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Things You Should Know Before You File for Bankruptcy

March 29th, 2019 at 4:18 pm

bankruptcy-filingMost Americans have some form of debt — mortgages, credit card debt, student loans, auto loans, and personal loans are all part of consumer debt and most Americans have a combination of them. For many people, the debt can be handled through smart budgeting and curbed spending, but some people need to use other measures. Bankruptcy is used when people can no longer pay their debt and offers a way for those in debt to get a fresh start. The decision to file for bankruptcy is a difficult one, especially since bankruptcy laws are so complex. Here are a few things you should know before you file for bankruptcy:

There Is More Than One Kind of Bankruptcy

For individuals, there are two different types of bankruptcies — Chapter 7 and Chapter 13. A Chapter 7 bankruptcy is the type that most people associate the word bankruptcy with. In Chapter 7 bankruptcy, most of your unsecured debts can be discharged, meaning you will no longer be responsible for paying them back. In a Chapter 13 bankruptcy, you set up a repayment plan that allows you to repay your debts over three to five years. The kind you choose largely depends on your specific circumstances.

Bankruptcy Is Not Free

Though it may seem counterintuitive, filing for bankruptcy is not free. It can actually become quite expensive. Filing for bankruptcy can cost between a couple of hundred to a couple of thousands of dollars, depending on whether or not you hire an attorney and how much the filing fees end up costing.

Your Credit Will Be Affected

 

Once you have filed for bankruptcy and your case is finished, you will have to begin the process of rebuilding your credit. Getting a bankruptcy does make your credit score drop, but it does not really matter whether or not you go into the bankruptcy with a high or a low credit score. Most people end up around the same score range after they are done with bankruptcies.

A Kerrville, TX Bankruptcy Attorney Can Help

It can be difficult to make the decision to file for bankruptcy. Some people feel like bankruptcy is a failure, but in reality, it can be the best decision some people make. If you are thinking that bankruptcy may be right for you, you need to talk to an experienced New Braunfels, TX bankruptcy lawyer. Understanding what you are getting yourself into before you file for bankruptcy is crucial, which is why the Law Offices of Chance M. McGhee are here. We can help you figure out which type of bankruptcy is right for you and the most strategic plan to benefit you. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.thesimpledollar.com/what-to-expect-when-filing-for-bankruptcy/

https://www.thebalance.com/top-things-to-know-about-bankruptcy-316198

https://www.investopedia.com/articles/pf/07/bankruptcy.asp

https://www.forbes.com/sites/larrymyler/2017/10/03/filing-for-bankruptcy-3-most-important-things-you-need-to-know/#611876127fe6

What Life Is Really Like After a Texas Bankruptcy

December 21st, 2018 at 6:36 pm

TX bankruptcy lawyer, TX chapter 7 attorney, Coming to the decision that a bankruptcy is your best option was probably not an easy journey. Bankruptcies still tend to have a negative stigma in today’s world, but for some people, it’s the best thing they could have done for themselves. Most people know what goes on when you are filing for bankruptcy and what that means, but what happens after a bankruptcy is often lost in the shuffle. Many people have their ideas of what life after bankruptcy is like, but those ideas are often muddled with unrealistic expectations. What really happens after a bankruptcy can change depending on your situation, but ultimately, your actions have a lot to do with it.

You Might Have to Change Your Lifestyle

The type of bankruptcy that you file for will have a lot of bearing on your lifestyle after you have completed your bankruptcy. In a Chapter 13 bankruptcy, you will be required to pay some or all of your debts with a repayment plan over three or five years. This means that you will have less expendable income and will have to devote more of your money to pay off debt. If you filed for a Chapter 7 bankruptcy, the majority of your debts will be forgiven, but that does not mean you can take up a frivolous lifestyle. You should be wary of spending too much money on unneeded items at your bankruptcy, no matter the kind.

You Will Probably Have a Hard Time Getting Credit or Loans

To lenders, a bankruptcy signals that they might not get their money back if they lend it to you. After you have gone through a bankruptcy, you will most likely be seen as a high-risk borrower, meaning that many banks and lenders will not even consider loaning money to you. The lenders who do consider allowing you to borrow money will often charge you very high-interest rates in order to make up for the high-risk factor.

You Should Start to Build a Savings Account

Opening and maintaining a savings account is an easy way to begin making your financial picture a healthier one. Even just putting away $5 or $10 a week can make a difference, especially if you have not had a savings account before. Having a little bit of money set aside for emergencies is always a good idea.

Our Boerne Bankruptcy Attorney Can Help Set You Up for Success

Many people come into bankruptcy expecting things to be a certain way after everything is said and done. Like many things, life after bankruptcy is not always what it seems. At the Law Offices of Chance M. McGhee, we can help guide you throughout your bankruptcy process. Our experienced New Braunfels bankruptcy lawyers will make sure the decisions you are making are in your best interest and beneficial fpr you. To schedule a free consultation, call our office today at 210-342-3400.

 

Sources:

https://www.bankrate.com/finance/debt/life-after-bankruptcy-1.aspx

https://www.investopedia.com/articles/pf/07/after-bankruptcy.asp

Signs Filing For Bankruptcy Might Be Your Best Option

December 7th, 2018 at 12:05 am

Texas bankruptcy attorneyIn today’s society, bankruptcy still has a stigma surrounding it. Many people think that if they file for bankruptcy they are failures or irresponsible for having to resort to such tactics. In reality, all kinds of people file for bankruptcy – rich and poor alike – for reasons beyond their control. Filing for bankruptcy can be a life-changing decision, which is why it should not be taken lightly. It is always a better choice to repay your debts than filing for bankruptcy, but for many people, their best option is to file for bankruptcy and start a clean slate. Making the decision to file for bankruptcy can be difficult, which is why we have compiled a list of three signs that filing for bankruptcy might be in your best interest.

You Have Already Tried Negotiating

If you have a lot of debt, one of the things you can do is contact your creditors to try to negotiate out a repayment plan that works for you. If you have already tried to do this and your creditors are not willing to work with you, then you do not have many other choices but filing for bankruptcy.

You Have Looked Into Consolidating Your Debts

If you have debt, especially credit card debt, another option is to refinance or consolidate your debt. This means that you will take out a personal loan to cover the costs of your credit card debts, and rather than paying back the individual credit cards, you will be making one monthly payment to your loan provider. This is often beneficial because the loan interest rate is often much lower than your credit card interest rates. If you have tried to consolidate your debt but you still have credit card debt, you might need to consider bankruptcy.

Your Liabilities Are Much Greater Than Your Assets

One of the major reasons people file for bankruptcy is because they simply do not have enough money to pay their debts. For example, if you owe $3,400 a month in debts and you only make $3,000 a month, you do not have much of a choice. If your liabilities greatly outweigh your assets like this, you may need to consider a bankruptcy.

A New Braunfels Bankruptcy Attorney Can Help You Make the Decision

Deciding that you would be better off filing for bankruptcy is a serious and life-changing decision. Filing for bankruptcy does not come without its challenges and you will have to be OK with the fact that you will have to deal with these challenges for a couple of years. If you feel like you are drowning in debt and you are not sure which way to turn, you should contact a Boerne bankruptcy lawyer to help you make a decision. At the Law Offices of Chance M. McGhee, we help people make the decision to file bankruptcy every day. We know the bankruptcy process inside and out and can help you prepare for what is to come when you file. Contact our office at 210-342-3400 to set up a free consultation.

 

Sources:

https://www.investopedia.com/articles/pf/08/bankruptcy-filing.asp

https://www.thesimpledollar.com/when-does-it-make-sense-to-file-for-bankruptcy/

https://www.thebalance.com/should-you-file-bankruptcy-960627

Bankruptcy Myths

November 30th, 2018 at 5:37 pm

Texas bankruptcy lawyerMost of the time when you are dealing with legal matters, it is not a simple situation to be in. This is especially true when it comes to bankruptcy. In the United States, there are a handful of different types of bankruptcies that individuals can qualify for, each with their own stipulations and requirements for eligibility. Even beginning the process of determining whether or not you are eligible for bankruptcy can be confusing, especially when there are so many myths and misconceptions surrounding this topic. Here are three of those myths and the actual truth behind them.

Only People Who Are Frivolous with Money File for Bankruptcy

While it makes logical sense, it just is not true. Many people get themselves into debt and file for bankruptcy. Sometimes, people think that those who file for bankruptcy just do not want to pay back their debts, but often, it is the opposite. Many people who end up filing for bankruptcy have explored all of their other options and tried almost everything they could to get out of debt before filing for bankruptcy. Courts will not consider:

All of Your Debt Will Be Wiped Out After a Bankruptcy

Most of your types of debt can be relieved with a Chapter 7 or Chapter 13 bankruptcy, but there are still some kinds of debt that cannot be wiped out when you file. Some types of debt that cannot be relieved include:

  • Child support or spousal support obligations;
  • Student loan debt;
  • Restitution for any crimes you have committed; and
  • Tax debts.

A Bankruptcy Will Ruin Your Credit

While you will definitely see a drop in your credit score, it will not last forever. Some credit card and loan companies will not allow you to borrow from them and the ones that do allow you to borrow will typically charge you higher interest rates. Your credit score will likely recover shortly after you file for bankruptcy, but the bankruptcy will stay on your credit report for seven to 10 years.

A New Braunfels Bankruptcy Lawyer Can Help You Get Back on Your Feet

You may think that a bankruptcy will ruin your finances forever, but it will not – it will just take a few years to get you back to where you were pre-bankruptcy. If you think that a bankruptcy is the best option for you to take control of your debt, you need the help and guidance of a Kerrville bankruptcy lawyer. The Law Offices of Chance M. McGee can guide you through the bankruptcy process from start to finish and provide you with the necessary advice and resources that you need to have a successful bankruptcy case. To schedule a consultation, call our office today at 210-342-3400.

 

Sources:

https://www.nerdwallet.com/blog/finance/5-bankruptcy-myths-dispelled/

https://blog.credit.com/2018/03/7-bankruptcy-myths-debunked-64540/

https://www.creditcards.com/credit-card-news/5-bankruptcy-myths-busted-1282.php

What Is a “Means Test” and How Does It Affect Bankruptcy?

November 15th, 2018 at 9:01 pm

Texas bankrutpcy lawyerThere are not very many requirements when it comes to filing for bankruptcy in the United States. The requirements differ depending on what kind of bankruptcy you are filing for: Chapter 7 or Chapter 13. Both types of bankruptcies will affect your finances, but a Chapter 7 bankruptcy forgives all of your debt, while a Chapter 13 bankruptcy creates a repayment plan for three or five years. Because of this, it can be harder to obtain a Chapter 7 bankruptcy because the requirements are a bit more strict. One of the ways it is determined if you are eligible for a Chapter 7 bankruptcy is by using a “means test,” which basically determines whether or not you can afford to pay back your debts.

Part One: Calculating Your Income

This part of the means test is basically looking at your income to determine whether or not your household’s income is below your state’s median level. This is accomplished by filling out all of the required forms. The court will look at your total household income and compare it to the median household income for the size of your family. For bankruptcy cases filed in Texas after November 1, 2018, the median income for a family of four people is $81,958. The means test is based on the past six months, but it also takes into consideration recent or upcoming changes, like a job loss.

Part Two: Calculating Your Debt

Next, you will be required to disclose your allowable expenses, which can be things such as rent, groceries, clothing, medical costs, car payments, and other things. The court will look at your income versus your allowable expenses and determine whether or not there is anything left over at the end of the month that could be put toward paying off your debt. You must disclose all of your expenses and the amounts for them, or your case could be dismissed.

What Now?

If you pass the means test, you qualify to file a Chapter 7 bankruptcy. If you fail the means test, you still may be allowed to proceed with a Chapter 7 bankruptcy, but your best option might be a Chapter 13 bankruptcy, which helps you develop a repayment plan to pay back your debts over three to five years.. If you still want to proceed with a Chapter 7 bankruptcy, you can wait another six months to see if your financial situation will pass the test.

Get in Touch With a New Braunfels Bankruptcy Attorney

Though DIY is all the rage these days, a bankruptcy is not something that you want to attempt to do yourself. If you are thinking of filing for bankruptcy, you need to contact a skilled Kerrville bankruptcy lawyer. Bankruptcy can be confusing, but the Law Offices of Chance M. McGhee is here to help. Contact us to get help with your entire bankruptcy process. Do not go it alone – call the office today at 210-342-3400 to set up a consultation.

 

Sources:

https://www.nerdwallet.com/blog/finance/bankruptcy-means-test/

https://www.thebalance.com/the-means-test-overcoming-the-presumption-of-abuse-316358

Which Bankruptcy Option Eliminates All Debt?

September 30th, 2018 at 5:39 pm

debtOne enticing benefit to filing for bankruptcy is the ability to discharge debts, enabling a fresh financial start. The United States bankruptcy code was created to allow honest debtors to free themselves from insurmountable debt; however there are various limitations. Unfortunately, these limitations restrict which debts become eliminated, reduced, or remain the same. Therefore, regardless of whether you file for Chapter 7 or Chapter 13 bankruptcy, some outstanding debts are untouchable.

Which Debts Are Eliminated?

Which debts discharge relies heavily on the type of bankruptcy filed by the consumer. Chapter 13 bankruptcy does not eliminate any debt initially, yet restructures the current sums into an affordable repayment plan. This repayment plan typically lasts three to five years, at the end of which any eligible debts are discharged. When you file for Chapter 7 bankruptcy, any unsecured loans become eliminated immediately. In some instances, unsecured debts make up all of the financial burdens. These debts include:

  • Credit card debt;
  • Personal loans;
  • Medical bills;
  • Payday loans;
  • Older tax debts;
  • Utility bills; and
  • Second mortgages.

Secured Debts Are Non-dischargeable

Chapter 7 bankruptcy does provide significant relief regarding secured, non-dischargeable debts, aside from freeing up a portion of the budget to make regular payments. Alternatively, Chapter 13 includes all financial liabilities in the repayment plan, including secured loans. Non-dischargeable debts include:

  • Taxes within the last three years;
  • Child support payments;
  • Alimony or spousal support obligations;
  • Student loans;
  • Traffic ticket fines;
  • Criminal restitution; and
  • Secured debt on a home or car you plan to keep.

Contact an Attorney

These guidelines are general statements intended to help you determine if bankruptcy may help your situation. Each consumer bankruptcy case depends on a variety of individual factors. Therefore, if you think bankruptcy is right for you, you should discuss your unique circumstances with a proven Boerne bankruptcy attorney. Contact the Law Offices of Chance M. McGhee for a free case review today by calling 210-342-3400. Our experienced team will assess the details of your case and provide honest feedback about the best course of action for your financial future.

 

Sources:

http://www.uscourts.gov/services-forms/bankruptcy

http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics

 

Reversing Real Estate Judgment Liens with Bankruptcy

April 26th, 2018 at 11:40 pm

Texas bankruptcy attorneyCreditors know how to work the system to get the money owed to them. In some cases, creditors have the courts put a lien on debtor’s possessions without the owner’s consent or knowledge, granting the creditor a legal claim over the property. By placing a lien on real estate, a vehicle, or personal property, a creditor secures payment of the money owed, sooner or later.

Buyers will not purchase items without a clear title, and a lien makes any title unclear. Although a creditor has the option to sell the property, such as in foreclosure, most wait until the debtor chooses to sell the property. At that point, seller pays the debt out-of-pocket or uses part of the purchase price to repay the debt. Fortunately, in Chapter 7 bankruptcy, you may be able to avoid the whole ordeal by getting rid of the judgment lien altogether.

Consensual Versus Non-Consensual Liens

Liens are placed on property both with and without consent. If consent is given, it happens at the origination of the creditor-debtor relationship. For example, either the debtor is asking for money to purchase property, such as a home or a vehicle, where the bank would then own the property, and the purchaser makes payments to the financial institution; or the debtor is asking for a financial loan and offers property they already own as collateral.

Alternatively, if someone wins a judgment against another party in court and money is owed, a judge may grant a judgment lien, which frequently happens with unpaid debt. This is an example of a non-consensual lien.

Lien Avoidance

Through judgment lien avoidance, you can permanently remove a judgment lien. If this occurs during bankruptcy, you will own the property, free-and-clear with no other payments. Lien avoidance is recommended, if possible, even if you do not intend to keep the property long-term, as you can then sell the property to pay for other things. To qualify, the following must be true:

  • The lien is a court-issued money judgment;
  • There is exempt equity in part of the property; and
  • Property loss impairs the exemption.

Reduce Courtroom Surprises

Many filers do not realize they have any liens on their property. Others discover partial claims. Sometimes, debtors do not have equity during the bankruptcy filing, but that changes down the road. In all of these circumstances, a New Braunfels, TX bankruptcy attorney can help. If there is a lien on your property and you have little, no, or even negative equity, the Law Offices of Chance M. McGhee will explore all of your options. Call us today for your free, no-obligation consultation at 210-342-3400.

 

Sources:

https://study.com/academy/lesson/types-of-liens-equitable-possessable-statutory.html

http://www.landlordstation.com/blog/what-is-a-judgment-lien/

Reclaiming Your Texas Driver’s License through Bankruptcy

April 12th, 2018 at 11:34 pm

Texas bankruptcy attorneyCreditors can take the issue of unresolved debt to court and have a judge issue a judgment against the debtor. In most states, judgments do not severely impact the life of a debtor thanks to existing exemptions that protect against losing homes and other possessions. However, in Texas, an unpaid judgement authorizes loss of driving privileges by suspending a driver’s license. The suspension goes on often indefinitely until there is a proof of repayment, or until the issuance of an automatic stay. Such a blow to one’s independence can wreak havoc on any life. Fortunately, reclaiming your license is one of the many surprising benefits of filing for bankruptcy.

How The Loss of Driving Privileges Turns Into A Catastrophe

Although for some the loss of legal driving privileges is a slight inconvenience, the set back is devastating for many others. Having driving abilities is not just about getting to work on time, it is also family availability and other daily life requirements. Furthermore, many employers require a valid driver’s license to maintain employment, such as in positions requiring travel. The next steps are up to the employer. Sometimes, an employer can choose to relocate an employee to an area that does not necessitate a license (or the handling of money, since financial instability creates a liability for many business operations). If termination of employment is the ultimate decision, the loss of income may affect the following payments:

  • Mortgage or rent;
  • Insurance;
  • Groceries; and
  • Electricity.

Get Your Driver’s License Back

If financial difficulty resulted in the loss of your driver’s license, losing your job only compounds the issue further. Fortunately, bankruptcy can enable you to get your license back. Filing for bankruptcy puts an automatic stay in place, which prevents creditors from pursuing all attempts to collect on debt, enabling the filer to reinstate the license without having to satisfy the obligation. Doing so in a timely manner can prevent job loss and the potential accompanying snowball effect the loss of income can have on bills.

Ask an Attorney

If you lost your license as a result of the inability to pay a bill, the last thing you likely want to happen is to experience a job loss on top of it all. Explore the option of bankruptcy with a San Antonio bankruptcy attorney today. At the Law Offices of Chance M. McGhee, we understand how frightening and embarrassing the thought of bankruptcy is, but we also know that waiting can make matters worse. Discover your options today by calling 210-342-3400 for your free and confidential consultation.

 

Sources:

http://www.govcollect.org/files/Texas_Debt_Collection.pdf

https://www.hrbartender.com/2012/recruiting/ask-hr-bartender-losing-your-drivers-license-can-impact-your-career/

 

Questions to Ask Yourself before Filing for Bankruptcy

July 24th, 2015 at 10:37 am

Texas chapter 7 lawyer, Texas bankruptcy attorney, Texas chapter 13 attorney,Americans make financial decisions every day of their lives, such as where to purchase food and how to save money on basic living expenses. However, few choices have implications that can match the seriousness of filing for bankruptcy.

Choosing to file for bankruptcy is a critical decision, but for millions of debtors, it is the first step toward financial stability. Although an attorney is the best source for guidance in this matter, here are three questions that can help you decide if bankruptcy is a smart option:

What Is My Current Financial Situation?

Your financial situation, which involves your asset value and income, can affect your eligibility for bankruptcy. If your income is too low, then you may not qualify for chapter 13 bankruptcy. If you file for chapter 7, then there is a chance that you would have to sell assets to pay creditors. These are important considerations before you decide to file.

Will Bankruptcy Actually Solve My Problems?

This is another question that may be difficult to answer without the help of an attorney. Each case is unique, so there may be bankruptcy alternatives that could apply to your situation.

Depending on the chapter you file, bankruptcy can resolve a long list of financial issues. First, it can stop harassment from collection agencies, according to Uscourts.gov. If you file for chapter 13, then you will have a structured repayment plan that can help you organize and manage your debt and finances. No matter which chapter you file, bankruptcy can ultimately lead to a life that is free from the stress that comes with insurmountable debt.

What Are My Long-Term Financial Goals?

Filing for bankruptcy does have certain consequences. It may be difficult to acquire a loan for a home, car, or another investment. You also may not have access to credit. As a result, bankruptcy may limit your financial goals. Before filing, it is important to evaluate these goals and determine how bankruptcy will affect them.

If you would like to learn if bankruptcy is a smart option in your situation, contact the Law Offices of Chance M. McGhee at 210-342-3400 to schedule a free consultation with an experienced San Antonio bankruptcy attorney.

Strategies to Avoid Credit Card Debt

July 17th, 2015 at 10:13 am

Texas bankruptcy attorney, Texas chapter 7 lawyer, Texas chapter 13 attorney,Credit can be a helpful tool when a person faces unexpected financial hardship, but it is also a major contributor to many Americans’ debts. The convenience of credit and bonus offers from credit card companies motivate many consumers to spend out of their budget.

By understanding how to manage credit cards responsibly, it is possible to avoid the stress and uncertainty that come with insurmountable debt. Read on to learn three strategies to avoid credit card debt.

Keep Diligent Records of What You Spend

Online shopping has made it particularly easy to overindulge with credit cards. People can spend thousands with the click of a few buttons.

According to the Federal Trade Commission, one of the best ways to avoid serious debt from online spending with credit is to keep a record of purchases. This will help you understand how much credit spending is affecting your finances.

Do Not Spend More than Half of Your Credit Card Limit

As a general rule, you should never spend more than half of your credit limit. This will ensure that you have credit available in a financial emergency. It can also prevent compulsive spending.

When Dealing with Debt Collection Efforts, Always Keep a Record

Collection agencies love to harass debtors who have outstanding balances. They often call debtors several times each day to request payments.

Even if you are in collections, it is important to understand that you still have rights. There are laws that limit the strategies collection agencies can use to recover payments. Be sure to keeping a record of your communications with debt collectors to protect your rights.

If outstanding credit card debt has become too much for you to handle, call an experienced San Antonio bankruptcy attorney. At the Law Offices of Chance M. McGhee, we can evaluate your situation and create a debt-relief plan. This may involve chapter 7 or 13 bankruptcy, or a bankruptcy alternative. To get started, call our office today at 210-342-3400 for a free initial consultation.

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