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WHAT IS THE DIFFERENCE BETWEEN CHAPTER 7 AND CHAPTER 13 BANKRUPTCY?

Chapter 7 bankruptcy is commonly referred to as a “liquidation” bankruptcy, however very few cases involve liquidation of a debtor’s property.  Chapter 7 cases are a good option for eligible debtors who have debts they wish to discharge and who are current on their payments to creditors holding a security interest in property the debtor wishes to keep.  This type of case usually lasts three to four months, from the date of filing until the bankruptcy case is closed.  The bankruptcy case starts when the bankruptcy petition is filed.  The debtor meets with a trustee once, usually thirty to forty-five days after the petition is filed.  After this meeting, the debtor must wait sixty days to allow her creditors to review the case and determine whether to object to discharge.  This rarely happens, as there are few grounds for objecting to discharge and the potential for recovery by the creditor in these types of lawsuits is low.  After the sixty days has passed, the trustee requests a discharge order, the judge signs the order, and the case is closed.

 

Chapter 13 bankruptcy is commonly referred to as a “reorganization” bankruptcy.  There are two main reasons why debtors file chapter 13 bankruptcy.  First, debtors file under chapter 13 because they have debts they wish to discharge but they are ineligible for a discharge under chapter 7 because their income is too high or they are ineligible because of a prior bankruptcy discharge.  Second, debtors file chapter 13 bankruptcy because they are in danger of losing secured property to foreclosure or repossession.  Chapter 13 bankruptcy gives debtors a way to protect their property from repossession or foreclosure and repay their arrears.  Chapter 13 cases last between three and five years from the date of filing until the case is closed.  In chapter 13 cases, debtors propose a plan to repay their creditors.  These plans must be either three or five years long, depending on the debtor’s income.  The plan may be shorter if the debtor proposes to repay all of her debts.  The Bankruptcy Code requires that certain debts be paid in the chapter 13 plan.  Debtors are required to pay all of their priority debts (income taxes, attorney’s fees, and child support), any secured debt included in the plan (such as a car loan or mortgage arrears) and depending upon their income, they may be required to pay a portion of their unsecured debt as well.

 

The Wright Firm, L.L.P. represents clients in a variety of different types of legal matters, including bankruptcy.  At The Wright Firm, telephone consultations and your first meeting with an attorney to discuss bankruptcy are free.  Call The Wright Firm at 469-635-6000 or visit the firm’s website at www.thewrightlawyers.com for more information.

 

KNOCK, LISTEN, THEN BREAK THE DOOR DOWN!

In an 8-1 vote the United States Supreme Court reversed a Kentucky ruling that excluded evidence gather after police officers entered Mr. Hollis King’s apartment without a search warrant. Police officers claimed they smelled marijuana coming from the apartment and “feared” that Mr. King was trying to get rid of incriminating evidence. Officers knocked on the door and thought they heard noises that indicated that whoever was inside was trying to get rid of incriminating evidence. The Supreme Court explained that Mr. King’s constitutional rights were not violated because the police acted reasonably and those that attempt to destroy evidence have only themselves to blame. In her dissenting opinion Justice Ginsburg said her colleagues were giving police an easy way to routinely avoid getting warrants in drug cases. She states: “police may now knock, listen then break the door down, never mind that they had ample time to obtain a warrant.”

For information on Texas criminal law contact The Wright Firm, L.L.P. at 972-353-4600 or visit our website at www.thewrightlawyers.com. 

 

Disney Trademarks the term "Seal Team 6"

Forget the Taliban and al-Qaida, should we worry about Disney?  Amazingly, Disney has already trademarked the words "Seal Team 6" the name of the special operations unit that killed Osama bin Laden reports FishbowlNY.  Just two days after the president reported the death of Bin Laden, Disney filed three applications with the U.S. Patent & Trademark Office.  The applications include things like "clothing", "toys", "games", and "Christmas stockings" using the term "Seal Team 6".

Maybe Disney has a new animated movie in the works about six antarctic fur seals fighting for justice? One never knows as they are pretty creative over at Disney.  

The United States Navy Sea, Air, and Land Teams, commonly known as Navy Seals, prefer to operate out of the public eye.  Is it really necessary to plaster this term on every t-shirt, Christmas stocking, and toy to make a profit?  Should it be sufficient enough to just say thank you to the men and women in our armed forces who protect us each and every day?  I for one say, "Thank you, to the Seals and everyone who serves in our armed forces."  Maybe Disney should make a t-shirt that says just that?  

For information on Texas law contact The Wright Firm at 972-353-4600 or visit our website at www.thewrightlawyers.com 

The Anatomy of Grey’s Family Law

Attorneys have a hard time turning off their “inner lawyer” even when just watching T.V.  For example, I love the show Grey’s Anatomy, but even though there is no lawyering on screen, I watch it thinking about the legal ramifications of the characters are doing.  Here are three great examples:

Derek and Meredith’s  Post-it Marriage. Two doctors on the show decide to write out their wedding vows on a sticky note, rather than going through the drama and pageantry of a wedding.  Would this, in Texas, count as a common law marriage?  Probably yes!  To qualify as a common law marriage in Texas, you have to have 3 things:

You have to live together – Check! They’ve been shacked up for quite a while now.You have to have an agreement to be married – Check! That post-it is evidence of the agreement.You have to hold yourselves out as husband and wife – Check!  Since the post-it they have been referring to each other in front of everyone in the hospital as “my wife” or “my husband”.

2.      Callie and Arizona’s Same-Sex Marriage. If you tuned in last week, you saw two female doctors have a wedding ceremony, officiated by another doctor.  Would this be a legal marriage in Texas?  No – for two reasons. At this time, Texas law will not recognize a same-sex marriage; and The doctor who performed the marriage ceremony was not a religious official or judge, and was therefore not a person authorized to officiate a wedding.  Now – keep in mind, if it weren’t for reason above, this couple could still potentially be common law married.  Just because the officiant is not authorized to perform marriages, doesn’t automatically make the marriage void.

3.      Callie’s Baby with Dr. McSteamy. Before her wedding to Arizona, Callie got pregnant and had a baby by Dr. McSteamy.  This creates an interesting parenting triangle.  You have the biological mother and her same-sex life partner on one side, and the biological father on the other.  Who has parental rights to the baby?  Under Texas law, it would probably just be the two biological parents – meaning that even if Arizona had raised the child as her own for most of the child’s life, if she and Callie break up, she could forever be denied any access to the child.  What could Arizona do about this?  Well, if four things happened, Arizona could adopt her.  Dr. McSteamy would agree to terminate his rights as father; andThe child was at least 2 years old; andThe child had been in Arizona’s actual possession and care for six months prior to the adoption; and Callie consents to the adoption.Reality can be more even more complicated than fiction. 

Got family law questions based on your real life?  Call The Wright Firm at (972) 353-4600 or check us out on the web at www.thewrightlawyers.com! 

 

 

Can A Texas Child At The Age Of 12 Tell The Judge Where They Want To Live?

In Texas, children do not get to choose who they will live with; however, children who are at least 12 years old can tell a judge where they want live. The Texas Family Code allows a judge to interview a child 12 years of age or older to determine the child’s desires as to which parent should have the exclusive right to determine the child’s primary residence. Either party in the suit can request a judge to confer with a child. Once a request is made for a judge to confer with a child, the judge is required to talk with children 12 years of age and older and has the discretion to talk with children under the age of 12. The judge may or may not follow the child’s wishes.  The judge’s decision will be based on the best interest of the child.

For more information contact The Wright Firm, L.L.P. at 972-353-4600 (phones answered 24 hours a day) or visit our website at www.thewrightlawyers.com.

 

New Potential Texas Law: Loser Pays!

The Texas House of Representatives recently passed a bill that will cause lawsuit losers to pay the legal fees of the winner.  While that may sound like a great idea at surface level, let’s break it down a little bit.

Right now, Texas does not have an automatic provision that allows a lawsuit winner to recover his attorneys’ fees.  The new bill would require a party to pay the legal fees of the other party if the lawsuit is tossed out by the court for failing to state a valid legal claim.  So, the “loser pays” provisions would not come into play in every lawsuit.  Supporters of this portion of the bill believe that this will help to diminish the number of groundless and frivolous lawsuits that are filed.  Opponents argue that the bill may keep potentially valid lawsuits from being filed for fear of having to pay attorney fees.  Would you sue Wal-Mart, for example, if there was any chance that you might have to pay their attorneys?

A second portion of the bill is being sarcastically called a “losers pay and sometimes winners pay, too” law.  This section would change an existing rule in Texas law.  The rule works in two directions:

1. Patty sues Darryl.  Darryl offers Patty $100 to settle the lawsuit.  Patty says “NO!”  At trial Patty wins $80.  In this case, Patty would have to pay Darryl’s legal fees from the date that she said “no” to his settlement offer because she only won 80% of what he offered her.
2. Patty sues Darryl.  Patty offers to Darryl, “Give me $100, and we’ll call this thing off.”  Darryl says “NO!”  At trial the Patty wins $120. In this case Darryl would have to pay Patty’s legal fees from the date that he said “no” to her settlement offer because she won 120% of what she offered him.

[See Texas Civil Practice and Remedies Code § 42.004]

As it stands, the amount of attorney fees you can be awarded under this rule is capped.  The new bill would remove the cap – meaning that you could be awarded ALL of your attorney fees from the date the settlement offer is rejected forward.  It could have the effect that a lawsuit winner (see example 1) could be turned into a loser because she has to pay more in the other party’s attorney fees than she won.  It could also seriously encourage defendants and plaintiffs to make (and accept) reasonable settlement offers.

A third section of the bill would allow homeowners to collect their legal fees from tax appraisal districts if the homeowners successfully contest their tax appraisal.  Interestingly, the bill does not permit the appraisal districts to collect legal fees from unsuccessful appraisal challengers.  Opposition to this section of the bill believe that this one-sided approach would impose a heavy financial burden on taxing districts which will ultimately end up being passed on to the taxpayers.  Rep. Roland Gutierrez, who proposed this amendment to the bill, stated that the taxing agencies should be entitled to nothing because “they have their own attorneys.”

This bill will now move on to the Texas Senate for more debate and voting.

For more information on Texas law contact The Wright Firm at 972-353-4600 or visit our website at www.thewrightlawyers.com. 

 

CHAPTER 13 BANKRUPTCY AND THE HARDSHIP DISCHARGE!

Chapter 13 bankruptcy requires that a debtor make payments to a trustee for three to five years under a repayment plan filed by the debtor at the beginning of their bankruptcy case.  At the end of the plan the debtor receives a discharge of any remaining dischargeable debts.  Sometimes a debtor files chapter 13 bankruptcy, makes payments for awhile, but then their circumstances change and they are unable to continue making payments.  When this happens there are a few options.  First, the debtor can convert the bankruptcy case to a case under chapter 7.  Conversion requires that a debtor file new schedules and statements with the court and attend another 341 meeting with a trustee.  Second, the debtor can  file a plan modification and lower their plan payment.  This option is only available if the debtor’s plan provides for payments to unsecured creditors.  If this is the case, the debtor can modify their plan to reduce payments to unsecured creditors, provided they can show that they can still afford payments to the secured and priority creditors listed in their plan.

 

There is a third option,  known as the “Hardship Discharge” which is much simpler, quicker, and less costly than a plan modification or conversion.  Section 1328(b) of the Bankruptcy Code allows chapter 13 debtors who have not completed their plan to receive a discharge if they meet three requirements.  First, the debtor’s failure to complete their plan must be due to circumstances for which the debtor should not justly be held accountable.  For example, if a debtor is laid off from their job or becomes sick and can no longer work.  Second, the value, as of the effective date of the plan, of property actually distributed under the plan on account of each allowed unsecured claim is not less than the amount that would have been paid on such claim if the estate of the debtor had been liquidated under chapter 7.  This means that if the debtors had nonexempt property when they filed their chapter 13 case, they must have paid enough money during their chapter 13 case to provide the unsecured creditors payments equal or greater than the value of the nonexempt property.  Third, modification of the plan is not practicable.  Generally this means that the debtor is not earning enough to support a chapter 13 plan payment, or the debtor does not have disposable income to be paid to the unsecured creditors and there are no secured or priority claims to be paid in the plan.

 

Use of the hardship discharge is limited to very specific circumstances.  Most chapter 13 debtors will resolve changes in their financial situation by filing a plan modification or a conversion, but for those debtors that meet the above requirements, the hardship discharge provides a quick and inexpensive way to petition the court to receive a discharge without completing their chapter 13 plan.

 

Bankruptcy is a very complex legal field.  Before making the decision to file bankruptcy you should consult an experienced bankruptcy attorney.  For more information about filing a bankruptcy in north Texas, contact The Wright Firm, L.L.P. at 469-635-6900 or visit our websites at www.thewrightlawyers.com or www.northtexas-bankruptcy.com.

 

Texas Social Host Liability: Don't Serve Alcohol to Minors!

Social Host Liability is the legal term for the criminal and civil responsibility of a person who furnishes alcohol to a guest. In most cases, social hosts in Texas are not responsible for guests who drink too much at their home. However, there are exceptions, a big one being when a host serves alcohol to minors.  If a homeowner provides alcohol to minors or allows minors to consume alcohol at their residence, they are liable for any injuries caused by the intoxicated minor. That is exactly what happened in Georgetown, Texas to Donna Crites. Mrs. Crites was sentenced to three years of probation and one week in jail for providing alcohol to her underage son and his friends to make about 200 gelatin shots. Five of teenagers who had been drinking at the Crites’ residence were seriously injured in a car accident. The driver told investigators that he consumed as many as 40 of the shots. Mrs. Crites plead guilty to five counts of purchasing or furnishing alcohol to minors over the incident.

For more information and/or a free initial consultation about social host responsibility and under-aged drunk driving contact The Wright Firm, L.L.P. at 972-353-4600 (phones answered 24 hours a day) or visit our website at www.thewrightlawyers.com.  Meet with one of our criminal defense attorneys in Dallas, Denton, Lewisville, Frisco, Plano, or Ft. Worth, Texas.

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