Dealing with Creditors During the Bankruptcy Process

 Posted on April 11, 2024 in Bankruptcy

One of the most daunting aspects of facing financial hardship and considering bankruptcy is dealing with creditors. It is essential to understand your rights and the proper steps to take when communicating with creditors throughout the bankruptcy process. A Texas lawyer can help you effectively handle creditors as you go through your bankruptcy.

What is the Automatic Stay?

Once you file for bankruptcy in Texas, an automatic stay goes into effect. This legal protection prohibits creditors from continuing collection efforts, including phone calls, letters, wage garnishments, and lawsuits. The automatic stay provides a temporary reprieve, allowing you to focus on the bankruptcy process without the constant pressure from creditors.

Communicate with Your Bankruptcy Attorney

It is crucial to have legal representation when dealing with creditors during bankruptcy. Your attorney will guide you through the process, advise you on responding to creditors, and ensure your rights are protected. If a creditor contacts you directly, inform them that you have filed for bankruptcy and provide them with your attorney's contact information. Your attorney will handle all necessary communication with creditors on your behalf.

Keep Detailed Records

Throughout the bankruptcy process, maintain detailed records of all communication with creditors. If a creditor contacts you, document the conversation's date, time, and content. Keep copies of any letters or notices you receive from creditors. These records will be valuable if disputes arise or a creditor violates the automatic stay. Provide your attorney with copies of all correspondence to ensure they completely understand your situation.

Attend the 341 Meeting of Creditors

In Texas, the 341 meeting of creditors is a mandatory hearing that takes place shortly after filing for bankruptcy. During this meeting, the bankruptcy trustee and creditors have the opportunity to ask you questions about your financial situation and the information provided in your bankruptcy petition. It is essential to attend this meeting and answer questions truthfully. Your bankruptcy attorney will prepare you for the meeting and accompany you to ensure your rights are protected.

Know Your Obligations

While the automatic stay prevents creditors from continuing collection efforts, it is important to understand your ongoing obligations during the bankruptcy process. If you have secured debts, such as a mortgage or car loan, you must continue making payments if you wish to keep the property. Failure to do so may result in the creditor seeking permission from the court to proceed with foreclosure or repossession. Your bankruptcy attorney will advise you on your specific obligations based on your unique circumstances.

Be Honest and Transparent

Throughout the bankruptcy process, honesty and transparency are paramount. You must disclose all debts, assets, and financial information to your attorney and the bankruptcy court. Failing to provide accurate information can lead to serious consequences, including the dismissal of your bankruptcy case or even criminal charges. Your bankruptcy attorney will guide you in gathering the necessary documentation and ensuring that your petition is complete and accurate.

Contact a Kerrville, TX Bankruptcy Lawyer

Dealing with creditors during your bankruptcy process can be overwhelming, but understanding your rights and working closely with a San Antonio, TX bankruptcy attorney can make the process more manageable. Call Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation.