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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.

The Cost of Care: Helping Elderly Parents

March 24th, 2014 at 12:59 pm

elderly parents, bankruptcy, finances, Texas lawyer, Texas bankruptcy attorneySome baby boomers have done advance planning to help those who will care for them in their old age by buying long term care insurance or setting aside specific funds. A growing number of aging individuals, however, are facing mental and physical challenges by relying on their family members. Research shows that 40 percent of U.S. adults are helping to care for a family member with a major health issue. The cost of caring for elderly parents can easily spin out of control, but you can get on top of your finances again through bankruptcy.

According to the National Alliance for Caregiving and the Metlife Market Institute, adults taking care of elderly parents face an increased risk of poor health themselves and a tendency to shortchange their own finances in the process. Poor health can lead to individual medical bills for you and using your savings to help a family member can lead to reliance on credit cards or loans to purchase basic necessities.

Sometimes one child has to give up their own career in order to focus on taking care of a parent. A female who chooses to give up her employment to become a caregiver will lose over $324,000 in pension or Social Security benefits and wages over the course of her lifetime. Many of the women taking on this new role hope that they will only need to step out of the workplace for a short period but then find that their family member requires more or longer-term care than they anticipated.

If you have been struggling to help a family member with the process of aging, there’s no doubt you have felt the impacts of doing so mentally, physically, and financially. If you are buried in debt and need a fresh start to get your life back on track, contact a Texas bankruptcy attorney today.

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.

Career Athletes and Bankruptcy

March 11th, 2014 at 12:08 pm

Olympics, Olympic Rings, San Antonio bankruptcy lawyer, career athletes, bankruptcy, financeThe 2014 Winter Olympics has just wrapped up and all eyes were on the incredible athletes from all around the world who have spent their life training for the big event. Although the Olympics is a celebration of all their hard work, it’s easy to underestimate the amount of time, energy, and financing that goes into preparing an athlete. Whether it’s the Olympics or professional sports, there’s a lot of hard work to get to the top. Some athletes struggle financially before or after their sports career, many even filing for bankruptcy.

The list of professional athletes who have gone bankrupt is longer than you might think. There are several reasons why they get there, but a primary one is poor financial planning or a series of hardships that threw them off course. Especially for younger athletes, not knowing how to properly manage their money can be a challenge too great, leading them to financial struggle mere years after their wealth accumulates.

According to a 2009 study, NFL retirees have a higher average income than men in similar age brackets of the general population. When that study broke down by age, however, younger athletes had higher numbers of sports stars with income close to or below the poverty level. A quick rise to fame can be difficult for younger athletes. Celebrating their big payoff after years of hard work and investment might mean financial difficulty and bankruptcy down the road as a result of poor financial planning.

Financial problems can affect individuals of all income levels and backgrounds. When you’re buried too deep and feeling like you’ll never be able to get on top of your situation, bankruptcy can be there to help. Bankruptcy can give you the fresh start you need. If you’d like to discuss your options, contact a San Antonio bankruptcy attorney today.

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.

Protecting Yourself From Refinancing Scams

December 30th, 2013 at 6:11 pm

Believe it or not, financial scammers often do not target the wealthiest individuals. Instead, those facing financial pressures and even considering bankruptcy are most often victimized. Those with money problems may painted into a corner, under immense stress, willing to do whatever it takes for a fresh start, and more susceptible to the dubious claims of scam artists.

refinancing scamStaying educated on the tricks of these con artists will help protect you from falling into their trap. How do scammers seek to steal from vulnerable Texas residents? A few of the most common scams include:

Home Affordable Refinance Program Scams (“HARP”): HARP is a program available to those who are not behind on their mortgage but have difficulty refinancing.  Scam artists are well aware that this program exists. They may try to contact you by phone or through the mail, claim that you qualify for HARP support, and ask for money to work through the process on your behalf. The only way to truly know if you qualify for HARP is to check HARP’s website, or contact your mortgage lender. Eligibility for HARP is based on a number of factors listed by HARP. If you are not sure you can check Freddie Mac’s website to gauge your potential eligibility for HARP.

Unfortunately, scammers often use HARP as a way to funnel money their way. The main thing to look out for are third parties asking for large fees to help you take advantage of the program.

 Rent to Own or Lease Back Scheme: This scam can result in loss of your home if you are not careful.  In this trick, con artists try to convince homeowners to sign over the title or deed to their home with no intention of ever giving the house back.  This is done with claims about getting money up-front while leasing the home or renting again in order to buy it back. These scam artists typically target people they know applied to refinance but were denied due to credit.

The best way to protect yourself from a scam like this is to never sign over the deed or title of your home unless you are legitimately selling the property with the aid of lenders, real estate agents, and proper legal professionals.

 Trusted Legal Help

If you are dealing with foreclosure, looming debt, and other financial pressures, remember that you do not have to handle it alone. An experienced Texas bankruptcy attorney can help. Our team in San Antonio works with residents throughout the state looking for a fresh financial start.  Feel free to contact us today to learn more.

State of Economy in Texas Remains Political Issue

November 21st, 2013 at 2:08 pm

With the gubernatorial race upon us, and local elections being decided throughout the country, the public will surely continue to be inundated with political ad campaigns and candidates’ appearances throughout the region. One of the most discussed issues involves Texas’ economy, and the correlated issues of unemployment rates and the public debt.

 According to My San Antonio, Attorney General Greg Abbott, who is running for the 2014 GOP gubernatorial nomination, stated during a recent campaign appearance that Texas’ debt ranks as the second highest among large states in the U.S., while San Antonio holds the highest debt of any city within the state. While this state of affairs is concerning, especially considering the recent actions of cities in financial crisis in other parts of the country, perhaps the public can find some reassurance in the fact that the elections will call attention to these issues and potentially produce proposed resolutions.

Unfortunately, considering the state of economic affairs in the state of Texas, it is not surprising that the citizens of Texas also experience financial strain. While the proposition of filing municipal bankruptcy is something that is generally considered as a last resort and is something to be avoided, individuals do not always have other feasible options. However, bankruptcy should not always be viewed as a negative process, as bankruptcy can offer not only debt relief for those who file, but a fresh start at a positive financial future.

Individuals generally file either a Chapter 7 or a Chapter 13 bankruptcy petition, depending on their intentions and the facts and circumstances surrounding their particular situation.  In a Chapter 7 bankruptcy, the petitioner obtains a discharge of his or her debt in exchange for surrendering certain items of property that will later be sold to satisfy their debt.  The bankruptcy code allows for certain exemptions that can be used to protect some items of the petitioner’s property from being surrendered.  In a Chapter 13 bankruptcy, the petitioner agrees to a repayment plan which provides for the petitioner’s debt to be repaid over a period of time, which can also include avoiding foreclosure by entering into a payment plan for the amount that is past due on the petitioner’s mortgage.  The petitioner’s specific repayment plan will depend on various factors, including income, total amount of debt, and types and the extent of other property they own.

The bankruptcy process can be overwhelming and complicated.  An experienced bankruptcy attorney in San Antonio can help guide you through the process and offer assurance in a stressful time.  Contact us today to discuss your options in filing for bankruptcy, and for advice in how to seek relief from financial difficulty.

 

Proposed Changes to Credit Score Reporting

October 23rd, 2013 at 3:21 pm

credit scores

A person’s credit score represents the riskiness of lending that person money.  Banks, credit card companies and car dealerships all use this information when approving or denying a credit application.  The score is weighted on a scale up to 850 based on payment history, length of credit history, accounts owed, types of credit used and whether new accounts have been opened.

Consumers who handle their credit accounts well and make payments on time have a higher score.  Those who miss payments, open too many accounts, or who don’t use credit or loans will have a lower credit score.  Filing for bankruptcy will also lower your credit score because you do not have to pay back your debts.

Now a new bill looks to expand on what is reported on credit scores.  The bill is called the “Credit Access and Inclusion Act” and was introduced during the summer of 2013.  The goal of this bill is to allow people who haven’t built up a credit to get credit for paying rent, utility and cable bills.  A recent survey of over 1,000 renters showed that around 70 percent would want their non-loan payments to be reflected in their credit scores.

Advocates of the bill say that it will help people who are trying to build a credit score get more affordable credit rates.  It also allows those without any credit history a chance to build their credit score.  Congressman Keith Ellison, a democrat representing Minnesota and co-author of the bill, stated that  “our current credit reporting system leaves more than 50 million people without a credit score…Including more data in credit reports will make it easier to get and improve a credit score.”

Those who detract from the bill say that people are better off when credit bureaus know less about them.  Making the credit score include other accounts makes it more likely that mistakes will be penalized.  But if this law passes, it will make it a lot easier to recover from filing for bankruptcy.  If you are considering filing for bankruptcy, then contact an experienced bankruptcy attorney in San Antonio today.

Insured Patients and Bankruptcy

October 8th, 2013 at 8:54 am

Many people assume most bankruptcy filings are due to out-of-control spending habits or poor money management.  However, according to a study published in The American Journal of Medicine, one of the biggest reasons people file for bankruptcy is unpaid medical bills.

More surprising is that many who file for bankruptcy due to medical bills have health insurance.  So even with the expansion of health care coverage through the Affordable Care Act, there will still be people struggling under the weight of medical bills.  Understanding the expenses related to health insurance can help you be financially prepared.

 

Monthly Premiums

Unless you have an employer covering your full monthly premium, most people will have to pay at least part of this to have health insurance.  The amount you’ll pay for your monthly premium has many variables, including the amounts set for your deductible, co-payments and co-insurance.

Deductibles

A deductible is the amount of money you must pay before the health insurance company will begin paying benefits. Deductibles range considerably depending on your plan. Many people try to save on their monthly health care premiums by selecting plans with high deductibles.  This can be an effective strategy but a high deductible can be a real challenge if you ever need to pay it.

Co-Payments and Co-Insurance

Once your deductible is met, you may have co-payments and co-insurance to pay.  A co-payment is a specific dollar amount you may be required to pay each time you visit the doctor.  A co-insurance is a percentage of the covered service you may be required to pay.

Lifetime Maximum

Sadly, a serious illness or injury can deplete your health insurance completely, as many health insurance plans have a lifetime maximum.  This means that once your insurer has paid out a specific dollar amount, you no longer have benefits from that company.

What Can I Do?

You should discuss your financial concerns with your doctor.  While you do not want to compromise the quality of your care, sometimes good options are available that are less expensive.  And do not be afraid to shop around.  Look for cheaper prescription drugs and cheaper diagnostic tests.  Finally, discuss payment plans with your doctor’s office.

If you find yourself with mounting medical bills you cannot pay, bankruptcy may be the best option for you.  Contact an experienced Texas bankruptcy attorney today.

Filing for Chapter 7 Bankruptcy

August 20th, 2013 at 10:23 am

LucyWhen someone files for personal bankruptcy, they typically file for either Chapter 13 bankruptcy or Chapter 7 bankruptcy. Under Chapter 13, a payment plan is set up for the debtor to pay back all of the debts, whereas, under Chapter 7, the debts are forgiven.

When a person files for Chapter 7 bankruptcy, these are some important steps to take early on:

The person in debt (debtor) must file a bankruptcy petition with the court, along with a list of assets and liabilities, a list of income and expenditures, a financial affair statement and a list of all current leases

  • Once the petition has been filed, debtors must also have tax documents available to hand over to the case trustee
  • If the majority of the debts are consumer debts, the debtor must also file a certificate of credit, a copy of a debt repayment plan from credit counseling if there is one, evidence of payment from employers and any interest in qualified education or tuition accounts

The court then charges the debtor the following fees, which must be paid immediately unless permission is granted otherwise by the court. If these fees are not paid, the case may be dismissed.

  • $245 case filing fee
  • $46 administrative fee
  • $15 trustee surcharge

Information needed to complete all of the necessary forms for the petition, includes:

  • A list of all creditors and the amount and nature of the money due to them
  • The debtor’s income, including the amount, source, and frequency
  • A list of all of the debtor’s properties
  • All monthly expenses such as food, shelter, utilities, transportation, medications, taxes and clothing

Determine possible exemptions in the case. States have specific assets that can be exempt from a case, or a debtor can choose what he or she wishes to be exempt from the case. It is important to determine this early on with an attorney.

Although there are many additional steps that must be taken to file for bankruptcy, these are a few that are very important to get the ball rolling. For additional help, contact a San Antonio bankruptcy attorney. Attorney Chance M. McGhee can help you file and get your debts taken care of today.

Call today for a FREE Consultation

210-342-3400

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