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Archive for the ‘Exemptions’ Category

Bankruptcy Concerns: Supreme Court Decides on IRA Exemptions

July 26th, 2014 at 10:17 am

IRA, IRA exemptions, San Antonio bankruptcy attorney, Supreme Court ruling, inherited IRA account, financial stability, retirement fundsMillions of people across the country have been living under the auspices that securing funds in 401(k)’s, IRA’s, and other long term accounts will ensure the financial stability of both themselves and their loved ones. These accounts are structured to prevent the need for a bankruptcy attorney, especially in the case of an inheritance. However, due to a recent Supreme Court ruling regarding inherited IRA accounts, this may no longer be the case.

Traditionally, companies can offer incentives to employees for the purposes of retention as well as stability including benefits such as pension plans, 401(k)’s, and Individual Retirement Accounts (IRA). Often, these accounts are used for retirement purposes, with many employers matching personal contributions into the account to a certain percentage. These accounts generally have beneficiaries in the event of the death of the policyholder.

In the past, these accounts could be transferred into an inherited IRA account, making them completely exempt by federal law in bankruptcy cases. This is no longer the case, however. In a Supreme Court decision handed down this year, any money that is inherited is no longer considered a retirement fund, therefore making it accessible to creditors in case of debt.

It has recently come to light that medical bills are in fact one of the leading causes of bankruptcy in America. As people get older, they become much more susceptible to injuries, illnesses, and subsequently very high medical bills. If your spouse was the primary moneymaker in your marriage and he or she passes away leaving you with these bills, the implications of the decision can be far reaching.

If inherited IRA accounts are no longer considered retirement funds in bankruptcy court, and medical bills pile up from a deceased spouse, you may not have the financial security you once thought you did. If you are facing overwhelming debt from a deceased spouse and are considering bankruptcy as a viable option, consult with a Texas attorney to explore all options possible.

Account exemptions during bankruptcy can seriously affect long term financial stability. The Law Offices of Chance M. McGhee, located in San Antonio, Texas and serving clients across the surrounding counties, can provide you with the legal advice you need to get through hard financial times. Please contact an experienced San Antonio bankruptcy attorney today to discuss your situation.

Property Exemptions for Bankruptcy in Texas

March 17th, 2014 at 12:12 pm

bankruptcy exemptions, Texas, federal exemptions, Texas bankruptcy exemptions, types of bankruptcy, debtLosing your job or getting expensive medical bills can have devastating effects on your budget.  Without ample savings, it can be hard to make monthly payments, and eventually you may lose your car or even your home.

However, bankruptcy can stop foreclosure, repossession and wage garnishment through selling property or reorganizing existing debts if you are earning income. However, filing for bankruptcy does not mean losing all your worldly possessions. When filing your paperwork, you may choose to use either federal exemptions or the exemptions set out by the statutes of Texas.

Both the Federal and State exemptions allow the debtor to protect equity in their primary residence. This is called the Homestead Exemption and it does not provide any protection to rental or investment properties. Under the federal exemption, you can shield up to $22,975 of equity from a bankruptcy trustee. The homestead exemption in Texas is not limited by the amount of equity in the home, but the size and location of the property. It cannot exceed an acre if it is located in a populated city, village or town.  In rural areas, the exemption can be as large as 100 acres.

Personal property, other than real estate, also has exemptions that protect it during bankruptcy based on the kinds of property. For example, up to $3,450 can be exempted for a motor vehicle under Federal exceptions.

The exemptions in Texas allow for each driver in a household to use.  But the total allowance for all types of property in Texas is mere $30,000 and double for a family. In that case it is important to have a clear idea of how you can use the most of your exemptions to cover home furniture, food, clothing, and other important supplies.

There are other exemptions that should be reviewed while filing for bankruptcy, such as, wages, pensions, insurance.  Contact an experienced bankruptcy in San Antonio today who can help you determine the best step for your finances if bankruptcy is in your future.

What is the Texas Homestead Exemption?

January 12th, 2014 at 4:27 pm

illinois texas homestead exemption lawyerBefore heading into a personal bankruptcy, it is helpful to know as much as possible about federal and state laws and rules affecting your case. Texas has very unique homestead laws that you should know about before petitioning for bankruptcy. If you are thinking about bankruptcy as an option, talking over your situation with an attorney could be extremely helpful for getting your questions answered and putting you at ease.

If you file for bankruptcy, you can protect the total value of your home under this exemption. It’s important to note that there are several critical stipulations in order for a homeowner to be eligible for this exemption. A rural homestead for the head of the family cannot be more than 200 acres including the space the property is located on and a single adult cannot claim any more than 100 acres. In an urban area, the space is limited to ten acres.

In Texas, you are able to choose between the federal bankruptcy homestead exemption or the state exemption, but you cannot flip back and forth between these two systems. You have to elect whether to move forward with state exemptions or federal exemptions for your whole case. If you decide to use the Texas homestead exemption, you have to submit a form to the County Recorder’s Office prior to filing for bankruptcy.

You will be looking for a form titled “Application for Residence Homestead Exemption” and you might need to contact your local appraisal district for more specific information. If you don’t file this paperwork on your own, the court can do it for you, but bear in mind that they will charge you the fees and expenses for doing so.

If you are considering bankruptcy in Texas and would like more of your questions answered about property exemption, contact a San Antonio bankruptcy attorney today for a consultation.

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