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Understanding Wage Garnishment Laws in Texas

January 28th, 2015 at 5:43 pm

wage garnishment in San Antonio, Texas bankruptcy lawyerMost Americans have some form of debt, and many struggle to make payments. Some are fortunate enough to get by with responsible budgeting, consolidation, and other financial strategies. However, unexpected circumstances, such as a suffering an injury or losing a job, can cause a debtor to fall behind. In some cases, creditors will garnish a debtor’s income to pay debt.

Although wage garnishment can severely limit a person’s financial freedoms, certain requirements must be met in order for wage garnishments to be legal. This article will briefly discuss how wage garnishment laws work in Texas.

Texas Laws Regarding Garnished Wages

For citizens of Texas, creditors cannot garnish wages to pay consumer debt, according to NPR. However, debts involving taxes, student loans, alimony, and child support may lead to wage garnishment.

Also, whether or not the debtor was born in Texas may affect the creditor’s ability to garnish wages. There are other complexities to these laws, which is why the guidance of a bankruptcy lawyer may prove invaluable.

What to Do When Wage Garnishment Begins

When wage garnishment begins, it is important that the debtor remains in contact with all relevant parties. These include the creditor, collections agency, and any attorneys involved. Do not avoid phone calls from these parties.

Although it may seem embarrassing or uncomfortable for an employer to learn about your debt, employees cannot lose their jobs due to wage garnishment—provided this is the first time it has happened.

Filing for bankruptcy may be a smart option if you face wage garnishment. A bankruptcy attorney can assess the facts of your case to determine if this is the right decision.

If you wish to learn how bankruptcy might help you financial situation, contact an experienced San Antonio bankruptcy lawyer. The Law Offices of Chance M. McGhee may be able to help. For more than 20 years, Mr. McGhee has helped clients return to financial stability, and he may be able to do the same for you. To schedule a free consultation, call us at 210-342-3400.

 

Is Taking Out a Loan a Smart Way to Get Out of Debt?

January 6th, 2015 at 10:43 pm

getting a loan, San Antonio bankruptcy attorneyNo one wants to be in serious debt, however, carrying some form of debt is unavoidable. To start, everyone needs to build credit, and one of the most effective ways to accomplish this is by taking on “good” amounts of debt and paying it off in a timely fashion.

While credit can be a luxury for some, for others—especially those in a low income bracket—credit becomes a way to help with bills, groceries, and other daily expenses. Unfortunately, even a small amount of debt can be a precursor to bankruptcy if a person falls on hard financial times.

The truth is that filing bankruptcy is a smart decision in many cases. However, there may be other ways to solve debt problems. One method that many people consider is consolidating debt by taking out a loan. This often is an effective strategy, but it is important to understand a few basic aspects about debt and loans.

Understanding What Taking Out a Loan Means

When the money from a loan comes in, paying off credit cards and other debt can feel like a giant weight has been lifted. With a zero balance and no creditor phone calls, one might even feel like they are out of the woods. It is important to understand, however, that the debt is still there and requires payment.

Start Putting Money Away, Know How Much You Owe, and Do Not Add to the Debt

It is important never to lose sight of how much debt you actually owe. An effective strategy is to write down the total amount of the debt while slowly saving enough money to meet each payment—or to pay it off entirely.

There are a lot of benefits to taking out a loan. According to BB&T, loans often have lower interest rates, and placing all of the debt into one area can really make a difference when it comes to focusing one’s own finances. By sticking to basic fiscal wisdom, a personal loan can be a tremendously beneficial means of taking control of debt.

If you need to speak with a Texas bankruptcy attorney, contact the Law Offices of Chance M. McGhee. Call us today for a free consultation at 210-342-3400.

Federal Rules Debt Collectors Must Follow

November 27th, 2014 at 1:00 pm

debt collectors in San Antonio, Texas bankruptcy lawyerWhen a person owes a defaulted amount on an account, such as a credit card or prior utility bill, the company who the original debt is owed to will often “charge off” that debt after a certain period of time has gone by. Someone who is struggling with overwhelming debt may have multiple accounts which have been declared charge offs by the original creditor.

There are certain guidelines a creditor must follow before they can charge off an account. If the account is an installment loan (such as an auto loan or mortgage), then the delinquency must be at least 120 days past due. If the account is a revolving credit account (such as a credit card), then the delinquency must be at least 180 days past due.

At this point, the creditor has three options for debt collection for the account. The company can continue to pursue collection themselves; they can hire a third-party collection agency to continue collection activity; or they can sell the debt to a debt buying company. Debt buying companies purchase debt portfolio from creditors and any funds then collected on the debt belong to the debt buyer.

Regardless of what option a creditor decides on, there are federal rules that have been established that a debt collector must follow. These rules were established under the Fair Debt Collection Practices Act (FDCPA) and include:

  • A debt collector must sent a written notice within five days of the first initial telephone contact which validates the amount of the debt owed;
  • Debt collection may only take place between the hours of 8:00 a.m. and 9:00 p.m.;
  • A debt collector may not contact a person at their workplace if they have been told either orally or in writing not to do so;
  • A debt collector must stop contacting a person if the person sends a certified letter to the debt collection telling them to stop all contact. The only exception to that contact would be the debt collector acknowledging the no-contact letter and/or contacting the person to let them know they will be filing a lawsuit or other activity;
  • If a person is represented by an attorney, then the debt collector must contact the attorney and not the person who owes the debt; or
  • Debt collectors may not harass, make threats, or make false statements in order to intimidate or scare a person into paying the debt.

If bankruptcy seems like a viable option for your financial situation, contact the Law Offices of Chance M. McGhee. San Antonio, Texas bankruptcy lawyer, Mr. McGhee has helped clients over the past 20 years regain control of their financial lives. Call the law firm at 210-342-3400.

Bankruptcy Filers Can Now Use Rental History to Rebuild Credit

November 18th, 2014 at 10:43 pm

rental history to rebuild credit, San Antonio bankruptcy lawyerWhen a person files for bankruptcy, it takes time for their credit history to “heal” from the painful ordeal of overwhelming debt that caused the bankruptcy filing. As long as person is careful not to overextend themselves, they are usually able to qualify for credit cards, auto loans and even mortgages within several years of filing.

Having taken control of their debt and filing for bankruptcy, a person can also take control of their credit history. Applying for a secured credit card and making the payments on time every month, as well as any other accounts that were not charged off in the bankruptcy, such as a mortgage or auto loan, will increase a person’s credit score enough that they may be able to qualify for unsecured credit within two years following the bankruptcy.

There is now a new way for people to help increase those credit scores and that is with their rental history. In the past, a person’s rental history was never included on credit history reports. If a person has a long history of making on-time rental payments, they never received the credit benefit for that good history like a person who pays their mortgage on-time.

But now, two of the major credit reporting companies, Experian and TransUnion, have begun accepting and including verified rental history information on credit reports. TransUnion has conducted several studies that show the increase in credit scores rental payment history can make. In one study, when just one month of rental payments were incorporated in a person’s credit history, the average score rose by 10 points in 20 percent of the consumers.

Renters will not be allowed to self-report their rental history. It needs to be done through the landlord, who can either do it through TransUnion’s Resident Credit program or through third-party companies who take a renter’s payment online and send the payment to the landlord, as well as report the payment to the credit bureaus.

If you are struggling with debt problems due to unforeseen circumstances, but are concerned with how bankruptcy may affect your future, consult with an experienced San Antonio bankruptcy attorney today.

Rules of 341 Meetings in Bankruptcy

September 10th, 2014 at 10:26 am

341 meetingAll Chapter 7 bankruptcy petitioners are required to attend a creditors meeting. This is typically the only “formal” meeting the petitioner will be required to attend. This meeting is also known as a 341 meeting, named after the section of the bankruptcy code that addresses it. A 341 meeting is most often held at the office of the trustee who is overseeing the bankruptcy.

Some of the documents that your bankruptcy attorney will have you prepare ahead of time to bring to the meeting include:

  • Paycheck stubs,
  • Federal and state tax returns for the past four years,
  • Any bank or other financial account statements, and
  • Property deeds and titles.

The petitioner is required to answer, under oath, questions that the trustee or any creditors may have.  One of the purposes of the meeting is to make sure the petitioner is not lying about or hiding any assets that could be used to pay off creditors. In most cases, the meeting itself does not last any longer than 15 minutes.

However, if a trustee is not happy with a petitioner’s answers, he or she can request the petitioner provide more documentation to support their answers. Often, this documentation can be mailed to the trustee. However, occasionally, the trustee will continue the meeting for another day. According to the 314 statute, if the trustee is requesting a continuance of the creditor’s meeting, then the trustee must immediately file a written notice of when the adjourned meeting will resume.

It is that rule that protected a Chapter 7 bankruptcy petitioner’s home when the trustee handling her case attempted to object to the homestead exception the woman had filed.

In her bankruptcy petition, the woman had filed a homestead exception for the home she owned. However, she and her husband had separated and the woman moved out of the home. At the creditor’s hearing, the trustee objected to the exemption and continued the meeting to a later, unspecified time.

The trustee then filed a written objection to the homestead exemption, but because he never filed a written continuance of the creditors meeting, the court allowed the homestead exemption in the bankruptcy.

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 an 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.

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.

The Truth behind Bankruptcy Filing

July 16th, 2014 at 1:23 pm

bankruptcy filing, credit scores, impending bankruptcy, medical debt, San Antonio bankruptcy attorney, Texas bankruptcy attorney, unemploymentAmericans file for bankruptcy each year as the result of owing more money to creditors than can actually be paid. While often times the term “bankruptcy” is stigmatized and correlated with poor spending habits and large credit card bills, the truth is it is a necessary practice for economic relief in dire times.

Most people who file for bankruptcy are not irresponsible, nor are they trying to use the process as a means of simply walking away from their debt. US News stated in an article, citing a study by The Bureau of Labor Statistics, that as of April 2012 more than 5.2 million people across the country had been unemployed for six months or more. In addition to unemployment as a factor, money lost due to divorce is also a large contributor to outstanding debt, as well as medical expenses.

There are several other common misconceptions about bankruptcy filing and those who file. Consider the following misunderstood and misinterpreted bankruptcy concepts everyone should know:

  • Bankruptcy filing ruins credit scores permanently: Although many believe they will never be able to get another loan or credit card after filing, this is not necessarily the case. You may have to start slowly, but making regular payments on loans will gradually increase your score.
  • Bankruptcy may not forgive all kinds of debt: This is a widely held belief that often is not true. Certain types of debt and payments are not absolved with bankruptcy. These include obligations such as alimony and child support, some kinds of student loans, and any type of criminal fines.
  • Use of credit cards with an impending bankruptcy: Be wary of using your credit cards right before you file, and never deliberately run up your bills under the assumption that it will be forgiven. This practice has been deemed as committing fraud in the past, and you run the risk of getting stuck with the bills after the process anyway.

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 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.

Exploring Texas Bankruptcy Options

July 2nd, 2014 at 8:25 pm

bankruptcy options, Chance M. McGhee, filing for bankruptcy, government statistics, Texas bankruptcy attorney, Texas bankruptcy cases, Chapter 7 bankruptcy, Chapter 13 bankruptcyThe American economy has seen better days since the financial collapse of 2008, having a significant impact on citizens from all walks of life. The concept of bankruptcy was once foreign to many, whereas in contemporary society it has become a serious reality. In fact, government statistics indicated over a million new bankruptcy cases were filed in 2013. Many residents of Texas in particular have seen hard economic times. It is a trend that dates back decades.

According to the U.S. Census Bureau, Texas has seen a much higher overall poverty rate compared to the rest of the country since at least 1980. Naturally, instances of bankruptcy have followed a similar trend. It is crucial to consult with a time-tested, reliable, and accommodating bankruptcy attorney to ensure your personal needs will be met on an individual basis.

Consider the following factors when filing for bankruptcy in Texas, keeping in mind the intricacies that must be addressed in depth with each concept:

  • Chapter 7 bankruptcy in Texas: The most common form of consumer bankruptcy, Chapter 7 offers the benefit of absolving much of your debt. On the other hand, the pitfall of Chapter 7 can be staggering. Any nonexempt assets are often liquidated to pay off as much as possible. This type of bankruptcy is also more likely to negatively affect your credit for a longer period of time.
  • Filing for Chapter 13: Generally the option for individuals with an income higher than the average, Chapter 13 offers a strict payment schedule in exchange for a better protection of assets such as your home and automobile. In addition, Chapter 13 subsidizes payments based only on disposable income, and helps to maintain your quality of life through and after the process.
  • Texas-specific bankruptcy options: Texas offers consumers options not available in other states. For instance, the state allows you to choose between Federal bankruptcy exemptions, or Texas’ own exemptions. State homestead exemptions allow you to retain the value of your home and property, and other regulations can also make this applicable to your vehicle, as well as things such as farming equipment and even livestock.

The avenue you choose to pursue when filing for bankruptcy in Texas will always be dependant on your individual situation, and making an incorrect decision can hurt you financially in both the long and short term. Nobody wants to end up in a situation where bankruptcy is the only option. However, making a proactive decision when choosing an attorney can put you back on track towards financial recovery.

At the Law Offices of Chance M. McGhee, our attorneys serve the greater San Antonio, Texas area and strive to work with our clients on an individual basis. We offer more than just twenty years of experience in Texas bankruptcy cases. You can expect personalized services catered directly to your needs using the opportunities the State of Texas has open to consumers. Contact the Law Offices of Chance M. McGhee today for any and all of your bankruptcy needs.

What Are Debt Collectors Allowed to Do?

June 27th, 2014 at 7:00 am

bankruptcy attorney, certified letter, contact debtors, debt collection, debt collectors, San Antonio bankruptcy lawyer, Texas bankruptcy attDebt collectors are only allowed to do so much when trying to acquire money owed from their debtors. And while there are times when debt collectors will go beyond what they are legally permitted to do, having an understanding of what is permitted can help to be determine whether or not a collector has gone too far.

Method of Contact

According to the Office of Consumer Credit Commissioner (OCCC), various creditors use independent debt collection agencies to acquire money owed. With that said, debt collectors are permitted to contact debtors via phone, mail, in-person, telegram, or fax. But, they should not contact debtors prior to 8:00 a.m. or after 9:00 p.m., unless given consent from the debtor. Also, debt collectors should not contact debtors at work, especially if the collector knows the employer does not approve of these contacts.

If you are in debt, and are working with a bankruptcy attorney, a debt collector must contact the attorney about your debt and not you. Debt collectors can contact third parties, but only to find out where you live, what your phone number is, and where you work. They are not permitted to contact third parties more than once.

Within five days of contact, you must be provided with notice regarding how much money you owe, to whom you owe the money, and what you must do if you believe you do not owe any money.

How to Stop Contact

You can stop debt collectors from contacting you by sending in a certified letter to the creditor. The letter must tell the creditor to stop contacting you. This will not get rid of the debt that you owe, but it will end the contact from the creditor and their collectors. Also, make sure you keep a copy of the letter for your records. The only form of contact the creditor can make following the letter is to let the debtor know the letter was received.

If you or a loved one has been contacted by a debt collector, contact a Texas bankruptcy attorney who can help you deal with the situation.

Rebuilding Life after Filing Bankruptcy

June 21st, 2014 at 3:00 pm

filing bankruptcy, filing for bankruptcy in Texas, filing for bankruptcy, Texas bankruptcy attorney, realistic budget, financial crisis, financial stressFiling bankruptcy as an individual or a married couple can be difficult to handle. In order to improve your situation following bankruptcy, you will need to perform a couple of tasks that can help restore your finances and your emotional state. Bankruptcy not only affects your wallet, it also affects your state of mind. However, there are steps you can take to rebuild your credit and your life.

End the Feeling of Guilt

When a person files for bankruptcy, he or she will undoubtedly struggle with their emotions. For instance, they might feel like a failure or that they are worthless. The more negative thoughts you have about the situation, the harder it will be to move forward with your life. Look to the future and think positive. When you begin to do this, everything will start to fall back into place.

Develop a Budget and Pay Bills by Due Date

Make sure you put together a realistic budget for your finances and that you pay your bills on time each month. Do not make a single late payment after filing bankruptcy. This will only make things more difficult. The best way to do this is to create automatic payments that are sent each month to your creditors. This will help you prevent missing any payments. Also, put together an emergency fund in the event that you need to pay for a large project, such as a new roof, so you do not have to go back into debt to fund it.

Analyze Your Situation

After filing for bankruptcy, you need to reflect on how you got into this situation. Try to find out what went wrong and what put you so deep into debt. You need to look at how you could have handled your finances differently and surround yourself with people who will help you overcome the situation.

Rebuilding your life after bankruptcy is possible. If you or a loved one is moving towards filing bankruptcy, contact a Texas bankruptcy attorney today to discuss your rights and learn the next steps.

Call today for a FREE Consultation

210-342-3400

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