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Archive for the ‘Financial Stress’ Category

The Poverty Prejudice

March 9th, 2015 at 1:58 pm

Texas bankruptcy attorney, bankruptcy bias, Texas Chapter 7 attorney,What do attitudes about the nature of poverty tell us about bankruptcy filings?

In 1995, 60 percent of Americans said that poor people did not show enough initiative to lift themselves out of poverty, while only 30 percent acknowledged that circumstances beyond the person’s control caused wealth or poverty. 19 years later, these figures had shifted to 44 percent and 46 percent, respectively.

When asked to identify these external factors, some pointed to low-wage jobs that do not pay enough for people to get ahead, while others observed that wealth or poverty was essentially a matter of being born into a wealthy or poor family. Still others blamed the high number of government assistance programs that, they claim, encourage people to remain poor.

A pollster summed up the findings by saying that “Americans have complex contradictions in their attitudes.”

Why People File Bankruptcy

The idea that poor people are somehow defective is not at all unusual. Many people attribute the extreme poverty in some Latin American countries to the so-called mañana culture. “I’m sorry I’m late, but I’m on Latin time” is a lighthearted excuse for tardiness to a business meeting that has some very real cultural underpinnings.

Many people place bankruptcy debtors in this category. They believe that filers were financially irresponsible and engaged in overspending, particularly with regard to chapter 7 liquidations. Poor spending and saving habits do lead to bankruptcy in some cases. In other cases, the reasons are outside the person’s control, such as:

  • Divorce or separation;
  • Medical debt;
  • Family emergency; and
  • Job loss or business downturn.

In a large number of cases, several of these factors may come together to form something of a perfect storm. For example, a growing family whose income has increased every year may buy a house that is slightly larger than they can afford in anticipation of future needs, but the house becomes burdensome after a job loss or divorce triggers a temporary income loss.

If you have more debts than you can currently pay, chapter 13 bankruptcy allows you to put yourself on a payment plan to catch up. While you’re in bankruptcy, creditors cannot take any adverse action against you without special permission from the bankruptcy judge. That includes repossession, foreclosure, and even annoying collection calls.

To claim your fresh start, contact an experienced San Antonio bankruptcy lawyer. Call The Law Offices of Chance M. McGhee at 210-342-8400.

Will I Lose My Security Clearance If I File Bankruptcy?

March 3rd, 2015 at 9:30 pm

Texas bankruptcy lawyer, Texas Chapter 7 attorney, Workers at Lackland Air Force Base, Fort Sam Houston, and Randolph AFB, as well as the defense contractors in and around the Alamo City, sometimes hesitate to file bankruptcy because they are afraid they may lose their security clearances. First of all, it is never a good idea to let fear dictate your financial and legal decisions. Second, and more importantly, a voluntary Chapter 7 or Chapter 13 petition does not mean the end of your security clearance, according to both federal law and Department of Defense regulations.

Federal Law

Bankruptcy exists to give people a fresh financial start, and not to punish them for “mistakes” they may have made in the past or to pile misfortune on top of misfortune. So, under 11 U.S.C. 525, it is illegal for any governmental or private employer to make an adverse employment decision on the basis of a bankruptcy filing. In other words, your boss cannot refuse to hire you, refuse to give you a promotion, or fire you simply because you were a debtor in a voluntary bankruptcy.

Section 525 also states that a student cannot be denied a loan or grant solely on the basis of a bankruptcy filing.

DoD Rules

Directive 5220.6 essentially determines who receives a security clearance. There are a number of factors to consider – loyalty to the United States, ties to a foreign country or government, sexual behavior, personal conduct, financial considerations, alcohol and drug use, emotional problems, criminal history, prior security violations, outside activities, and misuse of IT devices. Negative information in any one area, or even in several areas, does not necessarily disqualify a person. For example, Jane may have Russian in-laws, attend AA meetings, and be bipolar, but she may still be eligible for a security clearance.

Guideline F addresses financial considerations. There is a valid concern – persons with financial problems may be tempted to sell secrets to generate funds. But the Guideline specifically lists some mitigating factors, including:

  • Counseling: Debt counseling and “clear indications” that the matter is under control are key mitigating factors. All Chapter 7 debtors receive at least two debt counseling sessions and have no more unsecured debt after they receive a discharge.
  • Lack of Control: Many people file bankruptcy due to circumstances that were either totally or mostly beyond their control, such as “a loss of employment, a business downturn, an unexpected medical emergency, or a death, divorce or separation.” Guideline F specifically names these scenarios as mitigating circumstances.
  • Good Faith Effort to “Resolve” Debt: Guideline F specifies “resolve” in addition to “repay” debt. If you have more debts than you can pay, bankruptcy is the best way to resolve the situation.

The bottom line is that Directive 5220.6 punishes financial irresponsibility, which is often unrelated to a bankruptcy filing. Furthermore, if you are revoked or denied, you have the opportunity to request a hearing and make the hearing officer aware of these applicable mitigating circumstances.

If you need to file bankruptcy to get out of debt or save your home,c6ntact an experienced San Antonio bankruptcy attorney. Call the Law Offices of Chance M. McGhee at 210-342-3400 today for a free consultation.

Understanding the Different Forms of Debt

December 16th, 2014 at 11:06 am

Texas forms of debt, San Antonio bankruptcy lawyerMany Americans are aware different types of debt exist, but may not know some forms of debt are more manageable than others. The type of debt also can affect an individual’s options when trying to file bankruptcy.

According to Investor Place, the average American citizen carries $225,000 or more in debt. This accounts for America’s total debt in credit cards, mortgages, and various loans, as well average interest rates and the percentage of citizens with more than $500 put away in a savings account.

Credit Card Debt

Debt from credit cards is incredibly common. As an unsecured form of debt, banks and lenders consider an individual’s credit score when determining eligibility for credit cards and their credit limits. Unfortunately, high interest rates can make credit card debt escalate quicker than most people realize. Also, having too much debt on a card—even if the card has not reached its limit—can reflect poorly on one’s credit score.

The key to managing credit card debt is to keep balances about halfway below the spending limit and to meet or exceed each monthly payment. This will go a long way toward building good credit, making an individual appear reliable.

Debt from Loans

There are a variety of loans available to the average consumer. Auto loans, business loans, and mortgages are some of the most common.

If you are struggling to keep up with high amounts of debt from credit cards, loans, or a combination of both, bankruptcy might be a viable option. As an experienced and trustworthy Texas bankruptcy attorney, Chance M. McGhee is ready to help those struggling under crushing amounts of debt. He has been refining his understanding of bankruptcy law for the past 20 years. Contact the San Antonio Law Offices of Chance M. McGhee today at 210-342-3400 for 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.

Texas Ranks as a Best State for Student Debt Among the $1.12 Trillion Owed Nationwide

November 4th, 2014 at 12:59 pm

According to a recent study by WalletHub, the state of Texas ranks as number nine in the list for the “best” student loan debt. WalletHub analyzed all 50 states (including the District of Columbia) using 7 key metrics, including average student debt, unemployment rates, and students with past-due loan balances.

Though nine out of 51 may be good news for the Lone Star State, the rest of the country is not doing as well. As of June 2014, the Federal Reserve Bank of New York, total outstanding student loan debt stood at $1.12 trillion, an increase of $7 billion from 2013.

According to the WalletHub study, though the risk of joblessness declines with the more schooling you have, location also has a large effect on college debt levels. This means that if you live in a city or state where the economy is booming, you are more likely to pay off your student debt on time, without penalties.

While Texas continues on the up and up, other states in the bottom, including Massachusetts (30), Washington D.C. (41), and Rhode Island (51), continue to suffer.

In May 2014, Massachusetts Sen. Elizabeth Warren proposed a bill to allow students to refinance their loans at a lower interest rate called the “Bank on Students Emergency Loan Refinancing Act.” The Democratic senator and her party argued that the $1 trillion in student loan debt is harming the U.S. economic growth and that something must be done to alleviate it. Unfortunately, in September, Republicans opposing the bill struck it down. The Act would have allowed more than 25 million students to refinance their loans to today’s lower interest rates of less than four percent.

For now, it does not seem like student loan debt in any state will be alleviated anytime soon. With the political battle constantly stalling bills able to assist student loan debtors, the educated middle class will only continue to suffer.

If you or your college-aged son or daughter is suffering from crippling student loan debt in Texas, contact an experienced San Antonio bankruptcy lawyer. Attorney Chance M. McGhee can help you determine which bankruptcy option may be best for your individual situation. Call 203-342-3400 for a free consultation.

How Bankruptcy Can Be the Start of a More Secure Financial Life

October 27th, 2014 at 9:46 am

bankruptcy solutions in Texas, San Antonio bankruptcy attorneyLet us redefine the popular yet misguided perspective of bankruptcy. First, here are the facts: Bankruptcy  may have a negative impact on a credit score and will stay on record for 10 years. Lenders will consider someone who recently went through bankruptcy as a risk and will be less likely to loan  money. According to Bankrate, it is even possible to see insurance rates rise. Due to these conceptions, many view bankruptcy as a stressful and that it is a difficult way out of debt. But, this does not have to be true.

Bankruptcy is an opportunity—even a tool—that grants debt relief while teaching some valuable financial lessons. There are a variety of reasons why one might consider bankruptcy, and the best chapter to file depends on the circumstances surrounding the debt.

What You May Learn While Going Through Bankruptcy

Different forms, or chapters, of bankruptcy offer different solutions to getting out of debt. What they all have in common, however, is a direct lesson in financial security—both literally and figuratively.

First, applicants for bankruptcy must go through some basic monetary schooling before completing the process. This includes credit counseling, as well as debtor education, which offers lessons, advice and tips for maintaining finances.

Living After Bankruptcy

After going through the process of bankruptcy, the real work is only half complete. Filers may need to commit to a lifestyle that incorporates less spending and fewer luxuries. Learning to live off of income is one of the first steps in this journey. For those with limited income, the transition can be quite difficult.

Establishing credit is another concern for those who have recently declared bankruptcy. For the most part, a secure line of credit is the first way to start. By making responsible purchases and paying them off on time, it is possible to move on to a regular, unsecured credit card with relatively low amounts of interest.

Bankruptcy offers the opportunity for debtors to attain financial stability. If you feel that declaring bankruptcy is the solution for you, having a San Antonio, Texas bankruptcy lawyer with you every step of the way can be beneficial. For the past 20 years, the Law Offices of Chance M. McGhee have helped clients break down their financial hurdles. Contact us today at 210-342-3400 for a free 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.

Qualifying for Chapter 7 Bankruptcy

September 4th, 2014 at 10:35 am

Chapter 7 bankruptcyIn order to qualify for Chapter 7 bankruptcy, the U.S. Bankruptcy Court requires a person to pass a “means test.” This means test will determine if your Chapter 7 bankruptcy should be dismissed or if you should actually be filing for Chapter 13 bankruptcy.

In order to pass the means test, the courts look at your income for the prior six months before you filed for bankruptcy and then doubles that figure. That amount must be below the median level for the state you live in. In Texas, the annual median income is as follows:

  • Single person household: $41,960
  • Two person household: $57,121
  • Three person household: $60,440
  • Four person household: $69,570
  • Add $8,100 per person over four

If your income falls below the median, then you should have no problems qualifying for Chapter 7 bankruptcy. If it goes above, then a qualified bankruptcy attorney can go over what other options you may have.

If you have an occupation that you earn more money or where your monthly income fluctuates, then the time of year you file could make all the difference in whether or not you will meet the means test and qualify.

Teaching is a perfect example of this type of occupation. Teachers typically work ten months per year, from September until June. During the summer vacation months of July and August, they do not draw paychecks. September could be the best time for a teacher to file bankruptcy, since the court does not count checks for the month you file in. This means that the teacher’s checks for the months of March through August will be used to calculate the means test. Since July and August are “checkless” months, this means only four months of income will be used for the calculation and could make a difference in qualifying for Chapter 7.

If you are struggling with debt problems in the San Antonio, Texas area due to job loss, medical issues, or any other reason, seek help from a experienced San Antonio bankruptcy attorney today. Contact the Law Offices of Chance M. McGhee for all of your bankruptcy needs, and to start the process of financial relief and recovery.

Issues in State and Federal Minimum Wage Laws

August 22nd, 2014 at 4:41 pm

federal minimum wageThe minimum wage was a concept put in place to protect workers from the past tyranny of their employers. Larger companies can hold a lot of sway over the heads of individuals depending on a paycheck to put food on their tables and provide themselves and their families with the basic living necessities. This system also prevents businesses and business owners from auctioning off jobs, until men and women are forced to work for cents on the hour.

The problem with Texas minimum wage is exactly what it describes–the smallest amount an employer can legally pay his or her employees. Over the last few years in particular, many people are beginning to ask themselves and their legislatures whether the minimum wage laws are progressive enough to have evolved with society.

The current minimum wage in the State of Texas is only $7.25 per hour, the federally mandated minimum wage. While many other states have their own minimum wage laws that increase this rate, Texas is not one of them. The following statistics about the cost of living in Texas can be startling compared with its already low minimum wage:

  • The average cost of a one bedroom apartment in Houston is $1,144 per month;
  • A gallon of gas is priced at a little over $3.60 each;
  • One ride on public transit costs $1.25;
  • A regular gallon of milk is priced at $3.28;

Basing this on an average 40 hour work week, if you were getting paid minimum wage, then you would be making $1,160 before taxes are taken out, meaning that this income is not even enough to pay the rent of a one bedroom apartment in Houston. To make matters even worse, there are exemptions on certain employees that do not even have to be paid the $7.25 an hour:

  • Certain agricultural workers are not covered under the law;
  • Populations of mentally handicapped individuals can be exempt;
  • Employers may factor in the cost of meals and/or lodging into the compensation they offer.

The economy in Texas, though improving slightly, has still left many in dire financial constraints. The minimum wage law is lacking in some aspects, leaving bankruptcy the only options for many residents of the state. If this is you, contact a New Braunfels bankruptcy attorney today for experienced legal assistance with all of your bankruptcy needs.

Bankruptcy and Mental Health: Battling Negative Emotions

August 6th, 2014 at 5:46 pm

bankruptcy, bankruptcy and mental health, bankruptcy stressors, San Antonio bankruptcy attorney, your mental health, low self-esteem, bankruptcy and depressionFiling for bankruptcy can be one of the most emotionally and psychologically straining times in a person’s life. While dealing with attorneys, the court, and creditors, he or she is simultaneously trying to rebuild his or her economic stability and livelihood. Yet the stress and other related issues naturally increase.

Bankruptcy can be devastating to one’s psychological well-being and even perpetuate the problem in other ways. The unpleasantries and feelings associated with the bankruptcy process are far reaching and can have many negative effects. In fact, the economic constraints associated with bankruptcy can cause loss of emotional control, anxiety and depression, and relationship problems. Often, this is a direct result to the sense of shame that many carry with their bankruptcy proceedings. Consider the following psychological consequences bankruptcy and financial hardship can cause.

Problems with self-esteem: Many people associate their monetary worth with who they are as a person, and subsequently feel as if they failed themselves or loved ones. Low self-esteem opens the door for depression, anxiety, and isolation due to a sense of guilt and shame.
Perpetuation of the problem: The anxiety and depression brought on by bankruptcy often causes impulsive behaviors. These include behaviors like gambling and overspending. Some may purchase beyond their means when under duress to compensate for their low mood. Unfortunately, this can easily complicate bankruptcy cases and can be detrimental moving forward.
Physical manifestations of psychological problems: Stress and anxiety release an excess amount of hormones that can cause physical symptoms. Some common physical manifestations are muscle spasms and tension, chronic headaches, back pain, and teeth grinding. Stress can also lower your immune system, thus making it more difficult to fight off illness.

The negative results of bankruptcy certainly extend far beyond financial constraints. Bankruptcy can be devastating to emotional stability and result in mood problems and physical ailments in the long and short term. However, consulting a professional and caring San Antonio bankruptcy attorney can help prevent some of the stressors associated with bankruptcy and mental health.

Call today for a FREE Consultation

210-342-3400

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