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IL bankruptcy lawyerThe United States Bankruptcy Code allows for different types of bankruptcy under certain circumstances. Only some of these are available to individuals, with the two most common types of bankruptcies being Chapter 7 and Chapter 13 bankruptcies. Even though the steps taken to discharge debts are different, both Chapter 7 and Chapter 13 bankruptcies must take a few common steps. One of those steps is the meeting of creditors, also known as the “341 meeting of creditors” or the “341 hearing” after the portion of bankruptcy code it is written into. No matter the type of bankruptcy you end up filing for, understanding the steps of the bankruptcy process are important.

What Is a 341 Meeting of Creditors?

In most cases, you will not have to appear in court before a judge to complete your bankruptcy. One of the most important steps of the bankruptcy process is the 341 meeting of creditors, which typically takes place in a courthouse, with a trustee presiding over the hearing, rather than a judge. The purpose of the meeting of creditors is essentially for the bankruptcy trustee to verify your identity, ensure your forms are filled out correctly and that all of the information given is accurate.

What Will Happen During the Meeting?

At your meeting of creditors, your trustee will likely also have scheduled other cases to be heard at the same time. Once your name is called, your trustee will ask you to verify your identity before beginning. Once you have done that, the trustee will then have the opportunity to ask any questions pertaining to your finances, such as whether or not you are expecting any sources of income in the future, such as inheritance. Your trustee may also ask you to verify information about your job, income, assets, and other information they wish to clarify. Your creditors, or the entities you owe money to, are notified of the hearing and have the opportunity to appear at the hearing and ask questions relating to your financial situation, though this is uncommon.

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When you are swimming in debt, ignoring phone calls from creditors, facing a repossession or foreclosure, and your mailbox is filling up with lawsuits and letters from collectors, it can feel as though your life is spinning out of control. But, is bankruptcy really the right debt solution for you? And if it is, which personal bankruptcy option should you choose? While there are a number of factors to consider in reaching the answers to those questions, and a qualified attorney is best suited to guide you, the following information on bankruptcy basics will help you understand the basics.

Common Types of Personal Bankruptcy

Both Chapter 7 and Chapter 13 bankruptcies allow you to manage or eliminate unsecured debts and stop the proceedings of foreclosures, garnishments, repossessions, utility shutoffs, and debt collections. However, child support, alimony, fines, some types of back taxes, and most student loan debts may be exempt, leaving you still obligated to pay them. Additionally, both may allow you to keep certain assets (within your state’s maximum valuation), such as a car or primary residence. But, this is where the similarities for the types of bankruptcies end.

In a Chapter 7 bankruptcy, sometimes known as “straight bankruptcy,” you will be required to sell all non-exempt assets, including (but not limited to) vehicles, work-related tools, basic household furnishings, and additional properties. In some cases, this sale must be completed by a court-appointed trustee. In others, the items may need to be turned over to the creditor. Once your bankruptcy is discharged, you must wait another eight years before you can file again.

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TX bankrutpcy lawyer, TX bankruptcy attorney, Many people share intimate details of their lives on social media — vacations they take, places they shop, purchases they make, and even what they wear. Unfortunately, this form of sharing can sometimes have legal repercussions. For example, angry posts about your soon-to-be ex-spouse can find their way into your divorce case. Similarly, social media posts that depict a financial situation that is different from what you have claimed in bankruptcy filings could also cause serious problems. In fact, a high-profile example from a few years ago shows just how difficult things can be when you are not careful on social media.

Bankruptcy Filing and a Social Media Blunder

In 2015, the rapper 50 Cent filed for Chapter 11 bankruptcy protection. Right in the middle of it all, he posted several Instagram photos with loads of cash — one of a stack of money in his freezer, one in which bills were arranged to spell the word “Broke,” and one of him surrounded by stacks of cash on a bed. The rapper claimed the bills were props, such as those used in music videos, but his creditors and the judge were far from amused.

According to the New York Times, 50 Cent stated that the postings were essential to maintaining his appearance and securing his future. When his history of merchandising deals and “living large” were mixed with a number of failed business ventures and several lawsuits, it was understandably difficult to determine whether he was hiding assets or telling the truth. Because of this, his creditors asked for a reevaluation of his assets, and a judge pulled him back into court to speak about the matter.

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Texas bankruptcy lawyer, TX chapter 7 attorneyAt our firm, we help clients every day with questions and concerns about the bankruptcy process under the U.S. Bankruptcy Code. Our experience has shown us that bankruptcy proceedings are often misunderstood, and unfortunately, misinformation abounds among those considering filing for bankruptcy. If you are thinking about bankruptcy as an option for your situation, it is very important for you to fully understand the potential advantages and disadvantages, as well as what might happen after the proceedings are complete. With this in mind, here are three of the most common myths about bankruptcy, along with the truth about each one.

Myth # 1: My Employer Will Be Notified That I Filed for Bankruptcy

Financial struggles are embarrassing for many people, and the reasons are understandable. As a result, it might be humiliating for you if your employer were to be notified of your bankruptcy filing. The good news is that this myth—albeit common—is just that: a myth. The bankruptcy process does not involve any employer notification whatsoever unless you happen to owe a formal debt to your employer somehow—in which case your employer would be notified, but as a creditor. Bankruptcy filings are public record, which means they could technically be published by the press, but it is unlikely that your employer would have much interest in searching through such publications.

Myth # 2: I Will Never Get Credit for a for a Major Purchase Again

Filing for bankruptcy can certainly have a negative effect on your credit rating, but the effects are temporary. Your bankruptcy will not bar you from ever having the ability to secure credit for major purchases like a home or automobile. For most bankruptcy filers, the credit approval needed to secure a home loan would be possible in about two to three years from the date of their bankruptcy filing. Obtaining approval for car loans and credit cards generally take less than two years. What is most important in re-qualifying for credit is making sure that you are rebuilding your credit properly in the period following your bankruptcy filing.

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Texas chapter 7 lawyer, Texas chapter 13 attorneyBankruptcy is often seen as a last-ditch effort to overcome the financial burden that you may be experiencing. While this is typically the case, the level of debt that one may be in can vary greatly depending on their circumstances. Some may have no income and are struggling to pay basic bills, while others may have a steady income but have found themselves buried by exponential medical or credit card expenses. There are two common ways that Texans can file for bankruptcy: Chapter 7 and Chapter 13 bankruptcy. By looking at your unique circumstances, you can determine what type of bankruptcy filing is appropriate.

Chapter 7

When imagining what filing for bankruptcy looks like, people often imagine something along the lines of Chapter 7 bankruptcy. Also known as “liquidation bankruptcy”, this form of bankruptcy has the trustee sell the debtor's property and use the money collected to pay off their debts, as close to the total amount as possible - all remaining debts will be forgotten. This form of bankruptcy may seem preferable to some, since the process only takes about six months and some debts may be forgotten, but it is not available to all debtors. If the debtor’s income falls below the state’s median household income, which in Texas is $59,570, he or she is eligible to file for Chapter 7 bankruptcy. The debtor will not lose all of his or her assets during the bankruptcy process, since some personal property can be claimed exempt from the process.

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