Your Texas Foreclosure Options and Rights

November 30, 2010

You have a right to keep your home, but there is some fine print. What many confuse is the fact that Texas bankruptcy and foreclosure are each unique from all other states. All states have different bankruptcy and foreclosure laws, but you can use Texas laws to your advantage. The most important law to understand is the Texas Homestead Exemption. You should also understand how Chapter 7 and Chapter 13 bankruptcy filings can protect your home. This blog guide will help.

The Homestead Exemption

The Texas Homestead Exemption is a unique law in that you can protect your home from most creditors no matter how much you make or how much you owe. The law is fairly complex, but in practical terms it means creditors cannot take your home if you owe money. The home lender can take the home if you stop making payments, but if you owe credit card debt, medical debt, or other forms of debt, the law protects these creditors from using your home to pay back the debt. So if you owe $25,000 in credit card debt, the credit card company can use legal means to get the money, but they cannot take your home. If you owed $50,000 in medical bills because you lack coverage, the story is the same – your home cannot be used to pay back the bill. In other states, laws are less helpful. But in Texas, if you owe some unsecured debts, these cannot be used to take your home.

Chapter 7 Bankruptcy Option
Chapter 7 bankruptcy is also unique to Texas, but mainly in eligibility rules. Find out the current median income in Texas when you are considering filing bankruptcy. If you make more, there is a good chance you are not eligible. On the other hand, if you make less than average, or recently had a decrease in income, it’s likely you can file. And you can use a Chapter 7 bankruptcy to discharge debts outside your secured assets. So you could continue to pay on your home and car, affirming the debts, but discharge a large credit or medical bill. This can be quite helpful, but can also get quite technical. You should definitely hire an experienced Texas bankruptcy attorney if you’re considering this option.

The Chapter 13 Bankruptcy Option

Chapter 13 bankruptcy can often be more effective in protecting your home than Chapter 7 bankruptcy. You may make too much money. You may want help in paying back your secured debts, such as your home and car. In these situations, a Chapter 13 repayment plan allows you to pay back debts over 3-5 years. If you file correctly, you can avoid a foreclosure, along with buying yourself time to pay on other debts.

Foreclosure Help

If you are trying to avoid foreclosure, don’t overreact. Instead, you should take action. You should consult with an experienced Texas bankruptcy attorney. You should find out ways to save money, property, and assets. Once you understand your options, you can avoid a foreclosure.

5 Points On When to File Chapter 7 Bankruptcy

November 26, 2010

Bankruptcy is not always your best option but it can be a life changing event. Generally, if you fit the criteria for several if not all of the following 5 points, you should consider bankruptcy. We’ll focus on Chapter 7, with some notes on Chapter 13 too.

Approaching Retirement
The older you are, the more the advantages you have of filing Chapter 7 or Chapter 13 bankruptcy. There is much more to it, but if you are facing debts which will cause you stress, anxiety, and money issues for the rest of your life, you should consider bankruptcy. A Chapter 7 bankruptcy is quite effective when you owe more than you cannot pay back in a reasonable amount of time, usually about 3 years. If you have a lot of assets and dependents, Chapter 13 bankruptcy may be better.

More Dependents
The more who depend on you, the greater the effect of bankruptcy. If you have a large family, for example, and a $50,000 medical debt hanging over you and a mortgage to pay, you may consider Chapter 7 bankruptcy. If you are single or a couple and you both work, Chapter 7 bankruptcy can still be a very smart decision. It’s just if you have others who depend on you to put food on the table, cash reserves are important.

Higher Your Debt
Another logical point: the more you owe, the more bankruptcy can help. While bankruptcy cannot discharge all your debts, it can discharge major credit and medical debts. If you owe a $25,000 credit card bill and recently lost your job, you may consider Chapter 7. If your family lacks insurance and your spouse is in the hospital for weeks, it can be impossible to pay these fees.

Less Income
As noted, the less money you have, the more bankruptcy can help. It is important to note your savings too. You may have some emergency or retirement monies, such as in an IRA account. You might consider cashing these out in order to avoid bankruptcy. Think twice before you spend money designated for your future. Filing bankruptcy can often be much safer than spending your whole savings.

Can you pay off in 3 years?
Finally, consider how soon you can pay off these debts. If you can pay it off in 3 years or less without spending all your savings and income, you may consider paying it off. On the other hand, if you the debt is simply impossible, Chapter 7 bankruptcy can be a big help.

Bottom Line on Texas Chapter 7 Bankruptcy – Your Savings, 401K, and Future

November 24, 2010

Quite often we make small problems big ones, especially when it comes to financial issues. While some are well instructed on how to handle financial issues, others simply lack the time. If you are unsure of your financial situation, this blog guide can help you with key financial decisions. The point here is that you should avoid spending moneys you don’t need to, namely your 401K, your savings, and retirement money.

Why File Chapter 7?
Chapter 7 bankruptcy in Texas is not a magic solution, but it can be used to effectively cancel monies owed you simply cannot pay. In other words, use it, but use it with commonsense. You can only file Chapter 7 bankruptcy, for example, every six years. Therefore, when you do use it, file Chapter 7 for maximum effectiveness.

But why file? To file would mean discharging most if not all your unsecured debts. Secured debts are monies owed like your home and car, where you stand to have them taken by not paying. Unsecured debts would be monies owed on your credit card and medical bill. For example, if you owe a $50,000 medical bill, you could discharge this unsecured debt with a Chapter 7 bankruptcy. But, technically by Texas law certain items are exempt from being taken by certain creditors, namely your home. So Chapter 7 bankruptcy is an option on the table, but not all collections against you will result in your home being taken or your car repossessed. Yes, this is a complex issue, but by reading guides like this you are getting a better understanding.

Your Savings
Back to the point of the bottom line, if you owe $25,000 to creditors, and have $10,000 in your savings, money you perhaps saved for your future, you might consider using it. Should you throw your savings away, or should you file bankruptcy? This is a tough issue. First and foremost, you don’t always want to spend your savings, especially when it only buys you time or does not cover the bill. If you had $10,000, it would not cancel the bill. You may consider using your savings, 401K, and retirement package to pay the bill. What happens if you lose your job? Again, this is a tough decision, and not one to make alone.

Your 401K
Typically spending your 401K does not solve the problem either. We went over this point. If you only buy yourself some time, or if you simply accumulate new debts, it’s pointless.

Retirement Money
Instead of spending your savings, money you need to live on now, you may consider borrowing from the future. Why not file bankruptcy instead? Its’ not always your best option, but you get legal protection from creditors, you can save literally thousands of dollars, and you won’t be living on a small pension or Social Security when you retire.

The Bankruptcy Option

Chapter 7 bankruptcy for Texans is not always the best option, but it can be. The majority of the time, if you are only buying yourself a some months or years by spending savings, 401k, and retirement money, file either Chapter 7 or Chapter 13 bankruptcy instead. Chapter 7 is best if you owe a lot of unsecured debts, and can completely eliminate most all debts. Chapter 13 can better protect your property and assets.

What is Your Texas Bankruptcy Lawyer’s Job?

November 22, 2010

A bankruptcy lawyer can be, for some time, the most important legal counsel you have. He or she has to advise you on how the laws work, help you discharge the most debt at the least loss, and allow for you to reap the rewards of a successful bankruptcy. In other words, your lawyer is your #1 when it comes to filing bankruptcy. Always hire an experienced lawyer if you are going to file. Why? As noted, the help is tremendous. Let’s go into more detail.

Advise You

A lawyer should advise you on any and all legal concerns you might have. While this is in general, with specifics such as handling creditors and discharging debt, you are also going to be making some big decisions. If you fail to capitalize on bankruptcy, it may hurt your credit and leave you with little to show for it. Should you choose Chapter 7 bankruptcy? This can eliminate large amounts of debt, such as credit card and medical monies owed. Is Chapter 13 bankruptcy better in some situations? It can help you protect your home. What is the Texas Homestead Exemption? It’s an innovative law, in that it helps you in incredible ways. These are the laws, options, and decisions you have, and unless you’re a bankruptcy lawyer, hiring one is essential.

Handle Creditors
Once you file bankruptcy, the automatic stay will stop all collections against you. At the end of the bankruptcy, most of your debts will be gone. Creditors may appeal your right to bankruptcy, or try to harass you even during the bankruptcy (which is rare). So what can you do? Let them speak to your lawyer; that’s what you pay him or her for. Your lawyer can handle any creditor issues, which can be a great relief.

Discharging Your Debt
Chapter 7 bankruptcy can be quite powerful in eliminating the most common forms of debt, namely credit card and medical. You have a $25,000 credit card bill because you lost your job … you owe the hospital $50,000 because your spouse has no medical coverage … you owe more money than you make in an entire year. What next? These are atypical situations where a Chapter 7 bankruptcy can truly give you a fresh start. You can discharge most all debts here, even your mortgage if you so choose (though you stand to lose the home). On the other hand, if you have more assets, can you protect them?

Protecting Your Assets
Yes, you can protect assets. Chapter 13 bankruptcy is quite useful if you want to protect your home from foreclosure. Say you are falling behind on payments because of other debts, but you do have an income. If you can afford to make some payments, you have a very good chance of protecting your home. Also, if you keep up on your mortgage, but not other debts, you can use the Texas Homestead Exemption to avoid creditors seizing your home. This can be tricky and a lawyer is important.

Fresh Start

Bankruptcy is not for everyone. But if you do file, do so with an experienced lawyer. The decisions you make, the debts you discharge, the assets you save – these can change your life. If you are unsure if bankruptcy is your best option, many experienced lawyers offer free initial consultations.

7 Benefits of Filing Dallas Chapter 7 Bankruptcy

November 19, 2010

Rebuild Credit
How does bankruptcy help rebuild your credit? If you owe $50,000, then discharge the debt with Chapter 7, won’t that hurt your credit? It will hurt your credit as bad as defaulting on the loan. You have a much better chance of rebuilding your credit after filing bankruptcy rather than doing nothing. A bank will feel more confident in giving you a loan if you owe nothing rather than if you owe a huge medical or credit card bill.

Discharge Medical Debt
Speaking of medical bills, this form of debt is the most common reason for filing Dallas Chapter 7 bankruptcy. You get sick, go to the hospital, have no insurance, and get a $25,000 medical bill. You get hurt, have to get medical attention, then find your insurance does not cover this type of injury. A loved one might get sick or hurt,and because you lack insurance, you’re faced with an impossible bill. It happens every day. Your best option may be to discharge the debt with a Chapter 7 bankruptcy.

Discharge Credit Card Debt

Credit card debt is the second leading cause of bankruptcy in Dallas. If you owe so much you cannot pay your mortgage, if you lost your job and ran up some debt, if you or your spouse made some buying mistakes – these can all result in impossible debts. The answer is not always to file Dallas Chapter 7 bankruptcy, but to eliminate the debt, it’s one of the best.

Protect Your Income
If you owe money because of a medical or credit card debt, you may fear wage garnishment. In the state of Texas, only the lender can take your home to repay the mortgage, but creditors can have your wages garnished. Bankruptcy stops this.

Discharge Your Mortgage

If you simply cannot afford to pay on your Dallas home mortgage, Chapter 7 bankruptcy can discharge the debt. If you fall behind in payments, you can buy yourself some time to find a new residence by filing.

Stop Collections
Who likes creditor harassment? First off, there are rules to be followed – you can, for example, stop harassment by writing your creditors a letter. While Chapter 7 bankruptcy should not be filed simply because of harassment, stopping collections is one major benefit. Creditors will have no more reason to harass you. If they continue, you can get your lawyer to help.

The Dallas Fresh Start
Texas has not been hit as hard by unemployment, bankruptcy, and foreclosure as some other states, but the reality is our nation’s economy has had better days. You have options beyond Chapter 7 bankruptcy, but if you have unsecured debts like credit and medical, this is a good option. In a matter of months, you can start rebuilding your credit and get a fresh start.

Filing Texas Chapter 13 Bankruptcy for Unsecured Debts

November 17, 2010

The problem many of us in Texas have goes beyond paying the mortgage. We have medical bills, credit card bills, car payments, tuition fees, regular weekly expenses which simply will not go down. So what are your options? Recently on Higgins And Associates we went over filing Chapter 7 bankruptcy in Texas for unsecured debts – monies owed on your credit card, outstanding medical bills, etc. This guide will focus on filing Chapter 13 at a time when it can benefit you the most.

What are unsecured debts?
Unsecured debts are monies owed on items you stand to lose if you don’t pay – like your home, car, boat, valuables like jewelry, entertainment items like an expensive TV, etc. These may be taken if you default on the bill.

What about your home?
If you fall behind in mortgage payments, you have options even after the foreclosure process begins. But, and this is important, if you file after the process begins you can only buy time to find a new residence. The Texas Homestead Exemption protects your home from being taken for most debts, except your mortgage lender. The lender can take the home if you default on the payments. On the other hand, if you file Chapter 13 bankruptcy before the foreclosure begins, you will at a minimum buy yourself some time, and if you can afford to continue making some payments, you can likely keep your home.

The Car
With Texas exemptions, you can keep up to $30,000 in assets as an individual or $60,000 as family when filing bankruptcy. This includes your car, but other items too, like jewelry or your TV.

Are you eligible?

According to, “Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual’s unsecured debts are less than $360,475 and secured debts are less than $1,081,400.”

How much will Texas bankruptcy cost?

To file Chapter 13 bankruptcy with a Texas court, you pay a $274 filing fee. (If you file Chapter 7, the fee is $299.)  Before this, you want to consider whether or not you need a professional bankruptcy lawyer. Unless you are a bankruptcy lawyer, you should hire one. The fees vary, but usually amount to $1,000 to $2,000. If you have a lot of secured debt, and stand to lose your valuable home, this fee is minor in comparison to the benefits of filing.

Why not Chapter 7?
You may get more benefits from Chapter 7, but if you make higher than the median income of Texas, you won’t be eligible. However, if you’re unemployed and/or have little income, you may not be able to afford a repayment plan. While Chapter 13 has some advantages, you have to pay your debts. If you have both options, ask your lawyer what would be best for you.

Texas Bankruptcy Options – Advantages of Chapter 13 Over Chapter 7

November 15, 2010

Even the federal government points out the advantages of Chapter 13 bankruptcy when compared to Chapter 7. While both have advantages and disadvantages, and though Chapter 7 is more common, there are some clear reasons for filing Chapter 13 in Texas. This guide explains them.

First, as noted on, “chapter 13 offers individuals an opportunity to save their homes from foreclosure.” How? If you’re in danger of foreclosure, if you’re behind on payments, Chapter 13 can help. Say you have a Fort Worth home, you are behind on payments, but you have an income. In this situation, Chapter 13 bankruptcy can stop a foreclosure before it gets started. You can pay back missed payments, making them part of the plan. You can pay on your mortgage over the life of the repayment plan.

You still have to pay when you file Chapter 13. The problem with filing Chapter 7 in Texas is that you stand to lose the home unless you pay outside the bankruptcy. If you are incapable of making payments, you might as well discharge the debt with a Chapter 7 bankruptcy. If, on the other hand, you can pay on your mortgage – even if you are somewhat behind – the Chapter 13 option is much better.

Let’s go over another federal government bankruptcy tip: “Another advantage of chapter 13 is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 plan.” How does this help you? You can lower payment amounts by filing this way. The problem with Texas Chapter 7 is, even if you have a lot of unsecured debts like medical and credit card debt, if you make too much money you are ineligible. If you make more than the average income for Texas residents, based on if you are one person or a family of two or more, then you can’t file Chapter 7.

In this situation, you do have the option of filing under Chapter 13. It doesn’t matter how much you make, only that you don’t owe hundreds of thousands. You can even lower interest rates over the course of your repayment plan. If you owe a lot of credit card debt – monies owed you simply cannot afford with your mortgage – Chapter 13 may be better as you can get time to pay on the debts and keep your home from being taken.

It should be noted how foreclosure works in Texas. We are different. If you owe a hospital or credit card company $100,00, they cannot take your home. If you fall behind on your mortgage, technically the lender has the option of foreclosing on your home – if you stop making payments. So a lender can take your home, but a creditor cannot. This is the Texas Homestead exemption, a very unique and useful law which can protect your home.

With a Chapter 13 bankruptcy, you can protect your home by making payments over time and stopping a foreclosure before it begins. Both Chapter 7 and Chapter 13 bankruptcies are useful for certain problems. It’s good to study them, but your best resource on making a decision is a Texas bankruptcy attorney.

3 Month Plan for Chapter 7 Bankruptcy In Texas

November 12, 2010

Bankruptcy is a life changing event, and it should be for the better. You can save money on debts. You can protect your home, or buy time to get a new residence. You can stop creditor harassment. You can protect your income from wage garnishment.

Bankruptcy is not easy. It requires time, patience, honesty, and most importantly, study. With the tips in this guide you can be free of most debt – and protect your assets – in a matter of months.

Get an Experienced Lawyer
If you are going to file bankruptcy, hire a lawyer. Hire a lawyer because he or she can explain how the process works. Are you eligible? What debts can you discharge? How you can protect assets like your home and car? What if you’re not eligible for Chapter 7? Is Chapter 13 bankruptcy better for you? A lawyer answers your questions, protects your legal rights, protects your income, and protects your assets.

Find Out All Your Debts
You can find out about your debts via a credit report. You may not know what is all on your record. You want to discharge the most debt with your Chapter 7 bankruptcy. Therefore, find your credit report – it can be scary to look at it, but hang in there – and see if all the debts are there and correct. You may be surprised that some paid debts are on your credit report; this does happen, and you can have them removed.

Where can you get your credit report? According to the FTC, you can get your credit report for free at This is a listing of all three national creditors.

What do you want to keep?

If you want to keep an asset, you must list it in your bankruptcy. If you try to hide an asset – some filers try to save a home or car – you are in danger of losing the ability to file at all. Simply filing Texas Chapter 7 bankruptcy does not mean you will lose everything. Most of us lose little to nothing when filing Chapter 7. You may have a home or property, a car, some valuable jewelry, an expensive TV, etc, and think this will be taken. Since Chapter 7 is called a “liquidation,” where you pay off debts but stand to lose assets, this thought is understandable.

However, if you can keep up on payments outside your bankruptcy, you have many protections. For example, the homestead exemption can protect your home from creditors (but not the government or your lender). Also, you can negotiate outside the bankruptcy, perhaps continuing to pay your car payments, and be fine. If you have bought in excess prior to the bankruptcy, these debts can be considered outside of it, so don’t run up your card. You do not want to start some bad buying habits, thinking it will be discharged; there are laws against this.

File for Effect
When you file, file at the right time. This means you file when you have the most debts.  You may also want to include your mortgage and car in the bankruptcy – which would mean losing them – because you cannot afford the debts. You have many more options than you might think. Wait for the high hospital bill to come in, for the high credit card bill to arrive, and then, when your bankruptcy can best discharge your debts, file.

Discharge Debt
It typically only takes 3-4 months to file a Chapter 7 bankruptcy. You can discharge the medical debt, the credit card debt, stop creditor harassment,and finally get a fresh start.

Get Your Texas Chapter 7 Bankruptcy Started

November 10, 2010

This bankruptcy guide can help you save some time, money, and worries. Bankruptcy is not an easy process, but if you can stay positive, if you can follow the laws, if you can work to protect your property and income while discharging your debts, you can reap the benefits.

Chapter 7 bankruptcy is a perfect way to discharge your debts. It’s a liquidation, where your assets are sold to pay off your debts.  Many think that “bankruptcy will take everything” or “bankruptcy will ruin my credit forever.” In fact, you rarely lose assets, especially big ones like your home and car. It does hurt your credit some, but there are strategies for improving it. After all, would a lender loan someone money who owed $20,000 or who owed $0? If you start small, opening a secured credit card, for example, you can start rebuilding credit and soon enough get new loans for a car and home.

You sometimes have to think outside the box on bankruptcy and credit issues. Many credit counseling programs explain how bankruptcy has too many costs. Well, you pay $299 to file Chapter 7 bankruptcy in Texas. You can discharge any amount of debt. You have legal protection against creditors. You can avoid getting wages garnished. You have far more options for protecting your home if foreclosure is a danger. Bankruptcy is a solution – be it an imperfect one – and it should be considered that way.

You pay $299, but what do you get? The most common problem we are having in Texas and the country is lack of medical coverage. Literally millions lack medical coverage. You go to the hospital for a serious matter, spend 3 days there, and owe $30,000, when you don’t even make that much money annually. Or you stay longer, and owe more than you might make in 5 years. This is the core reason for bankruptcy. A credit counseling company offers you no legal protection. If you do nothing, you risk losing everything.

On the other hand, many file bankruptcy not because of medical debt, but because of a credit card bill. While quite often these charges are unnecessary, there are also times, such as when you lose your job, when you have no other options. Credit card debt is the second leading reason for Chapter 7 bankruptcy in Texas. If your problem is spending too much, and you don’t stop, bankruptcy solves nothing. If you simply made some mistakes – and are willing to change and stop spending – it can solve some of these problems for you.

Will you lose your home? There is the Texas Homestead Exemption, which prevents creditors from taking your home, with the footnote that the mortgage company may have the right to bypass this. If you owe a $50,000 medical bill, the hospital cannot take your home. If you fall behind on your mortgage, the exemption does not protect you from the lender. So a foreclosure cannot be stopped in this way. You may prefer Chapter 13 bankruptcy.

If your main problem is one of secured debts – debts like your home – Chapter 13 may be more effective. Chapter 7 bankruptcy works well for unsecured debts, such as credit and medical monies owed. If you can file before the foreclosure process gets started, you can start paying in affordable amounts. If you tried a credit counseling agency, they can rarely help with secured debts, but bankruptcy can.

While filing fees are low, you should also consider a lawyer. Expensive, right? Well, figure out how much you stand to save and protect. An experienced bankruptcy lawyer charges from $1,000 to $2,000,  and helps you save far more than that.

The Dallas Chapter 13 Bankruptcy Solution

November 8, 2010

You may be able to save your home and/or buy valuable time by filing Chapter 13 bankruptcy. For Dallas residents, foreclosures are less of a problem than in other parts of the country, but if you lose your job or suffer some unexpected bill, filing bankruptcy can help. This guide briefs you on the basics of filing Chapter 13.

You’re Not Eligible

The Texas state median income defines the means test for Chapter 7 bankruptcy. If you make too much money, you may not be eligible for Chapter 7. This is not always bad; Chapter 13 offers more protection in secured debts, and you get more time to pay off bills. If you make more than the following, you may have to consider Chapter 13.

1 person: $38,801
2 person family: $55,660
3 person family: $59,011
4 person family: $66,145
More allowed income if you have a larger family.

You Owe Secured Debts

If you owe a lot of secured debt, you have much better protection with Chapter 13 bankruptcy. Say for example you live in Dallas and you want to file bankruptcy because of a major debt, but this debt is a credit or medical. These are unsecured debts. If you are eligible, Chapter 7 may be better. If you make too much money, Chapter 13 allows you to make payments over a more manageable period of time. You typically get 3-5 years, where a lot can change (such as getting a new or better job), allowing you to pay on debts.

Say you own a Dallas home, but your spouse loses his job and you start falling behind on mortgage payments. Where you may think the homestead exemption protects you – which we’ll be going over – remember that it does not protect you from the mortgage lender. Chapter 13 bankruptcy, on the other hand, can stop a foreclosure if you file correctly.

File Correctly

If you file too late, if you wait until the foreclosure process has started, a Chapter 13 bankruptcy may be pointless. Timing is everything when you’re considering bankruptcy to stop a foreclosure. So, if you stop making payments, act quickly. Start considering bankruptcy.

Understand the Homestead Exemption
As noted, you do have some protections with the homestead exemption, namely from creditors. However, it does not stop the lender from taking the home. That makes filing Chapter 13 bankruptcy to protect your Dallas home even more valuable. If you own a home in the city, worth $150,000, something you and your family have lived in for years, losing it can be life changing. Therefore, consider protecting yourself with a Chapter 13 bankruptcy.

Get Legal Help
Finally, you need a lawyer 100% of the time when considering Dallas bankruptcy. He or she can explain in more detail how the homestead exemption works, when to file for bankruptcy, if you should file Chapter 7, and when Chapter 13 is best. Legal help is necessary, and it won’t cost you a fortune. If you cannot hire a lawyer, you risk filing incorrectly and losing far more. Negotiate, get a loan, do whatever you can to hire an experienced lawyer. The benefits of bankruptcy far outweigh the fees.

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