4 Benefits of Filing Bankruptcy for Texas Families

August 30, 2010

Bankruptcy is about money on paper, but really it’s about getting more than money back. Being free from enormous debt can really lift a weight off your shoulders. After all, who likes a $50,000 medical bill coming in the mail, when you don’t even make that much in a year? Or what happens when your husband or wife loses their job, the housing market falls, and you have to pay the mortgage on your own?

There are many scenarios where filing bankruptcy is best for you and your family. This guide gives you 4 benefits of filing for protection by using Chapter 7 or Chapter 13 bankruptcy.

You Can Have a Job
The Texas income levels do matter in Chapter 7 bankruptcy, but you are often well within the annual income levels. The means test looks at the past six months: how much you made, and how much a family of your size made on average in Texas. If you are below, you can file Chapter 7. If you are over, you might be able to wait until your income lowers, or you can file Chapter 13. If you just lost a job, it may take a few months wait before your income is low enough.

What are the income limits in Texas? For one person, the limit is $38,801. For a family of two, $55,660; three is $59,011; four is $66,145; and if you have a larger family, the income limits continue to grow. So you can often have a job and still file.

Bankruptcy Protects Your Home
Chapter 13 bankruptcy best protects your home, but in Texas, the homestead exemption in filing bankruptcy has no limit. You can only have so much personal property, but the exemption can protect your home. If you fear a foreclosure is coming, by filing for bankruptcy you buy yourself time to catch up; a judge will put an automatic stay which in effect stops all collections for several months. This can give you some legal protection. The important thing is to file before foreclosure is begun.

It Protects Your Assets and Car
You can have personal property up to $30,000. You can also work out a fair rate on your car. Even though technically you can lose a car in Chapter 7 bankruptcy, most lose nothing when they file. For families with only one car, keeping it is very important. You can pay on it outside the bankruptcy or pay installments within the bankruptcy. This depends on how much you owe on the car.

Texas Bankruptcy Can Save You Tens of Thousands
For families, perhaps the biggest fear is a son or daughter getting hurt in a car accident or to simply come down with a major illness. What is sometimes forgotten in the moment is the costs involved if you have no insurance. For families nationwide, having no medical coverage is a reality. But there is good news: Chapter 7 bankruptcy can discharge the entire debt. You can also use it to discharge family credit debt.

Creditor Harassment

While the phone can be a bearer of good news, it can also be one of bad news. You owe this much money. You get a call every day or every other day on it. Then a new creditor starts calling. Then you get even more calls off shut off notices and threats. This can be stopped outside bankruptcy, but by filing you are ensuring creditor harassment will stop. Creditors have no more reason to call you. And if they do, refer them to your lawyer.

6 Myths on Chapter 13 Bankruptcy for Texas Residents

August 27, 2010

All too often, we hear one bad review of a movie, book, or show and decide not to go with it. This too happens with bankruptcy.  Bankruptcy law is very complex on paper, but many myths can be dispelled. This blog guide focuses on myths involving Texas Chapter 13 bankruptcy

Myth, You Have to Be Broke
You do not have to be broke at all to file bankruptcy. In fact, you want more money if you file Chapter 13. If you have no money, Chapter 7 is a much better option, and you will likely be eligible unless you make a lot. But in Chapter 13, you need only prove you need legal protection for property and assets. The point is that you are paying on debts; you can have some money or lots of money and still file. You can stop the problem months before it become a financial collapse, at a time when you have more money but know it won’t last.

Myth, You Will Lose Your Home
Chapter 13 bankruptcy puts an automatic stay on all collections and foreclosures. There is some truth here, as you might lose your home. If you cannot pay on the home, or if you wait too long, you may lose it to foreclosure. An automatic stay stops collections for several months, but it cannot stop a foreclosure started before you filed. What it can do is provide you months protection, then give you the opportunity to repay the debt in manageable installments if you file early enough.

Myth, Spending Retirement Savings or 401K is Better

Spending your nest egg is a bad idea. You are only buying yourself a few months to a  years time when you can stop the problem at its source. If you have no money at all, Chapter 7 may better discharge your debts. If you are working and have some income, Chapter 13 makes it so you can afford to make some reasonable payments.

Myth, Your Credit Will be Ruined
Your credit will be hurt, not ruined. You can rebuild it. If everyone in Texas who filed bankruptcy could no longer buy a car, rent an apartment, buy a home, or get a student loan, there would be some big problems. Yes, you may have some high interest rates, you may get turned down a few times. The trick is to continue trying until you get results.

Myth, Creditors Will Stop the Bankruptcy

Your creditors do have rights. They can ask for a lift of an automatic stay. But in Chapter 7, they rarely have much say. In Chapter 13, they are getting the majority of the money owed them, if not all. As long as you stay within Texas bankruptcy law, you will be fine.

Myth, Lawyers Always Overcharge You

Bankruptcy lawyers charge some of the lowest rates in the business. You get charged with a felony, a good lawyer will cost you a lot of money. In bankruptcy, you are filing because you lack proper funds, not because you are rich. Therefore, lawyers charge minimal rates. The good ones may charge more, but when you compare it to the benefits of a successful Chapter 13 filing, such as stopping a foreclosure, it’s more than worth it.

Texas Bankruptcy – Why You Shouldn’t Sell Assets, Cash Out 401Ks, Or Spend Retirement Savings

August 25, 2010

There are many mistakes made regarding bankruptcy all the time in Texas. Though Texans are Texans and New Yorkers are New Yorkers, the general ideas of bankruptcy law are the same. The mistakes made are very similar too.

The mistakes made are not because of a lack of understanding on bankruptcy law, but general commonsense. Commonsense is about saving, not spending. And this brings us to common mistakes: spending savings, cashing out 401Ks, or tapping into a retirement fund rather than filing bankruptcy.

Why not spend your savings?

You can spend your savings. You may think it’s okay to do this before you file bankruptcy, or as a means of avoiding bankruptcy in the first place. This is wrong. Spending your savings only buys you a few months time. You might as well save the money. In a Chapter 13 filing, you need disposable income. In Chapter 7, your assets are liquidated, but most commonly Texans lose nothing in terms of money, property, or other assets.

Why not spend your 401K?

A 401K is not a fallback for avoiding bankruptcy. Just like spending your savings, it buys you months, or maybe a year, and then you are in the same position but with future money problems guaranteed. Bankruptcy is not a bad thing. Many in Texas file because it’s the right decision. Many cash out 401Ks thinking they can make the money back later. It may not be your plan, but an earlier bankruptcy instead of a later one puts you in a better position financially.

Spending Other Retirement Money
Retirement money is for retirement. Yes, if you have an incredible emergency, sometimes you do have to borrow against the future. But that puts you in danger financially.

Not Waiting to File Bankruptcy
The real decision to make is to stop the delays and consult with some legal experts. It’s recommended you consult with a lawyer, do some of your own research, and go over your finances. Bankruptcy may in fact not be your best option. But if it comes between spending money you will need later or spending it now, the obvious choice is to protect your future.

Texas Bankruptcy Help
Filing bankruptcy is not your only option. But thousands of Texas use it for the right reason: financial protection and debt discharge. A Chapter 7 bankruptcy may protect you from falling into impossible debt; delaying a Chapter 7 filing is rarely smart. A Chapter 13 bankruptcy may in fact need some funds to be possible, but it can protect your assets much better. In both Chapter 7 and Chapter 13, filing for help starts by asking for help. Don’t take the easy way out, nor make your decision based on one person. Consult with some legal and financial experts, the ones you pay because they have experience.

The Bottom Line on Arlington Texas Bankruptcy

August 23, 2010

There are many decisions to make when it comes to filing Texas bankruptcy. And in Arlington Texas, home owners, families, students, and hard workers deserve some real honesty, Bankruptcy is not always the best option. Bankruptcy has disadvantages. And not all bankruptcy lawyers are capable of helping you.

But sometimes bankruptcy is the very best choice to make. Bankruptcy has some major advantages. And the right Arlington bankruptcy lawyer can protect your income, your assets, your home, and your future.

When is bankruptcy right?
Bankruptcy is the right decision to make when you simply have no other debt reduction options. You may owe far too much money that, even with some time to save, you simply have no chance of making due on. Or you may have some income, some valuable property, but are facing foreclosure or about to tap into your retirement savings. These situations call for bankruptcy.

Which bankruptcy?

Chapter 7 bankruptcy may be your best option when you simply cannot pay on debts. This form of filing gives you fresh start financially. It’s the most common form of bankruptcy in Arlington Texas, simply because it has a lasting and positive impact on your economic situation.

If you feel you do have a  chance of paying this debt off and you have a lot of assets, Chapter 13 bankruptcy may best. If you want to protect your Arlington home from foreclosure, it’s a very good option. Many home owners go into bankruptcy knowing they are in danger. But the problem is waiting too long to act. If you can contact a Arlington lawyer, file the Chapter 13 papers, you can stop a foreclosure from occurring as long as you can make payments on the home.

If you have no money at all, Chapter 7 may be best. If you simply have too many debts, again Chapter 7 may be best. On the other hand, if you have a valuable home or one you simply want to keep at all costs, Chapter 13 can protect it. If you have other valuable assets, and you have enough of an income, again Chapter 13 may be best.

Should you spend retirement money?
Some avoid bankruptcy at all costs. They spend money they really shouldn’t. Then foreclosure papers are filed, wage garnishments are made, and retirement savings or 401Ks go down the drain. This is a terrible way to stay solvent. The best choice is to protect this money. If you you use this money, how long does it buy you? Is 3 months of breathing space enough to spend your 401K? The bottom line is your home, wages, savings, and retirement plans should be protected.

It Will Cost Too Much …
Not filing bankruptcy will cost you much more than filing. When you compare the numbers, you can discharge tens of thousands for thousands. You can protect a $100,000 home from foreclosure. You can stop a wage garnishment from cutting your paycheck in half. You hire an Arlington bankruptcy lawyer because he or she helps your bottom line, does not cost you everything. The good news is, an experienced bankruptcy lawyer is willing to fight to protect you, your family, and your assets.

Timing and Filing Texas Bankruptcy

August 20, 2010

When is the best time to file for bankruptcy? It’s really a broad topic which does not get enough notice. Sometimes filing quickly can save valuable assets and property, not to mention headaches. Sometimes delaying your bankruptcy may be the best decision you can make. This guide focuses on helping our Texas readers with filing for personal bankruptcy, but it applies to filers across all states.

Why file quickly?

Most commonly, you want to file quickly in order to use the automatic stay to protect yourself. The automatic stay stops all collection and repossession activities against you, stops any utility shut offs, while also stopping Texas court cases. The delay is only temporary, but it takes only a matter of months to decide on your next steps. There are other cases where you might want to file quickly, including if you plan on acquiring a property which won’t be protected (because it’s nonexempt); by filing sooner you can keep it.

Why delay filing?
The biggest reason to delay filing is to protect your property from being taken. If you transferred money or property to someone else, then went ahead and filed for bankruptcy, it will rarely work out. You need to delay this decision. What happens is the trustee can void this step. If you transfer property within one year of filing in order to protect it from creditors, by law this can be stopped. It makes sense: if you could just transfer a home or car to another person, then file bankruptcy, it would be  loophole in the system.

There are some other reasons to delay your filing, namely if you expect some new bills to arrive. You may be expecting a large hospital bill, for example, and want to have this discharged along with your bankruptcy. This, when within the laws, is allowed.

In either case, you should consult with your bankruptcy lawyer.

What about exemptions?

You want as much of your property to be exempt from the bankruptcy as possible. This is logical, but not always easy. However, it’s more than worth investing the time into learning. Many of your assets will in fact be exempt from being part of your discharge. You want to ensure you can claim the homestead exemption, for example, which can help you keep your property. If you are not eligible for a homestead exemption, it’s possible you may lose your home.  State laws differ on this. Texas laws are in fact some of the best in protecting your home; you have no dollar amount limit,and your property can be quite large and still be eligible.

What if you have questions?
As you can see with the laws for the homestead exemption, this can be complex. It’s natural not to understand all of it. The good news is that these laws are designed to protect, not to take. If you are unsure of when is the best time for you to file, or on how to protect your assets, it’s time to consult with a Texas bankruptcy attorney.

The Automatic Stay in Dallas Bankruptcy

August 18, 2010

The automatic stay is your legal protection given by bankruptcy court to stop a foreclosure, collections, utility disconnections, and can often buy time to pay off assets you want to keep. But many in Dallas fearing home foreclosure, car repossession, or constant collections are unsure of the main rights they have. This blog guide is the answer. It states why the automatic stay is allowed, what it can prevent, what it cannot prevent, and how best to use it.

Why is it allowed?
The automatic stay is allowed for economic downturns we have in our country. Just as the stock market adapts to market changes in safer ways than a century ago, consumer debt protection is designed to help those who are in danger of losing everything. In other words, it’s a benefit of how our economy has evolved to better help consumers. If there were no automatic stay then foreclosures, repossessions, credit card debt, and other debts would ruin thousands of lives every year.

What can the automatic stay protect in Dallas Bankruptcy?

Perhaps most importantly, the automatic stay can protect you from foreclosure. If you are filing Dallas Chapter 7 bankruptcy, you can buy yourself time to get a new residence. However, by filing Chapter 7, you are in danger of losing the home. Chapter 13 bankruptcy may be better for Dallas residents, as you have the chance to save your home from foreclosure.

You can also stop utility disconnections for a minimum of 20 days. If you are in over your head with bills, keeping your power on can make it possible to stay in your home.

Another big point to consider is the income you have coming in, whether via public benefits or via work. If you are receiving money from the government for social security, this can be protected. If you have a job and creditors are trying to get a wage garnishment, this too can be stopped.

What can’t the automatic stay do in Dallas bankruptcy?
The automatic stay does not protect you from everything. You still have to pay your taxes, and if you don’t you can be audited. The IRS cannot take any property or income you have, however, as this is protected. Filing bankruptcy also does not protect you from having to pay child support or alimony; these still need to be paid. If you have criminal proceedings coming against you, these are considered separate from your debt rights; you still have to face criminal charges.

Best Use of Automatic Stay
While the automatic stay cannot stop all legal actions against you, it does help in some key ways. Bankruptcy does not solve all your problems, but in cases of debt, at a minimum it protects you from collections, and gives you the opportunity to protect your property, assets, and income. The biggest advantage of using the automatic stay is with Chapter 13 bankruptcy: it not only delays a foreclosure of your home, but can stop it if you file bankruptcy prior to foreclosure documents being submitted.

Professional Lawyer or No Lawyer? And Other Answers for Texas Bankruptcy Filers

August 16, 2010

Why do you need a bankruptcy lawyer? It’s almost like learning a new language in complexity. If you have the time, and a lot of it, then maybe you can file. It’s not impossible. But for busy Texas residents who already lack time, choosing to work with a professional lawyer is invaluable.

This blog post will answer 5 important questions on Texas bankruptcy.
Why hire a lawyer?
What can they do?
How much time will it take?
How much will it cost?
Is doing it yourself cheaper?

So why do you need a lawyer?
As noted, if you have the time and understanding of legal practices, it is possible. A lawyer is invaluable in proving eligibility for bankruptcy, in choosing the form of bankruptcy best for you, and in consulting with you in cases of problems. Say for example you want to file Texas Chapter 7 bankruptcy. Chapter 7 can eliminate thousands if not tens of thousands in major debts, including credit, medical, and mortgage. But there are factors in filing you simply will not know. What happens if you make a mistake? What happens if you are not eligible? Or if one of your creditors tries to lift the automatic stay, how can you protect your assets and property from collection?

What can a Texas bankruptcy lawyer do?
He or she can decide your best options from the beginning, saving you invaluable time and money. A lawyer can help you discharge the most debt, buy you time to pay off debts for assets you want to keep, stop creditor harassment, and save you from losing everything.

How long will it take?
Let’s go beyond hiring a Texas bankruptcy lawyer and consider the time of the process. A Chapter 7 bankruptcy typically takes a matter of months; you are then discharged of the majority of your debt. A Chapter 13 bankruptcy is much more time consuming, but beneficial in its own way; it takes 3-5 years, which is good because it buys you time to pay on debts instead of losing property and assets.

How much will filing Texas bankruptcy cost?
In comparison to how much money you save, a very small amount. Chapter 7 is $299 for a court fee, then you pay your lawyer a fee; Chapter 13 is $274, then lawyer costs. Most lawyers are willing to work with you on payment, but the general rates go from $1,000 to $2,000, depending on the complexity of your case. If you could save your home for $2,000, would you? If you could discharge $50,000 in debt for $2,500, would you?

The Do-It-Yourself Question with Bankruptcy

If you have no legal background, especially no prior experience with bankruptcy law, this is like defending yourself in court for a crime. You would not know where to begin. It costs too much time and therefore money to do it yourself. If you are considering filing bankruptcy without legal help, it may take months of study, and even then you can make mistakes. A lawyer learns a lot in law school, and his or her value is also the years experience working in and out of court.

Texas Bankruptcy Information – Dangers of Credit Counseling

August 13, 2010

Credit counseling is rarely in your best interests, but sometimes it does work out. Technically, it’s supposed to help you improve your credit rating, lower your current interest rate, and generally do things you can do yourself. That’s the main problem: credit counseling is something you need not pay a fee for. There are many dangers when it comes to credit counseling. This blog guide goes over them and the alternatives

Not Non-Profit
Just because a company says it’s non-profit does not mean they won’t charge you. Some misconceptions are that credit counseling is cheap, effective, and fast. However, credit counseling agencies do charge fees, do often pay their workers very well, and their main goal is to make money off you. Yes, bankruptcy is not free either, but it’s not in the non-profit sector.

If You Don’t Pay
If you miss a payment via a credit counseling plan, it can severely damage your credit rating. It’s like having two non-payments on your record.

The process is pretty simple: the counseling service will contact your creditors for you, try to get a reduced interest rate and lower payments so you can afford them, and then you pay them directly. But if you miss a payment, you have less legal protection than you would had this been a bankruptcy. If you miss the payment, quite often this will act as a second hit on your credit. We all get into situations where we’ll miss a payment for something, but having no legal protection is dangerous.

Dangers of Scams and Fees
Sometimes credit counseling agencies will try to get you for all they can. They charge you a fee just to be considered, sometimes a very high one. Then they make you pay a separate fee for their services. These are typically scams designed to take your money; you should pay little to nothing to start working with them, and they take any agreed fees after that.

Other Dangers and Bankruptcy
There are many other downfalls for credit counseling. It’s important to remember sometimes it may in fact work for you. Some do successfully rebuild their credit this way. There are many honest and hard-working credit counseling agencies. However, the process itself is much less effective than bankruptcy. With a Chapter 7 discharge, you lose most all your debts. With Chapter 13, you enter into a debt repayment plan protected by law. If you’re a Texas resident considering credit counseling, be weary of this route, and consult with an experienced Texas bankruptcy attorney instead.

A Primer on Claiming Dallas Texas Bankruptcy

August 11, 2010

Claiming bankruptcy anywhere in the country can have an immense effect on your financial future. You’ve likely heard some stories, both good and bad, about bankruptcy. Maybe a horror story where a family lost one job, then a house, and were left with nothing. Or a family who had already had nothing, received a $50,000 medical bill, and were out of options. There is an answer: filing bankruptcy. If you lose your job, have debt you simply cannot pay, a Chapter 7 bankruptcy can often be a life saver. If you are in danger of losing your Dallas home to foreclosure, Chapter 13 bankruptcy provides legal protection. How do they help? What will it effect?

How does bankruptcy help?
Dallas and Texas in general have seen thousands of residents successfully file bankruptcy in the past year. The reasons are pretty simple: credit and medical debts. Studies have pointed out how medical bills for those with coverage are in fact the biggest reasons for filing bankruptcy, not credit cards. But credit card debt is a big part of filing too. If you own a lot of assets, especially a home, these can be protected by filing bankruptcy.

Does it hurt your credit score?
Yes, filing bankruptcy does hurt your credit score. This is a downside, but the alternative really isn’t much better. It will typically take you some time before your credit is rebuilt. You can take small steps such as opening new accounts and always paying on time. The alternative, where your assets are taken, where your wages are garnished, and where you are in danger of losing a home is much worse.

What if you have no job?
If you are filing Chapter 7 bankruptcy, which discharges most all your debts, having no job is almost a good thing. In Texas, if you make higher than the median income for the state, you are forced to file Chapter 13. This is based on the means tests for how much you made in the past six months compared to other Texas residents. If you, for example, have a high paying job or had one and lost it, you either are not eligible or you might have to wait until you can prove a lack of income.

What if you have a student loan?
Usually you still have to pay student loans. Also, taxes, child support, and alimony debts are usually not discharged.

What if your home is in foreclosure?
If the foreclosure is ongoing, all you can do is buy time. For example, if you file bankruptcy a few weeks after the foreclosure papers have been filed, quite often the foreclosure will be delayed but still go through. If you filed before the foreclosure begins, specifically by filing Chapter 13 bankruptcy, you may have the chance to save your home.

How much will it cost?

To file Chapter 7 bankruptcy with the Texas courts you pay $299, and $274 for Chapter 13 bankruptcy. Lawyer fees vary, usually from $1,000 to $2,000. Hiring a lawyer has immense benefits in discharging the most debts, protecting your home from foreclosure, handling creditors, and managing any problems in court. The fees are even more minor when you can discharge huge debts.

What is the Automatic Stay in Texas Bankruptcy?

August 9, 2010

The automatic stay is a useful way to protect your income, assets, and properties. There are some things it can and cannot. For those in Texas, the automatic stay can be a life saver benefit after filing bankruptcy. This blog guide will define the automatic stay, explain how it can help, note what it cannot do, and also how to get legal help if you’re unsure of how it works.

What is the automatic stay?
An automatic stay is a court order which stops any collections against you from creditors, collection agencies, and sometimes government offices. The main advantage here is that you can delay your home  being taken, if not stop it completely, but you can also stop wage garnishments and power turns offs.

What can it do?
We noted how it can delay a foreclosure. Sometimes if you file a Chapter 13 bankruptcy before the foreclosure is started, you have the opportunity to save your home from being taken. This only occurs if you can stop the collection before it begins. In some instances creditors can stop you from getting this, which is decided by the courts. You can also stop utility disconnections, an eviction, and wage garnishments. While your utility bill may be small, if you intend to stay in the residence for some time, keeping your electric on can be quite important (especially during winter). In terms of wage garnishments, many file bankruptcy to protect themselves against wages being taken, and this can ensure you get your full salary every month.

What can’t it do?
Usually, an automatic stay via bankruptcy cannot deny the government taxes. You can still be audited, still be forced to pay your taxes, but the IRS cannot take property or income while the automatic stay is in effect. If you pay child support or alimony, you are required to continue these payments; filing bankruptcy makes no difference.  If you broke the law in some way, you can still be charged with any crimes and face court. If you have a pension, quite often this can be used as part of your bankruptcy finalling. Finally, if you filed unsuccessfully before, you’ll have to prove that this filing is correct, lest you lose the automatic stay.

Who can help?

It should be noted again that creditors you owe money do have legal options when it comes to the automatic stay. If you are facing Texas foreclosure, and get it stopped, this is one example where a creditor can ask for the stay to be lifted. There are many other situations where the stay can be lifted, making it important to know the laws and how to work them. This is where an experienced Texas bankruptcy attorney can help. He or she should have experience in Chapter 7 and Chapter 13 bankruptcy, be able to educate you on the laws, help protect assets and income, and make this process easier for you.

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