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Archive for the ‘Bankruptcy Alternatives’ Category

Pay off Debt and Boost Your Credit with the “One-Two Payment Plan”

July 31st, 2015 at 10:56 am

Texas bankruptcy attorney, debt relief, Texas chapter 7 lawyer,Despite the ominous headlines about the national debt, the percentage of American households that have debt has actually decreased in the last decade, according to the National Census. Still, millions of Americans file for bankruptcy each year due to medical bills, lost employment, and other factors.

If you are facing insurmountable debt, then bankruptcy may be a viable option. There are also alternatives to bankruptcy that can help you manage payments and inch toward financial security. This article will discuss one such method, known as the “one-two payment plan.”

Break Down and Prioritize Your Debt

You might be familiar with the phrase “prioritize your debt,” but this can be a somewhat nebulous piece of advice without a thorough understanding of your current financial state. By carefully examining all of your debts and taking note of balances, interest rates, and payment histories, you will be able to identify which debts to pay first. These are usually the ones with the highest interest rates.

Create a Budget for Paying Debt

After identifying which debts to address first, it is time to create a monthly budget for payments. Often, people mistakenly adjust this budget after paying off their highest priority debt. However, it is critical that you maintain this budget until you have paid off all creditors. This not only will help you pay debts faster, but it will also improve your credit score with a steady history of consistent payments.

When in Doubt, Seek Professional Advice

Although the one-two payment plan can make a significant difference in your financial life, debt can be a difficult hurdle to overcome. In many cases, filing for bankruptcy is an intelligent decision that offers debtors a faster path toward financial stability.

If you would like to learn if you are a good candidate for bankruptcy, contact the Law Offices of Chance M. McGhee for a free initial consultation. As an experienced San Antonio bankruptcy attorney, Mr. McGhee can evaluate your financial situation and provide valuable guidance. To schedule a consultation, call our office today at 210-342-3400.

Are There Alternatives to Bankruptcy?

May 15th, 2015 at 9:04 pm

Texas chapter 7 lawyer, Texas chapter 13 attorney, Texas bankruptcy attorney,If you are considering bankruptcy, then you probably have several questions and concerns related to the bankruptcy process. There is no doubt about it: Filing for bankruptcy is a serious decision that can affect your personal and financial opportunities.

Here are the answers to three common questions about bankruptcy:

What Are the Alternatives to Filing for Bankruptcy?

In many cases, filing for bankruptcy is a smart decision that puts debtors on the path toward a debt-free life. However, it may not be the only option. Sometimes, aggressive budgeting and smart financial planning are enough to pay off debts.

Each case is unique, and there is no one-size-fits-all solution to repaying debt. Before you decide to file for bankruptcy, you should discuss the options with an attorney. Credit counseling services may also be helpful.

Will Bankruptcy Destroy My Credit?

According to the Federal Trade Commission, bankruptcy will stay on your credit report for as long as 10 years. Though this may seem like an eternity, many people do see their credit score steadily improve after filing for bankruptcy. Bankruptcy may impact your credit score, but refusing to address your debt is an even worse decision.

Will I Lose My Home during Bankruptcy?

Depending on the chapter they file, some debtors face foreclosure. Filing for chapter 13 bankruptcy is one way to maintain your home.

Chapter 13 bankruptcy involves the creation of a repayment plan, so it allows debtors to keep both their dischargeable and non-dischargeable assets. However, chapter 7 involves the liquidation of assets, and filing this chapter could lead to foreclosure.

Choosing which chapter to file is one of the most important steps in the bankruptcy process. Your income and several factors will affect this decision. An experienced bankruptcy attorney can recommend a bankruptcy chapter that would be ideal for your particular case.

If you would like to speak with a San Antonio bankruptcy attorney, contact the Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation.

A Brief Guide to Managing Credit Card Debt

January 16th, 2015 at 11:26 am

managing credit card debt, San Antonio bankruptcy lawyerAlthough most Americans have some form of debt, many could have avoided financial hardship by responsibly managing credit cards. Having funds instantly available is a great convenience, but overspending can put a person in a world of trouble.

Minimizing expenses is the first step for getting debt under control. Then, develop a budget that incorporates personal income, assets, and expenses. This can be a difficult task, which is why you should consider consulting a financial advisor or an attorney. If the debt amount is too great to pay off in a reasonable time period, consider discussing the situation with a bankruptcy lawyer.

Reasons and Alternatives to Canceling Credit Cards

According to one source, the most common reason for a person to close a credit card account is to achieve greater financial control. However, closing an account can actually harm your credit score.

There are a number of effective alternatives to closing a credit card account; one of the most common is to contact the creditor to renegotiate a new interest rate. If possible, it is best to keep an account open as its age will factor heavily into one’s credit score.

How to Cancel a Credit Card the Right Way

If canceling a credit card seems to be the only viable solution, be sure to do it in a way that minimizes the impact on your credit score. The most important fact to keep in mind is that canceling a credit card does not make the debt go away; the amount will simply transfer to a collections agency.

In order to avoid collections, cancel the card after paying the balance in full. Also, consider opening a low-interest credit card soon after the cancellation. This may prevent your credit score from lowering.

If you are dealing with crushing amounts of debt from credit cards, loans, or medical bills, bankruptcy could be the answer. To speak with an experienced San Antonio bankruptcy attorney, contact the Law Offices of Chance M. McGhee at 210-342-3400 to schedule a free consultation.

Three Proven Methods to Improve Your Credit Score

November 13th, 2014 at 8:59 am

improve credit score, San Antonio bankruptcy lawyerTo say that a person’s credit score is important is an understatement. Your score not only affects your ability to take out loans and successfully apply for credit cards, but it also plays a role in applying for insurance, leasing a car, and even getting an apartment. More than just three numbers, a credit score is a measurable value of how trustworthy a person is with money and payments.

For these reasons, you should make every attempt to raise your credit scores as high as possible. Here are some helpful ways to boost and maintain a respectable credit score:

1. Start with What You Have

As mentioned before, it helps to think of a credit score as an indicator of financial responsibility. That said, the road to a better credit score begins by analyzing one’s own financial situation. While this may require sitting down with a professional, here are some basic strategies to get started:

  • Focus on paying off credit cards by making monthly payments;
  • Strive to keep balances low on credit cards;
  • Make attempts to pay off debt instead of moving it around; and
  • Keep card accounts open.

These are some basic options available to anyone with one or more credit card accounts. These steps may not be easy, but accomplishing them can go a long way toward improving one’s credit score.

2. Open New Credit Card Accounts

If you have no credit at all, it is imperative to start building it. A smart first step is applying for a credit card. For those who already have lines of credit and are looking to boost their score, it may be worthwhile to open a new account.

It is important to remember that it is quite easy to get over your head when it comes to credit cards. Responsible use of a new account, however, can lead to a significant credit score boost.

3. Do Not Spread Small Charges across Different Cards

Making small purchases, usually under $100, across different credit cards can ultimately harm your credit score. It is best to rely on as few cards as possible. Having small amounts of debt across various cards, often referred to as “nuisance charges,” is not only bad for your credit, but it also can quickly build up to create a difficult situation.

If you are looking for a San Antonio, Texas bankruptcy attorney or are curious about how bankruptcy might work for your financial situation, contact the Law Offices of Chance M. McGhee. Call 210-342-3400 to schedule a free initial consultation.

Warning Signs of Financial Trouble

September 24th, 2014 at 7:30 am

Bankruptcy Financial TroubleAll of us struggle with finances at one time or another. However, for many people, that struggle may become overwhelming and feel as if it is never-ending. For those people, bankruptcy can often be the first step to gain control over their financial future.

There are certain signs that financial advisors point to as red flags that your debt has become unmanageable and bankruptcy should be considered. These signs include:

  • The balance of your credit card debt continues to increase, yet your monthly income is either staying the same or has decreased;
  • You pay only the minimum amount due on your credit cards. Some months, you pay even less than the minimum or completely miss the payment;
  • You have multiple credit cards and they all have balances on them;
  • When you receive an offer for a new credit card, you immediately apply;
  • You are using credit cards to pay credit card bills. If you have applied for a credit card, only to take cash advances in order to pay other credit card bills, that is a definite red flag to serious financial trouble;
  • You are close to or at the limit on most or all of your credit cards;
  • You are charging more each month on your cards than you are sending in for your monthly payment;
  • You are using your cards to purchase food, gas, utility bills and other life necessities;
  • Your credit cards are no longer used for ‘extras’ or for convenience sake. Instead, you are using them because you do not have any money;
  • The phone is ringing and letters piling up in your mailbox about your late bill payments;
  • You do not know the true amount of what your total credit card debt is, and you do not want to know.

If you recognize your situation in this list, then it may be time to consult with an experienced San Antonio bankruptcy attorney. Find out what your best options may be to help and get you back on the road to financial recovery.

Why Filing for Chapter 7 Bankruptcy May Be the Answer for You

September 22nd, 2014 at 8:29 am

Chapter 7 BankruptcyLet’s face it: bankruptcy is a daunting prospect. Many first-time filers feel stressed, anxious and even overwhelmed at the idea. The truth, however, is that bankruptcy comes with many benefits: no more calls from creditors and no more worrying about losing your home, to name two.

When most individuals think of bankruptcy, Chapter 7 comes to mind. That is because it is the most common type of bankruptcy.

According to UScourts.gov, Chapter 7 allows for an immediate stop of wage garnishments, home foreclosure, phone calls from creditors and repossessions. A trustee will evaluate your assets to see if liquidation is an option, but in most cases, filers can keep their properties.

Ultimately, very few creditors appeal the results of creditors’ meetings. The bankruptcy process ends with the court wiping away or discharging eligible debts.

It is important to note, however, that the court cannot discharge all types of debt. Ineligible debts include school loans, child support and employee tax debts.

Another advantage of Chapter 7 is the relative speed of the process. In fact, it usually takes less than six months from the time you file for Chapter 7 bankruptcy to become relieved of debt.

There is a tradeoff, of course. Filing for bankruptcy means you cannot apply for credit for up to 10 years. Still, filers enjoy the relief that comes with having a plan and seeing the light at the end of the tunnel.

If you are considering filing for bankruptcy in San Antonio, Texas, we can help. Chance M. McGhee is a San Antonio bankruptcy attorney. He will sit down with you, examine your situation and help you determine if filing for bankruptcy would be the right solution.

Mr. McGhee will also explain the pros and cons of Chapter 7 bankruptcy so you are aware of how the process works. To schedule a consultation, please call our office at 210-342-3400.

2014 is the Year to Get Rid of Debt

January 28th, 2014 at 5:58 pm

Since the ball dropped on New Year’s Day, people have been trying to keep their resolutions. Whether that is quitting smoking, losing weight, or just improving quality of life, keeping up with resolutions can be a challenge. Another common resolution is to get out of debt, and 2014 could be the year for it.

eliminate debt IMAGEThe first step to tackling debt is to list all outstanding balances. Include everything that you might owe for your mortgage, student loans, auto loans, credit card bills, or other bills. It is also important to include the interest rates on these bills so that the most expensive debts are dealt with first.

The next step is to track your spending. Using a year’s worth of bank statements and credit card statements, find out what you spend each month. This will let you see which expenses are necessary and which are not. Use this as a starting point in creating a budget that you can live with, and stick to it. That will allow you to trim any wasteful spending and reallocate those funds to getting rid of debt quickly.

While fun activities may be difficult to cut out, they should be the last thing to budget for. Remember that credit cards are not free money, you will have to pay them off and you will be charged interest on any outstanding balance every month. Celebrate your success when you reach milestones so that you will stay motivated to see your plan to the end.

If you have tried all these steps and still cannot get ahead, then it is time for plan B. Maybe you have lost your job, or experienced an expensive illness or injury, or other unexpected event that makes it difficult to get out of debt. Filing for bankruptcy can let you start over financially. Contact an experienced bankruptcy attorney in San Antonio to review your finances today and make this year the one where you get out of debt.

What is a Chapter 20 Bankruptcy?

December 13th, 2013 at 3:24 pm

piggy bankA Chapter 7 bankruptcy is a common form of bankruptcy because it excuses the filer from all eligible debts.  It is commonly referred to as a liquidation bankruptcy because debts are eliminated by the sale of property and other assets. Creditors are repaid through the proceeds of those transactions.

A Chapter 13 is also called the wage-earner’s bankruptcy.  If someone is earning an income but cannot keep up with past due payments, then a Chapter 13 bankruptcy can give them time to pay those debts. There is a repayment plan that last from three to five years and is based on each person’s income.

Occasionally there are cases when nether Chapter of bankruptcy is appropriate. While a Chapter 20 bankruptcy is not a term found in the bankruptcy code, it is a common strategy to get a fresh start.  It is the process of filing two bankruptcies right after each other to resolve difficult financial situations.  The approach is filing for Chapter 7 protection and then for Chapter 13.

The Chapter 7 bankruptcy lets you eliminate dischargeable debts which does not include child support, taxes, or student loan debts.  If your debts are too high to qualify right away for a Chapter 13 bankruptcy, the Chapter 7 bankruptcy can eliminate enough to become eligible.  That can allow you to focus the majority of your income on debts that cannot be discharged.

The disadvantages of a Chapter 20 filing is you can’t receive a discharge during the Chapter 13 part of the process.  It is also possible that a bankruptcy trustee will object to your Chapter 20 bankruptcy.  They can claim that your Chapter 13 filing is in bad faith.  If that happens, you will be responsible for providing proof that it is necessary given your situation.

If you are concerned about making your monthly credit card payments or losing your family home, then bankruptcy might be an option for you.  Talking to a legal professional can show the benefits of each Chapter based on your situation.  Contact an experienced bankruptcy attorney in San Antonio today.

What You Need to Know Before Filing for Bankruptcy

December 6th, 2013 at 11:22 am

If you are considering filing for bankruptcy in Texas, there are several things to consider before filing. While bankruptcy is a great way for many Americans to discharge or reorganize their debt, it could actually be a detriment for some families. In the wake of the Great Recession, the number of personal bankruptcies rose, according to a report from the Columbia Law School. In 2011, according to the report, bankruptcy filing “totaled about 5,800 per million individuals, meaning about one in every 175 Americans filed for bankruptcy protection.” This number was even higher in 2010, during which one in every 150 Americans filed.  Signing testament

Now that the Recession has receded, many families that were close to insolvency are now on solid financial ground. Because of bankruptcy’s prevalence, however, many people who could otherwise solve their debts differently may think bankruptcy is their only option. The first step to determine if you should file for bankruptcy, according to the USA Today is to determine if you are judgment proof. “If you’re judgment proof,” according to Lawyers.com, “creditors can do virtually nothing legally to obtain money or property from you.” Examples of individuals who are judgment proof are those who have no assets to be collected, have insufficient property to pay a creditor’s claim, or who are protected by laws “that exclude wages and property from being used to pay a debt.”

Another factor to consider when you are contemplating bankruptcy, according to the USA Today, is to know if your state allows wage garnishment. Texas does NOT allow wage garnishment, except for child support, alimony, taxes, and student loans, according to the office of the Texas Attorney General. You should also consider whether or not you qualify for mortgage modification, according to USA Today. In many cases, once a family had the opportunity to modify their home loan to one that was more affordable, filing for bankruptcy was no longer necessary.

To determine if filing for bankruptcy is the best option for you, the importance of speaking with a qualified Texas bankruptcy attorney cannot be overstated. Don’t go through it alone. Contact the Law Offices of Chance M. McGhee today.

Bankruptcy Terminology: What is Reaffirmation?

November 29th, 2013 at 11:57 am

texas-reaffirmation-bankruptcyFiling for bankruptcy is a difficult decision. However, bankruptcy is an important tool that gives people a second chance despite the curve balls that life may throw. Indeed, the reason behind the United States Bankruptcy Code is an acknowledgment of the reality that life sometimes just happens.

It is unfortunate that bankruptcy has such a negative stigma. Bankruptcy is an invaluable tool, and if used properly, it allows persons to shed off undesired liabilities while retaining useful assets; just ask Donald Trump.

With proper planning, bankruptcy can even allow a person to continue inhabiting the same home or drive the same car while getting rid of undesired debt. This is all thanks to the concept of reaffirmation. Reaffirmation allows bankruptcy filers to choose to remain liable for the debt that encumbers certain assets, thus keeping those assets.

For example, assume that a person who decides to file for bankruptcy wants to keep a car that they have financed; this may be the vehicle used to make a living or to drive children to school. Under bankruptcy rules, if a person does not reaffirm the debt associated with the car, the bank that financed the purchase would repossess the vehicle and dispose of it as they see fit.

However, a person may reaffirm the debt through a reaffirmation agreement, which allows the debtor to keep the property by continuing to remain liable for the debt despite the bankruptcy. In other words, the bankruptcy filer is promising to continue making the payments on the loan as though the bankruptcy did not happen.

Reaffirmation is a serious matter, however, and people must make certain it is the right thing to do. For example, if the car is worth substantially less than what one owes to the bank, it would make little sense to reaffirm the debt.

While it is true that bankruptcy is a difficult decision, an experienced Texas bankruptcy attorney can ensure that one leverages it to get a fresh start.

Call today for a FREE Consultation

210-342-3400

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