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Know about Texas Bankruptcy Exemptions
Filing for bankruptcy is often considered to be a taboo. You need to open your mind to realize that it is one of the best options to manage your finances, especially if you are struggling with large debts. The government provides various exemptions to debtors when they file for bankruptcy. Call 888-297-6023 to know more about these exemptions and how you can benefit from them.

Apart from federal bankruptcy exemptions, every state has its own list of exemptions which protect a large portion of bankruptcy filer’s property. When you file for bankruptcy, everything you own becomes a part of the bankruptcy estate, from which you can keep certain exempt property without paying anything. According to Dallas based bankruptcy law firm, Recovery Law Group, some states offer you a choice between federal and state set of exemptions, while others allow you to choose from the state exemption sets only. Though the state of Texas offers you a choice between state and federal exemptions, the state exemptions are plentiful. What’s more, if any asset is not covered by Texas exemption, you can opt for wildcard exemption of federal bankruptcy scheme. A married couple filing for a joint bankruptcy can double the exemption for any joint property they own!

Here’s a look at various Texas bankruptcy exemptions:
1. Texas homestead exemptions
The unlimited homestead exemption is available for 10 acres or less area residence in village, town or city or 100 acres or less in the country. For married couples, this exemption doubles! In case you sell your house, the proceeds are exempted for 6 months after sale under this exemption.
1. Texas motor vehicle exemptions
The entire value of one motor vehicle per licensed household member is available as per this exemption. In case there is an unlicensed person who depends on someone else to drive him/her around, you can still get the vehicle exempted.
1. Texas personal property exemptions
Personal property except real estate exemptions cannot exceed $100,000 ($50,000 in case of a single adult, without family). in case your personal property exceeds the exemption limit, that much amount will become non-exempt. This includes:
- Sports and athletic equipment including bicycles;
- Home furnishings including family heirlooms;
- Jewelry (with an upper limit of 25% of total exemption, i.e. $25,000 in case of family and $12,500 in case of individual filer);
- Food and clothing;
- Up to 2 firearms;
- Animals, including pet and domestic, plus their food. You are allowed two mules, donkeys, or horses plus tack, 12 head of cattle, 60 head of livestock and 120 fowl;
- Health saving accounts;
- Health aids like walking sticks, wheelchairs, hearing aids, ;
- Burial plots;
- Bible or any other sacred book (not subjected to $100,000/$50,000 limits).
1. Pension and retirement accounts
Most pension and retirement accounts are exempted in both state and federal exemptions. Texas state also provides exemptions to the following pension and retirement accounts:
- ERISA-qualifies government or church benefits. This includes IRAs, Keoghs and Roth IRAs.
- County and district employee retirement and pension benefits.
- Firefighter pension and retirement benefits.
- Law enforcement officers, emergency medical personnel survivors’ benefit.
- Police officer retirement and pension benefits.
- Judges pension and retirement benefits.
- Municipal employees, state employees and elected officials’ retirement and pension benefits.
- Teacher retirement and pension benefits.
- Retirement benefits which end up being tax-deferred.
1. Insurance exemptions
These include:
- Life, accident, health insurance or annuity benefits such as money, policy profits or cash value due or paid to the beneficiary;
- Texas employee uniform group insurance;
- Fraternal benefit society benefits (e.g. from Freemasons, Elks, Knights of Columbus, );
- Texas public school employees’ group insurance;
- Texas state college or university employee benefits.
However, Texas does not offer any exemption against lawsuit proceeds. It also lacks a wildcard exemption through which you can protect any property as per your wish. The silver lining is that such a provision is available in federal exemption set, through which you can protect a portion of such funds. In case you have a pending lawsuit or an injury claim under process in court, it becomes part of your bankruptcy estate. If it appears to be of value, the bankruptcy trustee Dallas might hire a lawyer to litigate it. It is important to, therefore, check exemptions before filing for bankruptcy.
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July 19, 2019
What is Chapter 13 Debt Release?
Bankruptcy is sometimes inevitable. It is not one of the most favorable situations to be in. But it is important to make the right moves to be able to come out of bankruptcy and to evade the creditor’s torture. When thinking or learning about bankruptcy, Chapter 7 and Chapter 13 discussions are very common. Chapter 13 is a better alternative than Chapter 7 in most cases. In case you need to determine which is best for you and why; do not hesitate to log on to Recovery Law Group to gain a deeper insight.

What is Chapter 13 bankruptcy plan?

The best part of the Chapter 13 payment plan is that you do not have to do away with all the assets but instead you find out the best way to payout your debts. Unlike Chapter 7 arrangement, this plan is much more reasonable and practical. Based on the debt type, you make an agreement with your lenders on a payment schedule based on your disposable income. The debt is consolidated, and a part of the debt is released once you make regular monthly payments as per the Chapter 13 payment plan for a period of 3-5 years as agreed by the lenders.

How to make a payment plan?

The tenure is the most important aspect of the payment plan. The tenure is decided by the court on the basis of your average income in the recent 6-9 months. The income can be from any source passive, active, consistent, inconsistent, social security or retirement benefits also. The tenure of 3 years arrives if the average income then realized, is lower than the state median. To get a fair idea of the state median, California state had a median of about $52,000 in the 2017s for an individual and about $80,000 for a family of four members. If your average income before filing bankruptcy exceeds the state median, the tenure will be for 5 years.

The payment plan will expire before three or five years only if you clear all your outstanding dues in full. The next step is to determine your minimum due. As per the Chapter 13 bankruptcy plan, the secured debts are prioritized and need to be paid in full. Other priority debts may include alimony, taxes, child support, mortgage interest, etc. These kinds of debts shall dominate the bulk of the minimum due payments. Apart from these, certain fees like attorney, filing and percentage fee for a trustee, etc., also need to be paid out fully.

How to calculate your disposable income?

If your average income in the last 6-9 months is below the state median, the unsecured debts might get released completely. This will hurt your credit score but your minimum due will constitute minimum due towards the priority debts and the secured ones. There are possibilities for loan trimming even for the secured debts, especially for the high depreciating assets like an automobile or similar assets. If your average income is over the state median, the disposable income has to be directed towards the unsecured debts. The disposable income is lower of 15% of the average income or the calculated disposable income.

The calculation of disposable income is straight forward. The state and federal standards for all basic amenities have been provided and one can deduct only the standard amount irrespective of the actual expenditure for determining disposable income. The difference between your average income and the standard deductions will give you your disposable income. For instances, in Los Angeles, the cap for transportation cost is $189, if you do not own/use your own vehicle. It is $300 as an operating cost for people using their own cars. Similarly, the standard for a mortgage in case of a family of four is around $3,000. Food, clothing and other basic need expenses are also capped to about $650 as per federal standards. These are rough monthly standards, which are not the latest but give you a rough idea of what your disposable income could be. For more information or for any calculation help do not hesitate to reach out on +1 (888) 297 6203.

Getting your Chapter 13 payment plan approved

The bankruptcy court has to approve the proposed payment plan. Hence, it is important to put forward a practical plan forward that caters to best self-interest as well as the interest of the lenders. If the plan is not confirmed or approved, it holds no value. The bankruptcy trustee and lenders can object or force modifications in the plan if they are not convinced or satisfied. Automobile lenders or mortgage lenders are two prominent objection parties when putting forward the payment plan in the court. The bankruptcy trustee emphasizes on following of rules and will try to divert as much funds possible to the lenders during the process. So, if your plan satisfies your automobile and mortgage lender as well as compliant with the rules, it has a very high probability of getting approved.

How to avail Chapter 13 release of unsecured debt?

The bankruptcy court has certain guidelines in place for releasing an unsecured debt and it is not so straightforward. You need to complete all the payments, still be current on support debts like alimony, child support, etc., and also complete a financial management course that shall help you manage finances better and not be stranded here again. Additionally, you should have also not received a discharge of your debts in the recent 2 years in order to be eligible for the release of unsecured debt. If you comply with all these, the court shall release the unsecured debts and the lenders shall no longer be able to pursue you for their debts.

An important point however to be noted is that some debts like criminal fines, litigations, lawsuits, child support, student loan, compensation for injury or similar debts cannot be released by the bankruptcy court. These are priority debts and need to be paid off without deviation. For Chapter 13 cases, an attorney is a must and the best in business is just a call away. Dial +1 (888) 297 6203 now for the best solution to your bankruptcy problem!
*Are you more than 60 days past due on your mortgage?
YesNo

*Do you own a home?
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Are you currently working?
YesNo

By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.
July 18, 2019
Bankruptcy Basics of Chapter 9

The bad financial situation can affect not just individuals but also organizations (both government and private). However, the rules for getting a fresh start differ slightly in both cases. While consumers can opt for Chapter 7 or Chapter 13 bankruptcy to get their debts discharged, Chapter 9 bankruptcy helps municipalities (cities, towns, villages, counties, taxing districts, municipal utilities, and school districts) reorganize their debts. This bankruptcy chapter helps protect debt-ridden municipalities from creditors, while a reorganization plan is being developed for adjusting their debts. Reorganization mainly takes place by extension of debt maturities, reduction of the principal or interest amount or by getting the debt refinanced by taking out a new loan.

Though it may seem similar to other bankruptcy chapters, lawyers of Dallas based bankruptcy firm Recovery Law group elaborate that it is significantly different as no liquidation of assets takes place to pay off creditors in this case. Even the bankruptcy court plays a limited role in chapter 9 cases. Its role is restricted to:

 Approval of petition (in case the debtor is eligible);
 Confirmation of the debt adjustment plan;
 Ensuring that the plan is implemented
Eligibility for Chapter 9 bankruptcy

A municipality is defined as a “public agency, political subdivision, or instrument of a State.” This includes school districts, townships, counties, and even cities, apart from revenue-generating bodies like highway authorities, bridge authorities and gas authorities. Since only a “municipality” can file under Chapter 9 from financial relief, it is important that they consult the opinion of expert bankruptcy lawyers by calling 888-297-6023 to discuss particulars of their case. The additional eligibility requirements for a Chapter 9 bankruptcy case include:

1. The municipality must be specifically authorized to be a debtor by either a State law or a government officer or organization empowered by State law’
2. The municipality must be insolvent;
3. A municipality must desire to plan to adjust its debts;
4. The municipality must either:

a. Obtain creditors’ agreement holding at least a majority in number of claims of each class that the debtor intends to impair under a plan under chapter 9;
b. Negotiates in good faith with creditors and fails to obtain the agreement of creditors holding at least a majority in number of claims of each class which debtor intends to impair under the plan;
c. Be unable to negotiate with creditors as such negotiation is not practical; or
d. Believe reasonably that a creditor might get a preference.

What happens during Chapter 9 bankruptcy?

Municipalities need to seek protection under Chapter 9 of the Bankruptcy Code. They also need to file a list of creditors. Though the debtor should provide the creditors’ list at the time of filing, in this case, bankruptcy court allows the option to provide it at a different time. The case is not assigned automatically to any judge to avoid any political interference in the case of Chapter 9 bankruptcy. A notice of commencement of the case and the order for relief is essential. This notice is published at least once a week for three consecutive weeks in a newspaper having general circulation in the district where the case begins as well as in other newspapers which are generally used by bond dealers and bondholders. The newspapers in which notice and additional notice is published and who gives or receives notice by mail is a prerogative of the court.

The bankruptcy court also allows objections to the petition including –
 Whether negotiations were conducted in good faith,
 Whether the state has authorized a municipality to file,
 Whether the petition is filed in good faith.

In case an objection is filed against the petition, a hearing on the objection is held by the court. In case the petition is not filed in good faith or does not meet the requirements of Chapter 9, it can be dismissed by the court. If the petition is not dismissed on any objections, Bankruptcy Court needs to order relief and allows the case to proceed under Chapter 9.
Just like other bankruptcy cases, an automatic stay is applicable in this case too. In fact, additional automatic stay provisions prohibit any action taken against officers and inhabitants of the debtor if they seek to enforce a claim against the debtor. The stay refrains a creditor from bringing a mandamus action against any officer of the municipality; against an inhabitant of the debtor to enforce a lien on or arising out of taxes owed to the debtor.

A proof of claim or interest needs to be filed within the stipulated time frame. It is considered filed in case of Chapter 9 if it appears on the list of creditors filed by the debtor. In case it appears disputed, contingent, or unliquidated, then a creditor needs to file a proof of claim. The court, according to Bankruptcy Code Sections 903 and 904, the court has limited power over operations of the debtor. It cannot interfere with political powers, property or revenues of the debtor as well as the debtor’s use of its property and revenues.
The role of the trustee is limited. They do not preside over a meeting of creditors (it is not held), cannot convert the case, do not supervise the administration of the case, and do not monitor financial operations of the debtor too. The role of creditors is also limited in this case, since there is no meeting of creditors. They can, however, choose and authorize attorneys and accountants to represent the committee, consult with debtors regarding the administration of the case, investigate the conduct, asset, liabilities and financial condition of the debtor and formulate a plan for the cumulative interest of all creditors.

Discharge in chapter 9
A plan for adjustment of debts must be filed by the municipality to adjust their debts. The plan is confirmed if it meets the statutory requirements. A discharge is available for municipal debtor on confirmation of debt adjustment plan; a deposit made by the debtor is distributed as per the plan by disbursing agent appointed by court and determination by the court that securities deposited constitute valid legal obligations of the debtor. Exceptions to the case also exist for –
 Any debt excepted from discharge by plan or order confirming the plan;
 Any debt owed to an entity before confirmation of the plan, who had no notice or knowledge of the case.

July 11, 2019
What Happens if You Forget to Include a Creditor in Your Bankruptcy?
A lot of paperwork is involved when you file for bankruptcy, including documentation for your income, assets, and a comprehensive list of your debts as well as your creditors. This complete list of creditors is used by the court to inform everyone concerned about your bankruptcy. Since all of this involves a lot of paperwork, it is quite possible that one or two creditors might miss making the list. Since creditors also have legal rights in your bankruptcy case, if any of them fails to get a mention in your list of creditors while filing for bankruptcy, what effect can it have on your case?

What is the creditor mailing list?

According to Los Angeles based law firm Recovery Law Group, the “Creditor Mailing List” (also known as the mailing matrix) should include all your creditors along with their contact information. It must also include debts like student loan debt which are not handled via bankruptcy. Once you file for bankruptcy, this mailing matrix is used to inform all creditors of it. This is an important step as creditors wish to be kept in the loop when such an occurrence happens.

The creditors, depending on which chapter of bankruptcy you file, might be involved in the confirmation of your debt, or pay-out of your liquidated assets, or might be required to approve the repayment plan. To be eligible for their repayment portion, they are required to file a “proof of claim.” If they have no information about your bankruptcy, they cannot file a proof of claim and thus will lose their chance of getting payment from your bankruptcy.

The creditor mailing list is an integral part of your case. When you file for bankruptcy, you get automatic stay protection which effectively ceases all collection actions by creditors. Unless the creditors are aware of your bankruptcy, they will not follow automatic stay. Thus you might lose wages to garnishment or have your home foreclosed or face a lawsuit for collection if you miss out any creditor on the creditor mailing list. Additionally, omitting a creditor can affect your bankruptcy too! The bankruptcy forms are filed under a penalty of perjury, i.e. leaving any information off the papers intentionally is considered a crime. The unintentional omission is understood by the court and you are given a chance to rectify your mistake. If you have unintentionally left any creditor off from the mailing list, the consequence depends on which chapter of bankruptcy you have filed.

Adding creditor in Chapter 7 bankruptcy

In Chapter 7 bankruptcy, also known as liquidation bankruptcy, your non-exempt assets are surrendered to the court which is then sold off to pay the creditors. Many times, thanks to state and federal exemptions, debtors have little to no non-exempt assets; such cases are known as “no asset” bankruptcy cases. When some non-exempt property is available, which can be sold off to pay creditors, the bankruptcy is known as an “asset” bankruptcy. In case you forget to include a creditor in the creditor mailing list while filing for Chapter 7 bankruptcy, the outcome depends on whether it is an asset or no-asset bankruptcy.
- Asset bankruptcy
When you have non-exempt assets, unsecured creditors get paid in proportion to the amount you owe them, when they file a proof of claim. When you leave a creditor off the mailing list, they won’t be notified of bankruptcy and subsequently will not be able to file proof of claim, thereby losing out on their repayment amount. Any unsecured creditor who is left out of their rights can go after you to collect the dues after a bankruptcy discharge. The only respite you have in this case is that they can collect dues only from non-exempt assets. Chapter 7 bankruptcy exemptions can help save a number of your assets. Secured creditors, if they are left out of creditor mailing list, have rights to pursue collection actions against you after your bankruptcy discharge.
- No asset bankruptcy
In this case, since there are no non-exempt assets, the unsecured creditors (credit card, medical bills, personal loans, etc.) do not get anything in bankruptcy. Since unsecured creditors do not have any property attached to their debt, they don’t have any proof of claim to file. If you accidentally forget to add an unsecured creditor’s name to the list, not much of consequence happens in this particular case. As is the case with no asset bankruptcy, unsecured creditors, listed or not, get nothing in such cases. The debt gets discharged with creditor having no claim to collect.

Consequences of leaving a secured creditor out of the creditor mailing list are far more serious than leaving an unsecured creditor out. You can face collection actions after a bankruptcy discharge. Secured debts which are linked to the property are not discharged during bankruptcy but can be surrendered or reorganized. All of this requires the involvement of the creditor. If you wish to reaffirm your car loan, you need to make payments through and even after your bankruptcy. If you miss adding the name of your auto lender or any other secured creditor off the mailing list, the debt won’t be discharged and the creditors are eligible to collect the payment even after your bankruptcy, which may include foreclosure and/or repossession of said property.

Certain debts like child and spousal support, government taxes, etc. are not discharged during bankruptcy. Since these debts won’t be discharged, the accidental omission of such debts will not have any effect on your bankruptcy case. They were and remain collectible even after bankruptcy. Since a majority of Chapter 7 cases are no asset cases, there aren’t any major consequences of the accidental omission of a creditor.

What happens if you fail to add a creditor in Chapter 13 bankruptcy?

Creditors have more involvement in a Chapter 13 bankruptcy compare to a Chapter 7 case. They have a say to review, object or approve your repayment plan. If and when your repayment plan is approved, the payments are divided amongst your creditors proportionately. If you fail to include a creditor in this type of bankruptcy, the debt won’t be included and therefore not discharged at the end of your bankruptcy. This leaves the creditor free to attempt collecting the debt after your bankruptcy discharge.

Options available for you if you forget to add any creditor when you file for bankruptcy

Irrespective of the type of bankruptcy filed, if you realize you have unintentionally omitted any creditor, you should contact and inform your bankruptcy attorney of it. They can help guide you on ways to fix the mistake. If you haven’t reached the end of your bankruptcy, filing a form in bankruptcy court to add the missing creditor can help get the problem solved. In case you have got your bankruptcy discharge and get a collection notice from a left out creditor, you need to contact your bankruptcy attorney. Depending on the type of bankruptcy you had filed, the lawyer can find out if the creditor has any right to collect dues or not. An unsecured creditor trying to collect dues from you has no right to them if you filed for a no-asset Chapter 7 bankruptcy. The creditor can be informed by the lawyer of the case in such a situation. If that is not the case, the bankruptcy lawyers can assess whether different factors like the statute of limitation can affect your dues to the creditor.

If you remember to have left out a creditor, contact your bankruptcy attorney immediately. Wilful omitting of a creditor is considered a form of perjury, which can lead to the filing of criminal charges and even dismissal of your bankruptcy case. Bankruptcy can be trying times, emotionally and financially. It is important to have a bankruptcy attorney by your side in such cases. If you don’t have one, feel free to call 888-297-6203 to get your case evaluated.
*Are you more than 60 days past due on your mortgage?
YesNo

*Do you own a home?
YesNo

Are you currently working?
YesNo

By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.
July 9, 2019