your case requires the lawyer to do. We have payment plans available for most cases, and we will work with you to come up with a fee and a payment plan that you will be comfortable with.

Question: I'm a landlord trying to evict (or have evicted) a tenant who just filed bankruptcy. What can be done?

Answer: If you already have a judgment for the eviction, there is no automatic stay in place. However, you might have a rough time convincing a Sheriff, Constable, etc. of this fact. We can ask the Court to issue an Order that clarifies how the automatic stay effects your rights. If the tenant files before you have received the eviction, you will need to ask the court to lift the stay and explain the legal reasons why the stay should be lifted. 

Question: I'm just trying to get divorced, but the Judge won't allow me while my spouse is in Bankruptcy. 

Answer: As mentioned above, Bankruptcy is deceptively complicated. It's the policy of many Courts not to touch a case while one of the parties are in bankruptcy without lifting the automatic stay, even if no property is involved. In situations where a martial property distribution is wanted or needed, a lifting of the stay is required.  We charge a $400 flat fee, plus filing fees, to handle these cases.  

Question: What happens to the child support/spousal support? 

Answer: Domestic support obligations, such as child support or maintenance, are not dischargeable in bankruptcy. You will not be able to wipe out child support arrears. However, you might be able to get caught up through a Chapter 13 plan.

Question: Would a debt consolidation company be better?

Answer: It really depends on your situation – and on the consolidation company. Frequently, debt consolidation plans are phony deals that enrich the company at your expense. At the end of the day, your credit will be just as bad as or worse than if you had filed bankruptcy and you will still be in debt. There is only one way to have good credit and keep good credit...

you must always pay according to the original terms and never owe more than you can afford to pay back.

Question: Can I negotiate with my creditors?

Answer: Yes, but your creditors do not make it easy. Most creditors will not negotiate with you unless the account is already very delinquent. They usually want the settlement money "up front"...no payment plans; and after you pay out all the money, it does not restore your credit.

Question: Isn't bankruptcy immoral, and just taking the easy way out?

Answer: Bankruptcy is a gut-wrenching experience that most people would rather avoid if they could. It is not easy. And it is not immoral. Bankruptcy is the law of this land, not a gimmick or loophole. Bankruptcy is a law enacted by the U.S. Congress, called Title 11, U.S. Code, (Bankruptcy Code), pursuant to the U.S. Constitution, (Article 1, Section 8).

Although there are those that may sneer at this, the fact is, bankruptcy is the law provided to the American People to deal with situations where a person finds that they owe more money than they can afford to repay.

Question: Is it wrong to claim bankruptcy?

Answer: It is no worse and no better than claiming all of the deductions and exemptions on your tax return that you are entitled to claim. You are not required to claim them, you are ENTITLED to. Likewise, you are ENTITLED to claim bankruptcy if you owe more money than you can reasonably afford to repay. Morality is not for us to decide. With regard to your legal rights, Bankruptcy laws are the first and most important line of consumer defense. It is your right to have relief, and you should have an experienced attorney on your side to make it happen successfully.

Question: Before considering bankruptcy, shouldn't I first try to seek out some consumer credit counseling?

Answer: You will. It is now required to file a certificate of completion from a credit counseling from an agency approved by the court. Click here for an list of approved agencies in Texas.

Question: How long does the process take?

Answer: Chapter 7 typically takes approximately 4 months from filing until you receive your discharge. Chapter 13 typically requires that you complete the plan which is between 36 or 60 months depending on your situation.

Question: What happens if I can't complete my Chapter 13 plan?

Answer: Sometimes things happen when Chapter 13 no longer is possible or a situation has changed to the point that Chapter 13 may no longer be the best option. Although each case is different, plans can sometimes be modified and Chapter 13s can sometimes be converted to Chapter 7. We will review your situation whenever a change occurs and do what is best for you.

WE ARE A DEBT RELIEF AGENCY. WE HELP PEOPLE FILE FOR BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE