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Recent Blog Posts
What Rights Do You Have During a Foreclosure?
Going through a foreclosure can be an incredibly stressful and uncertain time. As a homeowner in Texas facing foreclosure, you still have certain rights that you should understand to best protect yourself during the process. Awareness of your rights can help you make informed decisions about the next steps. A Texas home foreclosure lawyer can point you in the right direction.
You Have the Right to Receive Notices
Lenders and mortgage servicers in Texas must provide homeowners with notices at specific points during the foreclosure timeline. These required notices include:
- Notice of Default - Sent when you have missed or are late on mortgage payments, giving you at least 20 days to become current on payments before further foreclosure proceedings.
- Notice of Acceleration - Sent if you do not become current on payments in the allotted timeframe, indicating that the mortgage holder may accelerate the mortgage and require immediate payment of the outstanding loan balance.
Deciding if Bankruptcy is the Right Choice
Filing for bankruptcy can provide much-needed relief if you are drowning in debt, but it also comes with long-term consequences. Determining if you qualify and weighing the pros and cons takes careful consideration.
You may feel desperate for an immediate solution, and filing for bankruptcy is the apparent quick fix. However, visualizing how this decision will impact your financial future over the next several years is vital. A Texas bankruptcy lawyer can help you determine if this is your best option.
Am I Eligible to File for Bankruptcy?
Eligibility hinges on several factors, starting with what chapter of bankruptcy makes the most sense. Chapter 7 liquidation eliminates most unsecured debt, while Chapter 13 restructures obligations into more manageable payments. The specific qualifications differ slightly, and knowing how this can affect you and your situation is essential.
Bankruptcy Vs. Alternatives
Facing unmanageable debts can leave you weighing options like bankruptcy and other alternatives. There are pros and cons to each approach. Before you decide, it is important to know how each option works so you can discuss which is most ideal for you with a Texas bankruptcy attorney.
Attempting Mortgage Loan Modification
If you are facing unmanageable debts from burdensome mortgage payments, consider pursuing a loan modification. This involves adjusting the loan terms, often through extended repayment terms or reduced interest rates, to lower ongoing monthly payments to more affordable levels. To qualify, you would need to document qualifying financial hardship
Potential benefits of a successful loan modification include lowering housing payments so you can stay in your current home while preventing any foreclosure damages to your credit
Should I Worry About Garnishment During Bankruptcy?
Seeing wages diminish right on your paycheck because of creditors garnishing income can be devastating. Falling behind on unsecured debts like credit cards, medical bills, or personal loans leaves you vulnerable to court judgments, allowing the seizure of hard-earned pay. Does filing bankruptcy stop wage garnishments in their tracks? Understanding how these protections work can help with decisions when working with a Texas bankruptcy lawyer on using bankruptcy to halt creditor collection efforts.
Automatic Stay Halts Garnishment
A primary benefit of submitting a bankruptcy petition is triggering the “automatic stay,” putting your debt collection world on hold. This legal injunction prohibits creditors and collectors from pursuing amounts owed using calls, lawsuits, attachments, and other techniques during active bankruptcy. Importantly, the stay also instantly cuts off existing wage garnishments, deducting amounts straight from paychecks upon the bankruptcy filing. The stay helps shield income needed for fresh starts.
What is a Liquidation Bankruptcy?
It is overwhelming to face a continuous debt pile despite your best efforts. Understanding what a liquidation bankruptcy involves can help you evaluate if this path - also called Chapter 7 bankruptcy - is the right fresh start, given your situation. A Texas bankruptcy lawyer can also help you determine if this is the best option for your circumstances.
What is Chapter 7 Bankruptcy?
Chapter 7 refers to the U.S. bankruptcy code section dealing with total liquidation cases. It allows you to legally discharge qualifying debt you cannot repay, providing much-needed relief and letting you move forward less burdened. With Chapter 7, a court-appointed trustee sells your non-exempt assets and distributes proceeds to creditors. Any remaining unpaid debt gets erased.
How Does Chapter 13 Bankruptcy Work in Texas?
When debts snowball beyond control, Chapter 13 bankruptcy restructures finances, offering three to five-year repayment plans capped at what you can afford. This path preserves assets while discharging remaining balances upon completion. A Texas bankruptcy lawyer can help you structure the most ideal process for your situation.
Filing the Petition
Everything begins by submitting your voluntary Chapter 13 bankruptcy petition to the bankruptcy court, documenting assets, debts, income, and expenses. This triggers an automatic stay halting foreclosure, repossessions, utility shut-offs, wage garnishment, and most collection harassment during proceedings. You keep property like cars and homes while the case wraps up.
Creating Your Repayment Plan
Next, you propose a repayment plan tailored to disposable income levels, assisted by your attorney. This lays out affordable monthly installments toward outstanding debts like credit cards, medical bills, personal loans, and past taxes. Payments are distributed to each creditor until the respective principal balances are reached, or the payments are completed—whichever happens first.
Can Bankruptcy Halt IRS Tax Levies?
Facing IRS threats to seize assets or garnish wages over unpaid taxes strikes fear for many taxpayers. While most creditors halt collection efforts after bankruptcy filings, some wonder whether the IRS plays by the same rules. A Texas bankruptcy lawyer can help you determine how automatic stay impacts IRS collection tactics.
Halting IRS Property Seizures
Upon filing either Chapter 7 or Chapter 13 bankruptcy, an automatic stay immediately pauses most collection activities against debtors. This includes preventing the IRS from confiscating and liquidating property to satisfy alleged tax debts. As your bankruptcy case proceeds, any prior notices or intentions to levy property convert to temporary restraints. The stay protection also requires the IRS to halt auction sales on properties already seized pre-bankruptcy. It must return anything improperly taken after your filing date. This gives you critical breathing room to negotiate IRS repayment terms through bankruptcy.
Should You Short Sell or Declare Bankruptcy?
When debts snowball beyond control, two common paths can provide a fresh financial start—selling property at fair market value using short sales or pursuing bankruptcy to legally liquidate assets and discharge balances. How do you determine which route best fits your unique financial scenario? Depending on your situation, a Texas lawyer can help you determine which path may be ideal for you.
When Home Values Drop But Mortgages Remain High
It is not uncommon for people to end up owing more on their home loans than their houses' worth. If you are underwater on your mortgage but making payments has become a significant struggle, a short sale could give you a way out without completely starting your finances over.
How Short Sales Help
A short sale allows you and the lender to mutually agree to sell the home at fair market value, even if it does not cover what you still owe. The lender takes a loss on the loan but gets something. You also get debt relief because, in most short sales, the lender agrees to forgive the remaining mortgage balance not paid off by the sale. This takes the crushing weight off your shoulders.
Filing for Bankruptcy as a Small Business Owner
As a small business owner, facing severe financial struggles can feel overwhelming and stressful. You may reach a breaking point where bankruptcy starts to seem like the only way out from crippling debt obligations and creditor threats. Filing can provide temporary relief and protection. However, bankruptcy is not a cure-all solution and carries significant downsides as well.
Carefully evaluating both the potential benefits and drawbacks and considering all alternative options first enables you to make the most informed choice for your business. A Texas lawyer can help you weigh the decision and help you.
The Financial Benefits of Filing for Bankruptcy
Filing for bankruptcy can provide financial relief for small business owners who are shouldering overwhelming company debt. It gives you time to reorganize your finances, catch up on debt, and create a plan to start paying it down going forward. Chapter 11 bankruptcy allows you to continue operating your business under the protection of an “automatic stay,” so you do not have to worry about creditors seizing assets or filing lawsuits while working to get back on track.
Can You Save Your Assets During Bankruptcy in Texas?
Filing for bankruptcy may seem scary because it requires you to surrender property to pay debts. However, Texas bankruptcy law allows the protection of certain assets through exemptions. Proper pre-bankruptcy planning will enable you to minimize liquidations and lawfully keep more of your wealth. A Texas lawyer can help you follow the proper steps for the best outcome for you.
Texas Offers Generous Exemptions
The key to saving assets in bankruptcy relies on claiming all available exemptions. Exemptions remove eligible property from liquidation during the proceedings so creditors cannot seize and sell the assets. Luckily, Texas legislation provides more generous exemptions compared to most other states.
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