Here, you will find educational information that
will give you further insight on bankruptcy even before completing the
pre-filing counseling session. Although
Bankruptcy Education is designed to provide information that will help you
decide whether or not bankruptcy is the right choice for you, the information
provided through this education program is not legal advice and not intended to
take the place of guidance and advice from an attorney.
What is Bankruptcy?
Bankruptcy is a legal proceeding filed in the United States Bankruptcy Court that permits you to obtain a discharge of your obligation to pay certain debts. The bankruptcy laws are intended to allow an honest but unfortunate debtor an opportunity to get a "fresh start". Most people who opt to file for bankruptcy do so with the assistance of a legal professional.
The two most common types of consumer bankruptcy are Chapter 7 and Chapter 13.
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Bankruptcy Prevention and Consumer Protection Act of 2005
On April 20, 2005 President Bush signed
the Bankruptcy Prevention
and Consumer
Protection Act into law. This
new legislation consists of checks and balances to ensure consumers are making
better informed decisions when it comes to filing bankruptcy. The law requires all Chapter 7 or 13 bankruptcy petitioners to participate in credit counseling and provide the
court a certificate of completion from a U.S. Trustee-approved non-profit credit counseling agency. It also requires all consumers who file for bankruptcy to successfully complete a U.S.
Trustee-approved debtor education course prior to discharge of their debts.
 You can read more on the Bankruptcy Prevention and Consumer Protection Act here.
Means Test
Another change enacted by the Bankruptcy Abuse
Prevention and Consumer Act of 2005 is the requirement of a means test. It is
used to identify debtors who have the financial capacity to pay some money to
their creditors. The means test compares the income of the petitioner
to the median income in their state. Based upon this test, certain petitioners may be required to repay a
portion of their debt under Chapter 13 instead of a complete dissolution under
Chapter 7. An attorney can conducts the
means test for those filing bankruptcy.
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Chapter 7 Bankruptcy
Under Chapter 7 Bankruptcy, a Trustee is appointed to sell or liquidate any of the debtor's "non-exempt" assets or property in order to raise cash to pay off the debt.
"Exempt" assets are property of the debtor that the law specifically allows the debtor to keep. "Non- exempt" property includes assets or belongings that are not considered protected under bankruptcy law. Consumers must provide detailed financial information when filing bankruptcy so the court can determine which assets may be sold.
Although many unsecured debts may be discharged in a Chapter 7 bankruptcy, not every type of debt is dischargeable. Once a petitioner files for a Chapter 7 bankruptcy, creditors will cease efforts to collect on dischargeable debts.
A Chapter 7 bankruptcy will remain on your credit report for 10 years.
Chapter 13 Bankruptcy
In a Chapter 13 Bankruptcy, an individual with regular income repays all or a portion of his or her debts over a three-to-five-year period through a monthly payment plan approved by the Bankruptcy Court. For that reason, a Chapter 13 case is sometimes referred to as a "wage-earner plan". The Chapter 13 Trustee does not take possession of non-exempt assets but supervises the case
and administers the
payments to creditors under the Chapter 13 plan.
This type of bankruptcy will remain on your credit report for 7 years.
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Major differences between Chapter 7 & 13 Bankruptcy
The major difference between a Chapter 7 and 13 is the "repayment plan". A Chapter 13 bankruptcy allows debtors with steady income to pay off all or some of the debt within a given time period. A Chapter 7 bankruptcy requires no payment plan, but the surrender of the debtors non-exempt assets to a court Trustee for liquidation of the items.
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Although bankruptcy is designed to give debtors a "fresh start", the impact of bankruptcy will vary with individual circumstances, and the consequences will be greater for some than for others. Depending on your personal situation and the laws of your state, you may have to liquidate some of your property and assets. A bankruptcy filing will become part of your credit report
for up to 10 years
and will make it more difficult to rent an apartment, buy or rent a car, or even buy insurance, because you will be considered a higher risk in any transaction that involves credit or requires you to make a regular series of future payments. There is a good chance that your credit cards will be cancelled if you file for bankruptcy, which may complicate otherwise routine transactions that require a credit card for a deposit or as a form of security. And, because bankruptcy is a matter of public record,
you have to consider whether it might carry a stigma in your community or interfere with employment prospects in your chosen field.
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Bankruptcy
In
order to make better informed decisions regarding bankruptcy, consumers must arm
themselves with objective, factual information.
Consumer Credit Counseling Service of Greater San Antonio
(CCCSSA) and Budget
& Credit Solutions (BCS) are both approved by the Executive Office of the
U.S. Trustee (EOUST) to provide bankruptcy petitioners the required pre-filing
counseling session and pre-discharge education course. Both agencies will
provide the consumer with certificates of completion issued by
EOUST.
*Approved to issue certificates in compliance with
the Bankruptcy Code. Approval does not endorse or assure the quality of an
Agency's services. These services may be available for free or at a rate based
on the debtor student's ability to pay.
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Position on Bankruptcy
CCCSSA counselors do not answer legal questions about bankruptcy, or advise anyone to file for bankruptcy. This decision is made by each person after consultation with an attorney. CCCSSA counselors provide impartial and accurate information. The CCCSSA staff does not refer consumers to attorneys or attorney offices.
Below you will find the cost and description of the required bankruptcy program. We provide free counseling and education to consumers who are receiving free legal services from their attorney or are receiving Social Security Disability income payments. If you believe you qualify for free services under one of these categories, please notify our agency for instructions on how to provide
proof of your qualifications.
The counseling and education charges (per household) is:
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*Bankruptcy Fees Per Household Filing:
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Pre-Filing Counseling Session-online
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$50.00
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Pre-Filing Counseling Session-in
person/telephone
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$55.00
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Pre-Discharge Education Course-online
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$50.00
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Pre-Discharge Education Workshop-classroom
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$40.00
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Click here to begin the Bankruptcy Pre-Filing Counseling process online.
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