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Archive for the ‘Chapter 13 bankruptcy’ Category

Which Type of Bankruptcy Is Best for My Financial Situation?

August 26th, 2020 at 2:29 pm

Texas chapter 7 lawyer, Texas chapter 13 attorney Bankruptcy is often seen as a last-ditch effort to overcome the financial burden that you may be experiencing. While this is typically the case, the level of debt that one may be in can vary greatly depending on their circumstances. Some may have no income and are struggling to pay basic bills, while others may have a steady income but have found themselves buried by exponential medical or credit card expenses. There are two common ways that Texans can file for bankruptcy: Chapter 7 and Chapter 13 bankruptcy. By looking at your unique circumstances, you can determine what type of bankruptcy filing is appropriate.

Chapter 7

When imagining what filing for bankruptcy looks like, people often imagine something along the lines of Chapter 7 bankruptcy. Also known as “liquidation bankruptcy”, this form of bankruptcy has the trustee sell the debtor’s property and use the money collected to pay off their debts, as close to the total amount as possible – all remaining debts will be forgotten. This form of bankruptcy may seem preferable to some, since the process only takes about six months and some debts may be forgotten, but it is not available to all debtors. If the debtor’s income falls below the state’s median household income, which in Texas is $59,570, he or she is eligible to file for Chapter 7 bankruptcy. The debtor will not lose all of his or her assets during the bankruptcy process, since some personal property can be claimed exempt from the process.

Chapter 13

For those who have a steady, dependable income, Chapter 7 bankruptcy is not an option. These debtors will file for Chapter 13 bankruptcy, which involves formulating a payment plan over a three- to five-year period. In other words, none of their debts are forgotten and they are expected to pay it off in time. However, Chapter 13 filers will not be required to give up any of their property or assets to pay off their debts as long as they follow the terms of their payment plan. A portion of their paycheck will go towards these unpaid debts once their basic needs are met.

So, Is Bankruptcy Really Best for Me?

You may still be wondering if filing for bankruptcy is your best course of action. You should consult a bankruptcy attorney for advice on whether your financial difficulties warrant filing for bankruptcy. Even before speaking with an attorney, you can take your own financial inventory to really see where you are at. Take a look at the following financial areas to gauge your need to file for bankruptcy:

  1. Debts. Take account of all of the debts looming over you. This includes any unpaid credit card bills, overdue loans, or other outstanding balances. List these debts in one area to give yourself a general estimate of your financial burdens.
  2. Monthly Costs. Next, list out your monthly expenses below your total debts. This should include any monthly bills, such as rent, utilities, food, and more. You can estimate some of your monthly costs but should include anything that you purchase on a regular basis.
  3. Income. Look at your income from the past six months, excluding social security. If you have a spouse, include their income in your calculations. By looking at your current debts and monthly expenses, you may be able to re-budget your income to begin paying off these debts.
  4. Assets or Property. Do you have an extra car that you rarely use? Or perhaps you have a vacation home that you are willing to part with. Before filing for bankruptcy, consider your other options to obtain the money you need to pay off your debts. If you do not have any additional assets or any that you are willing to part with, you may need to seriously consider filing for bankruptcy.

Contact a New Braunfels Bankruptcy Lawyer

Making the executive decision to file for bankruptcy can be one of the most difficult, and humbling, decisions you have to make. The stigma that surrounds bankruptcy often leaves people putting off the inevitable and continuing to build up debt in the meantime. If you are struggling financially, turn to the Law Offices of Chance M. McGhee for advice. Our compassionate legal team provides free consultations to allow potential clients to discuss their case before making a decision. Rather than allowing things to stack up and become even more burdensome, contact our San Antonio bankruptcy attorney for help at 210-342-3400.



Which Type of Bankruptcy Is Right for Me?

August 19th, 2019 at 2:15 pm

bankruptcy-typeIn the United States, there are many different types of bankruptcies, some being for businesses, government sectors or individuals. If you are an individual filing for bankruptcy, the two most common types of bankruptcies that are filed are either Chapter 7, which is a liquidation bankruptcy, or Chapter 13, which is a reorganization bankruptcy. Each type of bankruptcy has its advantages and disadvantages, along with different sets of criteria to qualify for each type of bankruptcy. If you are unable to pay your bills each month or you are struggling to make ends meet, bankruptcy may be in your best interest. Choosing the right type of bankruptcy for your situation can be the key to your financial success.

Chapter 7 Basics

A Chapter 7 bankruptcy is also known as liquidation bankruptcy. This is because all of your “unnecessary” assets will be liquidated to help pay off some of your debts before your debts are forgiven. Most unsecured debts, such as credit card debt, will be discharged in a Chapter 7 bankruptcy, meaning you will no longer be responsible for paying them. It takes roughly three to four months to complete a Chapter 7 bankruptcy, which is a relatively short time frame.

To qualify for a Chapter 7 bankruptcy, you must pass a means test, which is a test that is used to determine whether or not you are actually able to repay your debts. If you pass the means test or your income is less than the median income level for Texas, you will most likely qualify for a Chapter 7 bankruptcy. If you earn too much, you may be denied.

Chapter 13 Basics

A Chapter 13 bankruptcy is known as reorganization bankruptcy because your debts will be reconfigured into affordable monthly payments. This type of bankruptcy allows you to repay some or all of your debts over the course of three or five years, depending on your income. At the end of the repayment period, the rest of your unsecured debts will be discharged. Chapter 13 bankruptcies allow the person filing to keep all of their property, even property that is deemed to be a “luxury” item in Chapter 7 bankruptcies.

Those who earn too much income to qualify for a Chapter 7 bankruptcy may qualify for a Chapter 13 bankruptcy. Most people who have regular monthly income can qualify for a Chapter 13 bankruptcy because there are no income requirements. However, a person must have less than $419,275 in unsecured debt and less than $1,257,850 in secured debt.

Unsure of Which Type of Bankruptcy You Should Go With? Contact a New Braunfels, TX Bankruptcy Lawyer

Filing for any type of bankruptcy has consequences that you must deal with after everything is said and done. Though these consequences sometimes differ depending on the type of bankruptcy you choose, they can still affect your life. If you are wondering which type of bankruptcy would be best for your financial situation, or if you should file for bankruptcy at all, a skilled San Antonio, TX bankruptcy attorney can be an invaluable asset. Contact the Law Offices of Chance M. McGhee today to see how we can help you find solutions for your debt. Call our office at 210-342-3400 to schedule a free consultation.



Types of Debt in Chapter 13 Bankruptcies

February 8th, 2019 at 11:01 pm

TX bankruptcy lawyerThere is more than one type of bankruptcy, although Chapter 7 and Chapter 13 bankruptcies are the most common. In a Chapter 13 bankruptcy, your attorney and a team of other professionals are able to help you develop a repayment plan to pay back your debts. The repayment plan lasts for three to five years, depending on a variety of circumstances. Chapter 13 bankruptcies can be beneficial to individuals because it allows you to keep certain assets, such as your vehicle or your home. In a Chapter 13 bankruptcy, certain debts must be repaid before other debts.

Priority Debts

Priority debts are exactly what they sound like — priority over other debts. These debts must be included in any repayment plan you enter and the plan must make sure that your priority debts are paid off first and in full. Typically priority debts include:

  • Past-due child support;
  • Past-due spousal support;
  • Unpaid taxes; or
  • Unpaid wages that you owe employees within the past six months.

Secured Debts

Debts that can be secured by certain property are called secured debts. These types of debts are called secured debts because they can be attached to specific property. If you fail to repay the debts as agreed, the creditor can take back the property. The most common examples of secured debts include:

  • Home loans or mortgages; or
  • Car loans.

Unsecured Debts

Unsecured debts are basically all other debts that you may have. Unsecured debt has no property that can be attached to it, so there is nothing that the creditor can repossess if you do not pay. Common examples of unsecured debt include:

  • Medical bills;
  • Credit card debt;
  • Personal loans;
  • Utility bills; and
  • Business loans.

A Texas Chapter 13 Bankruptcy Attorney Can Help

United States bankruptcy law is extremely complex and is best handled by a professional. At the Law Offices of Chance M. McGhee, we have dealt with over 20 years worth of bankruptcy cases and we know the ins and outs of the bankruptcy process. Our skilled New Braunfels Chapter 13 bankruptcy lawyer can help you sort out your finances and come up with a repayment plan that works for you. To get started reviewing your case, call our office at 210-342-3400 to schedule a free consultation.




Which Bankruptcy Option Eliminates All Debt?

September 30th, 2018 at 5:39 pm

debtOne enticing benefit to filing for bankruptcy is the ability to discharge debts, enabling a fresh financial start. The United States bankruptcy code was created to allow honest debtors to free themselves from insurmountable debt; however there are various limitations. Unfortunately, these limitations restrict which debts become eliminated, reduced, or remain the same. Therefore, regardless of whether you file for Chapter 7 or Chapter 13 bankruptcy, some outstanding debts are untouchable.

Which Debts Are Eliminated?

Which debts discharge relies heavily on the type of bankruptcy filed by the consumer. Chapter 13 bankruptcy does not eliminate any debt initially, yet restructures the current sums into an affordable repayment plan. This repayment plan typically lasts three to five years, at the end of which any eligible debts are discharged. When you file for Chapter 7 bankruptcy, any unsecured loans become eliminated immediately. In some instances, unsecured debts make up all of the financial burdens. These debts include:

  • Credit card debt;
  • Personal loans;
  • Medical bills;
  • Payday loans;
  • Older tax debts;
  • Utility bills; and
  • Second mortgages.

Secured Debts Are Non-dischargeable

Chapter 7 bankruptcy does provide significant relief regarding secured, non-dischargeable debts, aside from freeing up a portion of the budget to make regular payments. Alternatively, Chapter 13 includes all financial liabilities in the repayment plan, including secured loans. Non-dischargeable debts include:

  • Taxes within the last three years;
  • Child support payments;
  • Alimony or spousal support obligations;
  • Student loans;
  • Traffic ticket fines;
  • Criminal restitution; and
  • Secured debt on a home or car you plan to keep.

Contact an Attorney

These guidelines are general statements intended to help you determine if bankruptcy may help your situation. Each consumer bankruptcy case depends on a variety of individual factors. Therefore, if you think bankruptcy is right for you, you should discuss your unique circumstances with a proven Boerne bankruptcy attorney. Contact the Law Offices of Chance M. McGhee for a free case review today by calling 210-342-3400. Our experienced team will assess the details of your case and provide honest feedback about the best course of action for your financial future.




Qualifying for Chapter 13

August 10th, 2015 at 7:00 am

Chapter 13 “adjustment of debts” gives you extraordinary advantages over creditors, especially over certain kinds of creditors.  


Here’s the sentence we’re exploring today:

You can file a Chapter 13 case if 1) you are “an individual,” 2) you have “regular income,” and 3) the amount of your debts does not exceed the legal limits.

Chapter 13

Filing a Chapter 13 case gives you extraordinary power over particular kinds of creditors. Here’s a sampling of what it can do:

  • You may qualify for a vehicle loan cramdown, enabling you to significantly lower your monthly vehicle loan payments, avoid having to catch up on any late payments, and greatly reduce how much you pay before the vehicle is yours free and clear.
  • You can catch up on back child and spousal support as your budget allows, without your ex-spouse or support enforcement being allowed to garnish wages and accounts or to suspend your driver’s or occupational licenses.
  • Older income tax debts may be paid pennies on the dollar and the rest written off forever.
  • Newer income tax debts can be paid off over time—over as long as 5 years—without any accruing interest and penalties throughout that time, and without the IRS/state being able to chase you on those debts.
  • You may be able to “strip” your second (or third) mortgage from your home’s title, so you never have to make those monthly payments again, greatly reducing the debt against your home, making keeping the home more sensible for the both for the short term and long.
  • You may write off non-support debts owed to an ex-spouse after paying little or nothing on those debts.

Chapter 13 is for “Individuals” Only

Only “individuals”—human beings—can file a Chapter 13 case, according to the U.S. Bankruptcy Code.

An individual and “such individual’s spouse” may file a joint Chapter 13 case.

Unlike Chapter 7 “liquation” or Chapter 11 “reorganization,” a business entity—a corporation, limited liability company (LLC), or business partnership—cannot file a Chapter 13 case in its own name.

If you are an owner or partial owner of a business that IS in one of these legal forms, you may file a personal Chapter 13 case to deal with the debts—personal and business—on which you are personally liable.  But the business itself cannot file under Chapter 13. It either doesn’t file any bankruptcy case (for example, if it has no assets at all, or if it can continue operating without bankruptcy help), files a Chapter 7 case to liquidate its assets, or files a Chapter 11 case to reorganize under court protection.

If you are an owner or partial owner of a business that IS NOT in one of these legal forms but instead is a “sole proprietorship,” you and your business can file bankruptcy in your name, including under Chapter 13. That’s because there’s no legal separation between your personal and business assets and debts.

You Must Have “Regular Income”

You can’t just be any individual but must be an “individual with regular income.” That phrase is defined in the Bankruptcy Code as one “whose income is sufficiently stable and regular to enable such individual to make payments under a plan under Chapter 13.”

That definition is not very helpful. How “stable and regular” does your income need to be before it is “sufficiently stable and regular”?  How does a bankruptcy judge make that determination at the beginning of a Chapter 13 case, especially if it’s an income source that has had some irregularities in the past (such as from self-employment)?

The ambiguousness of this definition gives bankruptcy judges lots of flexibility about how they apply this qualification. Most give you the benefit of the doubt at the beginning of the case, giving you the opportunity to make the monthly Chapter 13 plan payments to see if you can establish that your income is “stable and regular” enough. On the other hand, if your income has truly been very inconsistent, you and your attorney may have to fight hard to persuade the judge that your income is steady enough to qualify.

Debt Limits

If you file a Chapter 7 case there is no legal limit on how much debt you can have. But under Chapter 13 there are maximums, separate ones for total secured and total unsecured debts.

Chapter 13 debt limits were imposed back in the late 1970s when the modern Chapter 13 procedure was created.  Congress wanted to restrict this relatively streamlined procedure to relatively simple situations. For people with very large debts, the more elaborate Chapter 11 “reorganization” was considered more appropriate.

Originally the debt limits were $350,000 of secured debts and $100,000 of unsecured debts. In the mid-1990s these limits were raised to $750,000 and $250,000 respectively, with automatic inflation adjustments to be made every 3 years thereafter. The most recent of these adjustments applied to cases filed starting April 1, 2013 and through March 31, 2016, with a secured debt limit of $1,149,525 and unsecured debt limit of $383,175. These limits apply whether the Chapter 13 case is filed by an individual or by an individual and “such individual’s spouse”—they are NOT doubled for a joint case.

Reaching EITHER of the two limits disqualifies you from Chapter 13.

These limits may sound high, and indeed are not a problem for most people who want to file a Chapter 13 case. But be careful because certain kinds of debts can skyrocket and exceed these maximums. For example, a vehicle accident involving serious personal injuries, especially if more than one person was injured, can result in hundreds of thousand dollars of debt shockingly fast. Also, individual liability on business debts can accrue quickly.

Debt Dilemmas: Common Concerns about Chapter 13 Bankruptcy Process

July 10th, 2015 at 7:10 pm

Texas chapter 13 lawyer, Texas chapter 7 attorney, Texas bankruptcy lawyer, There are many options available to Americans who want to resolve their debts, but for those who wish to avoid a mass liquidation of assets, chapter 13 bankruptcy may be the answer. If you are struggling with insurmountable debt, you likely have many questions and concerns about the chapter 13 bankruptcy process.

An experienced bankruptcy attorney can evaluate your situation, address your concerns, and provide recommendations for debt relief. In the meantime, here are three common questions about chapter 13 bankruptcy:

Will I Lose My Property?

Many first-time bankruptcy filers confuse chapter 7 and chapter 13 bankruptcies. Unlike chapter 13, chapter 7 bankruptcy involves liquidating assets to pay creditors. However, chapter 13 filers can keep their assets and instead pay debts through a structured repayment plan, according to

What If I Cannot Keep up with My Payments?

Chapter 13 works by restructuring your debt into a more manageable payment plan that takes into account your total debt owed and your ability to pay. In some cases, it is possible to modify a repayment plan; however, debtors who cannot keep up with payments may eventually have to transfer their case to chapter 7 bankruptcy.

How Does Chapter 13 Bankruptcy Affect Tax Debts?

Bankruptcy laws treat credit card bills, mortgages, and similar debts differently than federal and state tax debts. However, chapter 13 bankruptcy places all of these debts – including tax debt – into the applicant’s payment plan.

If you are struggling with debt and want to know if chapter 13 bankruptcy is right for you, contact the Law Offices of Chance M. McGhee. With more than two decades of experience as a skilled San Antonio bankruptcy lawyer, Mr. McGhee has the resources to guide you through the bankruptcy process. Call our office today for a free consultation at 210-342-3400.

Benefits of Hiring a Bankruptcy Attorney

June 26th, 2015 at 7:03 pm

Texas chapter 7 lawyer, Texas chapter 13 attorney, Texas bankruptcy lawyer, For many Americans, bankruptcy offers a path to a debt-free life and freedom from the harassment of debt-collection agencies. However, the process of filing for bankruptcy is more intricate than most people assume.

Even if you know that you qualify for bankruptcy, the guidance of an experienced bankruptcy attorney may prove invaluable. Here are four reasons why:

1. An attorney can help you determine if filing for bankruptcy is a smart decision.

As highlights, a bankruptcy lawyer can assess your situation and help you determine if filing is a smart decision. There may be other ways to manage your debt, such as negotiating with creditors to reduce the amount owed or to establish a reasonable payment plan.

2. An attorney can explain bankruptcy laws.

A bankruptcy attorney can evaluate your case and explain the relevant laws. Different regulations apply to each chapter, and these laws my affect your eligibility.

3. An attorney can help you stop the actions of debt-collection agencies.

Dealing with insurmountable debt is hard enough without annoying calls from collection agencies. Your attorney may be able to stop those calls.

4. An attorney can help you avoid mistakes.

First-time filers often make mistakes that delay the bankruptcy process. There may be errors on the paperwork, or the person may break certain laws without knowing – such as excessively using credit before filing. An attorney can make sure you do not compromise your financial or personal interests.

With the right legal support, the process of filing for bankruptcy will become much simpler and easier to manage. A lawyer can guide you through every step – from filing the initial paperwork to managing finances after paying your debts.

If you plan to file for bankruptcy in Texas, contact Chance M. McGhee. Mr. McGhee is a dedicated San Antonio bankruptcy lawyer with more than 20 years of experience. He can evaluate your circumstances to determine if bankruptcy is the best approach to managing your debt. To schedule a consultation, call 210-342-3400.


Factors Which May Impact Chapter 13 Bankruptcy Eligibility

May 22nd, 2015 at 12:16 pm

Texas bankruptcy attorney, Texas chapter 13 lawyer, bankruptcy qualifications, Filing for chapter 13 bankruptcy is a smart option for thousands of Americans who struggle to pay their debts. Choosing to file bankruptcy is a major decision, and you should only do so after evaluating alternative options. You should also be aware of the bankruptcy qualifications that apply when attempting to file for chapter 13:

Personal Income

According to, personal income is the first criteria when filing for chapter 13 bankruptcy. Proof of a stable income is essential.

Remember that chapter 13 differs from other forms of bankruptcy in that it is not an outright dismissal or liquidation of debts. Instead, this chapter offers the option to restructure and pay off debts over time. This is only possible when the filer has a stable income. The length of the payment plan depends on how the filer’s income compares to the state median.

Total Debt

There is a limit to how much debt you can have when filing for chapter 13 bankruptcy. The current maximum for unsecured debt is $383,175, and the filer may have no more than $1,149,525 in secured debt. These amounts can shift based on the consumer price index.

Previous Dismissal

If your request for chapter 13 bankruptcy has been dismissed previously, you will not only be ineligible to apply for chapter 13, but you will also be unable to file for other chapters for a period of 180 days. Grounds for dismissal include failure to appear at hearings or violating court orders.

Attorney Chance M. McGhee is a dedicated San Antonio bankruptcy lawyer with more than 20 years of experience. He can help you understand your debt relief options and decide if filing for chapter 13 bankruptcy is a smart decision in your particular situation. Contact the Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation.

Bankruptcy Qualifications: Can You File for Bankruptcy Twice?

May 8th, 2015 at 8:17 pm

Texas chapter 7 lawyer, Texas chapter 13 attorney, Texas bankruptcy lawyer,Provided that you qualify for bankruptcy, it is likely that you will only apply once in your life. If everything pans out well, the process should set you on a more financially healthy course. However, whether due to a serious injury, loss of income, or another financial hardship, some people may find themselves considering bankruptcy a second time.

Is There a Limit to the Number of Times You Can File for Bankruptcy?

For the most part, you may file for bankruptcy as many times as you wish — although this does not imply that you should. Applying for bankruptcy too soon after the first may void your ability to discharge your debts, according to the Federal Trade Commission. This is critical because, in many cases, the purpose of bankruptcy is to discharge debt to make your finances more manageable.

The amount of time you should wait before filing a second time largely depends on whether you are filing for chapter 7 or chapter 13. After applying for chapter 7 bankruptcy, you must wait eight years until applying for the same chapter again. This differs from chapter 13, for which the wait period is only two years.

The time period between your first bankruptcy and hypothetical second begins on the day you filed the first bankruptcy. You should only consider a second bankruptcy after researching other options and consulting a bankruptcy attorney.

Filing under a Different Chapter the Second Time

Regardless of your first bankruptcy, you are not obligated to file under the same chapter during subsequent filings. However, changing the type of bankruptcy you file may affect the wait period. If you file for chapter 7 first, you must wait four years to file for chapter 13. For the converse, the waiting period is six years, provided that you have not paid off all unsecured debt. It is also possible to apply sooner if you have made regular payments for more than half of the debt owed, and you can show that a chapter 7 discharge is necessary to gain control of your finances.

To speak with a San Antonio bankruptcy attorney about filing for bankruptcy, either the first time or the second, contact the Law Offices of Chance M. McGhee for a free consultation at 210-342-3400.

The Importance of Following Bankruptcy Laws

April 3rd, 2015 at 8:13 pm

Texas bankruptcy attorney, Texas chapter 7 lawyer, Texas chapter 13 attorney, bankruptcy fraud, Filing for bankruptcy should not feel like an admission of guilt or defeat.  Chapter 7 and chapter 13 bankruptcies can help people stabilize their finances and work toward a debt-free life.

Bankruptcy laws are complex, which is why the guidance of an experienced bankruptcy attorney may prove invaluable. A lawyer who has handled cases similar to yours can provide advice and potentially expedite the process. You also may be more likely to avoid mistakes that could compromise your interests.

Although bankruptcy is a smart option for many, not understanding the legalities can make the process more difficult. One recent story demonstrates how not following bankruptcy laws can lead to trouble.

Judge Says Houston-Based Realty Company Circumvented Bankruptcy Laws

According to the Houston Business Journal, American Spectrum Realty, a self-storage space and assisted living center company, allegedly filed separate bankruptcy petitions in two different states. The overseeing judge ruled this action as an intentional means of circumventing specific aspects of bankruptcy law.

Following Bankruptcy Laws the Right Way

Different forms of bankruptcy come with specific regulations and requirements. Two of the most popular forms, chapter 7 and chapter 13, differ in how they resolve debt. The former is a more straightforward liquidation and dismissal of debt while the latter creates a repayment plan to help the debtor manage his or her finances.

No matter which form of bankruptcy you file, you must follow bankruptcy laws. An attorney can help you avoid critical mistakes while also helping you compare the options.

Consult a Bankruptcy Lawyer in San Antonio, Texas

If you are struggling with debt as either an individual or a business, and would like to speak with an experienced San Antonio bankruptcy lawyer, contact the Law Offices of Chance M. McGhee. Call us today at 210-342-3400 to schedule a free initial consultation.

Call today for a FREE Consultation


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