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New Braunfels Bankruptcy LawyerOriginally published: February 28, 2020 -- Updated: December 2, 2021

UPDATE: In addition to understanding how filing for bankruptcy may affect ownership of a vehicle, a debtor will want to determine whether they can use a “cramdown” to reduce the amount they owe on an auto loan while addressing other debts during the bankruptcy process. This option is available in a Chapter 13 bankruptcy, and it can ensure that a person will avoid the potential loss of their vehicle while still being able to make affordable payments.

A cramdown is a reduction in the amount owed on an auto loan. A debtor may be eligible for a cramdown if the remaining amount that they owe to a lender is greater than the actual cash value of the vehicle. In addition, the debtor must have originally purchased the vehicle at least 910 days before filing for bankruptcy. For example, if $20,000 is owed on a loan, but the car’s market value is $13,000, the amount of the loan may be reduced to $13,000. The remaining $7,000 will be classified as an unsecured debt and included in the debtor’s Chapter 13 repayment plan. By reducing the amount of this loan and discharging other debts, a person can ensure that they will be able to maintain financial stability and avoid the loss of their vehicle.

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san antonio bankruptcy lawyerIf you have significant debts that you are struggling to repay, bankruptcy may be your best option for regaining financial security and ensuring that you will be able to address your ongoing needs going forward. By filing for bankruptcy, you can put a stop to harassment from creditors and prevent collection actions such as wage garnishment, repossession of property, or home foreclosure. You can then determine your best options for receiving relief from the debts you owe. 

One of the most important steps during the bankruptcy process is the “meeting of creditors,” which is commonly known as the “341 meeting,” since it is addressed in section 341 of the U.S. Bankruptcy Code. This meeting usually takes place at a bankruptcy court, and it will be conducted by the trustee assigned to the bankruptcy case. While creditors or their legal representatives may be present at this meeting, in many cases, they do not choose to attend. By understanding the issues that will be addressed during the 341 meeting, you can make sure you are properly prepared, and you can avoid any issues that may affect your ability to complete the bankruptcy process.

Questions Asked During the 341 Meeting

The purpose of the 341 meeting is to verify the facts of your bankruptcy case and ensure that you have provided the correct information that will allow you to complete the bankruptcy process. During the meeting, the bankruptcy trustee will verify your identity and other personal information, such as your home address and the address of your employer. You will need to provide documents that confirm your identity, such as your driver’s license and Social Security card. You may also need to provide documentation to verify your employment, such as a pay stub or W-2 form.

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San Antonio Bankruptcy LawyerDebts are a reality for most Americans, and while most people are able to make ongoing payments, some may experience financial difficulties that make it difficult to pay back what is owed. If you have gotten behind on payments, you may have begun receiving calls from creditors. Debt collectors can sometimes take aggressive actions to attempt to recover money, and if you have experienced harassment by creditors, you will want to determine the best ways to address this issue. A skilled bankruptcy lawyer can advise you of your options and work with you to determine the forms of debt relief that are available.

Debtor Rights Under the Fair Debt Collection Practices Act

Federal laws dictate the rights of consumers and the restrictions that apply to creditors who attempt to collect debts. The Fair Debt Collection Practices Act (FDCPA) ensures that debtors are protected from harassing behavior such as:

  • Making threats - Creditors cannot threaten to use physical violence, and they are prohibited from using obscene or abusive language. They are also restricted from threatening to ruin your reputation or otherwise attempting to defame you to employers, family members, or people in your community.

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san antonio bankruptcy lawyerWhen a person or family is struggling to pay the debts they owe, bankruptcy can be a good option for eliminating debts or repaying some debts while avoiding issues such as foreclosure. Different types of debts may need to be addressed during the bankruptcy process, and a person will need to understand how their obligations to pay child support or spousal support will be affected. Determining the role that bankruptcy will play as they make ongoing support payments or address unpaid payments can ensure that a person will be able to maintain financial stability going forward.

Bankruptcy and Domestic Support Obligations

Bankruptcy will allow some debts to be discharged, meaning that the debtor will no longer be required to pay what is owed. However, domestic support obligations, including child support and spousal support, cannot be discharged through bankruptcy. A person will be required to meet any support obligations ordered by a family court, and any past-due payments will need to be made up, along with any interest that may apply.

For those who pass the means test, Chapter 7 bankruptcy can provide the best form of relief for certain types of debts. Credit card debts, medical bills, and other unsecured debts may be discharged once the bankruptcy process is completed. In some cases, certain assets may need to be turned over and liquidated, but a no-asset bankruptcy may be possible, and many assets will be exempt from liquidation. While Chapter 7 bankruptcy will not eliminate a person’s family support obligations, the elimination of other types of debts can help ensure that they will be able to make ongoing support payments. 

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San Antonio Bankruptcy Attorney

While most people understand that bankruptcy is an option for eliminating debts, there are a lot of misconceptions about the bankruptcy process, the laws that apply to those who file for bankruptcy, and the ways filing for bankruptcy will affect a person’s life. By understanding exactly what the bankruptcy process entails, a person can determine whether it may be the best choice in their situation. Those who have outstanding debts that they are having trouble repaying can work with an attorney to determine their options for receiving relief.

Bankruptcy Myths and Misconceptions

Some of the most common bankruptcy-related misunderstandings include:

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