There are two required counseling sessions that must be completed by every Debtor prior to receiving a discharge of their debts.
We often have clients call us advising that they have received a document from the bankruptcy court titled “Notice of Missing Documents to Individual Debtor.”
This notice generally relates to the filing of the certificate of completion for the “pre-discharge” or “financial management” course.
We don’t ever want you to ignore any notice you receive in the mail, but we would ask you to keep in mind the deadlines for filing the certificate.
The certificate of completion for the financial management course must be filed with the bankruptcy court within 60 days after the date first set for the meeting of creditors in a Chapter 7 case, as required by Rule 1007(c) of the Federal Rules of Bankruptcy Procedure.
In a Chapter 13 case the certificate of completion must be filed before the Debtor makes their last payment under their Chapter 13 Plan.
When we correspond with our clients to complete the financial management course we would ask that you complete the course without delay, but please do not panic over the notice received from the bankruptcy court.
Many times these notices are generated prior to the meeting of creditors, so you have a sufficient period of time to complete the course.
PAYING WITH AUTOMATIC DEBITS AFTER FILING FOR BANKRUPTCY
If you have car payments or other payments being made to a secured creditor by way of an automatic debit from a bank account, you will need to make arrangements with the creditor to pay them by other means once you have filed for bankruptcy.
Creditors will not continue auto debits after you have filed for bankruptcy, because to do so would violate the automatic stay that is entered upon filing for bankruptcy protection.
Creditors often will also not accept online payments after you have filed for bankruptcy and will cease sending billing statements.
It is important to contact the creditor by telephone and ascertain from the creditor how you should get payment to them.
Be certain to get a full name of the person you are contacting, and most importantly, make certain that you keep a verifiable proof of any payments that you make to creditors.
In a Chapter 7 bankruptcy filing car creditors will most of the time reinstate auto debits from your bank account after you have signed a Reaffirmation Agreement and/or have been discharged.
Texas Property Code Section 52.001 provides that an abstract of judgment when recorded and indexed in a county in which a judgment debtor owns real property creates a valid judgment lien on that property, unless the real property is exempt from seizure or forced sale.
This judgment lien also attaches to property acquired after such recording and indexing, according to the plain language of the statute.
There are three steps to securing ad maintaining a valid judgment lien against a judgment debtor. TAPPS, L.L.C. v. Nunez Co., 368 B.R. 575, 577 (W.D. Tex 2005).
First, the judgment creditor must obtain and file an abstract of judgment in accordance with Chapter 52 of the Texas Property Code. Id.
Second, the judgment must be kept alive through the issuance of a writ of execution. Id. Texas Civil Practice & Remedies Code Section 34.001(a) provides that a judgment becomes dormant and may not be executed on unless a writ of execution is issued within ten (10) years after the rendition of the judgment.
Finally, if the judgment is not satisfied within ten (10) years of the recording and indexing of the abstract, then a subsequent abstract must be obtained and filed in accordance with Chapter 52 of the Texas Property Code. TAPPS, L.L.C at 577.
If a judgment creditor obtains a judgment against you prior to the filing of a bankruptcy case and properly perfects their lien by meeting the above requirements, then their judgment lien “passes” through bankruptcy and remains a valid lien.
Stated another way, the Debtor’s personal liability can be discharged in bankruptcy, but the lien survives the discharge.
If the lien has not attached to property prior to the filing of a bankruptcy petition, then even though Section 52.001 of the Texas Property Code applies to after acquired property, the judgment creditor cannot create a valid lien after a bankruptcy filing because the underlying debt has been discharged.
The key for the judgment creditor is to file the abstract prior to the bankruptcy and for the lien to attach to property owned by the Debtor at the time of the bankruptcy filing, which of course would exclude the Debtor’s homestead property.
As always, any opinions expressed on this website are just that, opinions. So if you have a question regarding bankruptcy or debt relief, then please give me a call to discuss your individual situation. Bankruptcy, as many other areas of the law, can be very case or fact specific. I pride myself on giving you the answers to your questions that are based on your individual circumstances.
JOB DISCRIMINATION NOT ALLOWED AS A RESULT OF BANKRUPTCY
A governmental unit may not deny, revoke, suspend or refuse to renew a license, deny employment to, terminate the employment of, or discriminate with respect to employment against a person who has sought protection under the Bankruptcy Act (11 U.S.C. Sec. 525(a)).
Private employers may not terminate the employment of or discriminate with respect to employment against a person who has sought protection under the Bankruptcy Act (11 U.S.C. Sec. 525(b)).
Discrimination Must Be Based Solely on Bankruptcy Filing
The anti-discrimination statute under the Bankruptcy Act requires that the discrimination be based solely on the fact that person discriminated against is or has been a debtor under the Act. White v. Kentuckiana Livestock Mkt., Inc., 397 F.3d 420 (6th Cir. 2005) (Court concluding that Debtor must show that their termination of employment was based solely on the filing of bankruptcy).
So, if the employer bases the termination on factors other than a bankruptcy filing, the employee debtor does not have any remedy against the employer. In Re Banner, 422 B.R. 608, 612 (Bankr. N.D. Tex. 2009).
Private Employer Refusal to Hire
A public or governmental body cannot refuse to hire someone based solely on the fact that the individual has sought protection under the Bankruptcy Act. Section 525 reads differently for a private employer and does not expressly prohibit the denial of employment, specifically omitting the phrase “deny employment to” when listing the prohibitions of private employers.
At least one Texas court has concluded that Congress acted intentionally and purposely in refusing to use the same language with private employers as with governmental bodies.
Burnett v. Stewart Title, Inc., 431 B.R. 894, 897-898 (S.D. Tex. 2010). The court concluded that the private employer did not violate the statute when it denied employment to a prospective employee based on a previous bankruptcy filing. Id. at 901.
The court in Burnett refused to follow the analysis in Leary v. Warnaco, 251 B.R. 656 (S.D.N.Y. 2000), where the court concluded that the phrase “with respect to employment” in Section 525(b) precluded discrimination against prospective private-sector employees.
The majority view of the courts has been that Congress in Section 525(a) specifically precluded public employers from denying employment to a prospective employee based solely on a previous bankruptcy filing, but specifically excluded the phrase “deny employment” in Section 525(b).
The Third Circuit in Rea v. Federated Investors, 627 F.3d 937 (3rd Cir. 2010) concluded that a private employee does not have a claim against a private employer based on the employer refusing to hire because the employee has previously filed for bankruptcy. The U.S. Supreme Court denied the writ of certiorari in Rea on October 3, 2011.
Summary
While governmental bodies may not deny employment to prospective employees based solely on a previous bankruptcy filing, it appears Congress did not intend to provide the same protection to private-sector employees. Any discrimination based on a bankruptcy filing must be the “sole” reason for the employer treating an employee in a disparate manner.
So, if the employer articulates a reason for treating the employee in a discriminatory manner, whether it be a private or public employer, which is based on something other than a bankruptcy filing, then there is no violation of the statute.
As always, any opinions expressed on this website are just that, opinions. So if you have a question regarding bankruptcy or debt relief, then please give me a call to discuss your individual situation. Bankruptcy, as many other areas of the law, can be very case or fact specific. I pride myself on giving you the answers to your questions that are based on your individual circumstances.
The term “Cram Down” commonly refers to the procedure by which a Chapter 13 debtor pays a car creditor the value of a vehicle at the time of the filing of a Chapter 13 plan or reorganization, as opposed to what the car creditor is actually owed.
This process under current bankruptcy law is generally now limited to a vehicle that was purchased for personal use and more than 910 days prior to the filing of the bankruptcy.
The limitation on cram down does not apply where a vehicle is owned outright and the owner borrows money against the equity in the vehicle.
The security interest that the creditor takes in this type of financing arrangement is known as a “non-purchase money security interest.”
A debtor can cram down a vehicle where the car creditor has a non-purchase money security interest.
The ability to cram down can be of significant benefit to a debtor reorganizing their debt under Chapter 13.
As always, any opinions expressed on this website are just that, opinions. So if you have a question regarding bankruptcy or debt relief, then please give me a call to discuss your individual situation. Bankruptcy, as many other areas of the law are very case or fact specific. I pride myself on giving you the answers to your questions that are based on your individual circumstances.
I frequently tell clients that have filed for Chapter 13 or Chapter 7 bankruptcy protection that there is life after bankruptcy.
Contrary to the misconception that bankruptcy ruins you for life, I often see clients in better financial condition a short time after receiving a bankruptcy discharge.
I have said it before, there is nothing honorable in dodging your creditors.
It is better to send a message to the creditors through the legal process of bankruptcy that you cannot pay them. The alternative is to have a credit report filled with charge-offs, repossessions and foreclosures.
There are some suggestions for things you can do to rebuild your credit worthiness after having filed for bankruptcy.
The most obvious is to pay those creditors that you have agreed to pay in the Chapter 13 or have reaffirmed their debt in a Chapter 7.
If you have signed a reaffirmation agreement with a creditor on a vehicle in Chapter 7 it is critical that you make your payments in a timely manner.
Other things you can do to rebuild your credit:
Open a checking and savings account if you don’t already have them established and in good standing. Do your homework and find a bank that has the services you need and does not hit you with outrageous fees and minimum deposit requirements.
Obtain a secured credit card after you have received your bankruptcy discharge. To obtain a secured credit card you will place a deposit with the credit card company and will use the card like any other major credit card. Maintain a small debt to credit ratio on the card and make sure that you timely make the payments. If you have $250.00 on deposit, then don’t let the balance go higher than $50.00. Don’t pay the huge start-up fees for secured cards and make sure that they report to the three major credit bureaus. One site that you might visit for secured credit card options is CreditCards.com.
After you have established yourself with a secured card, then apply for a retail or gas credit card. Gas cards are the best idea because gas is a necessity for most people and you want be tempted to spend money that you don’t have.
Also, once you have maintained a secured card in good standing for 12 months, then see if the bank will allow you to convert to an unsecured card. Do not use the secured card or unsecured card for any other purpose other than to rebuild your credit. In other words, pay the balance off at the end of the month. You need to learn to live within your means.
Monitor your progress if you are trying to rebuild after bankruptcy. Wait at least three months after you have received your discharge and obtain your one annual free report at AnnualCreditReport.com. Dispute any mistakes associated with your report and use Credit.com’s free credit score to monitor your score for free on a monthly basis. I suggest that you make any disputes in writing and mail by certified mail to the bureau. The bureau has thirty (30) days to respond to your complaint.
Put a budget together and have a place for every dollar. Dave Ramsey has an incredible number of resources available to those who want to properly manage their money. Visit DaveRamsey.com or attend one of Dave Ramsey’s Financial Peace University events being held in your area.
Because God has blessed me with the opportunity to practice law, and more specifically, to practice in an area where I help people in financial distress, I would like to share with you a few scriptures from God’s word that I believe might encourage you (all quotations from the New International Version):
“I know that the Lord secures justice for the poor nd upholds the cause of the needy.” Psalm 140:12
“I will repay you for the years the locusts have eaten…” Joel 2:25
“Do not be anxious about anything, but in everything, by prayer and petition, with thanksgiving, present your requests to God. And the peace of God, which transcends all understanding, will guard your hearts and your minds in Christ Jesus.” Philippians 4:6-7
“Better a poor man whose walk is blameless than a rich man whose ways are perverse.” Proverbs 28:6″
“But the needy will not always be forgotten, nor the hope of the afflicted ever perish.” Psalm 9:18
As always, any opinions expressed on this website are just that, opinions. So if you have a question regarding bankruptcy or debt relief, then please give me a call to discuss your individual situation. Bankruptcy, as many other areas of the law, can be very case or fact specific. I pride myself on giving you the answers to your questions that are based on your individual circumstances.
