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Archive for the ‘Chapter 7 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.

 

Sources:

https://www.consumeraffairs.com/finance/bankruptcy_02.html

https://www.census.gov/quickfacts/TX?

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.

 

Sources:

https://upsolve.org/learn/every-type-of-bankruptcy-explained/

https://www.credit.com/debt/filing-for-bankruptcy-difference-between-chapters-7-11-13/

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.

 

Sources:

http://www.uscourts.gov/services-forms/bankruptcy

http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics

 

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210-342-3400

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