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Debunking the Three Biggest Bankruptcy Fears

October 26th, 2018 at 8:25 pm

TX bankruptcy attorneyNearly 800,000 Americans file for bankruptcy each year, while millions more struggle with the decision filing. Often, those weighing the decision to file are doing so under the pressure of constant collection calls, the stress of impending foreclosure or repossession, and without all of the information necessary to make an informed decision. Let us help alleviate some of those fears:

Concern 1: My credit will be ruined.

While it is true that you will experience a decline in your credit score initially, also consider the impact late payments have on your credit score. While it may not be an immediate dramatic decline, the slow loss of credit from delinquency can be more harmful than bankruptcy.

As far as being able to apply for a credit card, a mortgage, or a car loan, all of these options will be available to you much sooner than you may anticipate. Many creditors are willing to offer you a credit card as soon as you complete your filing since they know you will be unable to file for bankruptcy again for an extended length of time. Furthermore, borrowers begin qualifying for new mortgages as soon as one year after the completion of a bankruptcy filing.

Concern 2: I will lose everything.

The thought of being homeless and without transportation often scares many families into coping with the onslaught of collection attempts. In reality, only 2% of debtors must turn over their personal property and real estate equity. According to the Texas homestead exemption, as long as you have lived in your home for 40 months or more, you will not lose your home, regardless of how much equity you have in it. If you live in a suburban area, you can keep up to ten acres of land, or if you are in a rural area, you can keep up to 200 acres per family or 100 acres for individual bankruptcy.

Concern 3: Everyone I know will find out I filed for bankruptcy.

We often hear of bankruptcy on the news, but rarely is it anyone we know intimately. While bankruptcy is a matter of public records, the only time it will potentially make headlines is if you have a high profile case. Many newspapers choose not to publish bankruptcy records now to save on publication costs.

A New Braunfels Bankruptcy Attorney Can Help

If you are one of the millions of Americans struggling to make ends meet, a Kerrville, TX bankruptcy attorney will help answer any questions you may have. Attorney Chance M. McGhee has over 20 years of experience with assisting clients to overcome the financial crisis. Call our office at 210-342-3400 to find out how we can help in a free initial consultation.

 

Source:

https://www.thebalance.com/the-three-biggest-bankruptcy-fears-316359

The Benefits of Bankruptcy

August 13th, 2018 at 3:40 pm

Texas bankruptcy attorney, Texas chapter 7 lawyerAlthough it is a decision that should not be taken lightly, bankruptcy is not the “end of the world” even though it can feel like it while you are busy deciding whether or not to file. With a constant and unyielding dark cloud looming over your head of unpaid debt – a detail the incessant calls from creditors will never let you forget – it may seem like there is no light at the end of the tunnel. What many consumers fail to realize is bankruptcy is that silver lining for which they have been searching, rather than an admission of defeat. For most, bankruptcy is often the beginning of a new chapter of life.

You Will Reestablish Credit

Although bankruptcy does appear on a credit report for seven to 10 years, dependant on the chapter filed, it does not mean that lenders will refuse to work with you or your spouse. Most people who file for bankruptcy can apply for a mortgage in as little as one year, so long as they work diligently to prove their picture of financial reliability.

In fact, mortgage lenders are sometimes willing to reduce the waiting period if the reason for the bankruptcy was a one-time occurrence, such as a death, job loss, or a divorce. Credit cards even begin sending you offers shortly after bankruptcy.  Most proposals for credit cards during financial hardship and after bankruptcy include high percentage rates and poor terms. Financial advisors suggest applying for a secured card to build your credit without the outrageous fees.

A No-Frills Lifestyle Is Key

Whether you file for Chapter 7 or Chapter 13, the last thing you want to do is find yourself in the same situation. The best course of action is to slim-down your expenses and adopt a no-frills lifestyle. Keeping your “eye on the prize” of being debt-free should be your primary motivating factor. A new car and a boat may sound like a great way to celebrate your new found financial freedom, but an inexpensive bottle of champagne will prove to be more budget friendly. A good rule of thumb to consider is: if you cannot pay for the item in cash, or it causes you to not pay for other necessary things in cash, you should pass on the offer.

Discuss Your Concerns with an Experienced Attorney

Most people wait to file for bankruptcy until it is nearly too late. Clients explain that their reasons for delaying the decision include they thought it would get better, were fearful of the social stigma, or thought they would lose their home. Most of these concerns typically fall to the wayside once consumers experience the benefits of living a debt-free lifestyle.

If you are struggling financially, a New Braunfels bankruptcy attorney can answer your questions. Sometimes, all you need is a neutral, non-judgemental third party to which you can verbalize your concerns. Law Offices of Chance M. McGhee understands the sensitivity of your situation, as well as the frustration of the constant collection calls. If you need honest and reliable answers, call us today at 210-342-3400 for a no-obligation consultation.

 

Source:

https://www.nytimes.com/2012/09/16/realestate/mortgages-life-after-bankruptcy.html

FAQs about Chapter 7 Bankruptcy

June 5th, 2015 at 8:12 am

Texas bankruptcy attorney, Texas chapter 7 lawyer, Texas chapter 13 attorney,Although much of the United States seems to have recovered from the Global Financial Crisis, thousands of Americans still declare bankruptcy every year. Although many are familiar with the general implications of bankruptcy, few first-time filers understand the intricate laws and how they relate to their particular case.

To shed some light on this complex legal field, here are four common chapter 7 bankruptcy FAQs:

What Makes Chapter 7 Unique?

Unlike chapter 13 bankruptcy, which restructures debt into a manageable payment plan, chapter 7 involves the liquidation of assets to pay off creditors. Depending on the types and amount of debt, chapter 7 bankruptcy may allow the filer to pay off his or her debts completely.

Is Chapter 7 Right for Me?

Before deciding to file for chapter 7 bankruptcy, you should find out if you qualify in the first place. Chapter 7 is available to any legal entity, individual or otherwise, according to Uscourts.gov.

In order to be eligible, you must attend credit counseling within 180 days before applying for chapter 7 bankruptcy. When filing, you must have enough income to pay your debts. There are other factors involving your legal and bankruptcy histories that may influence your eligibility. A bankruptcy attorney can assess your case to help you decide if filing for chapter 7 is the right decision.

What Information Will the Courts Require?

Like other forms of bankruptcy, chapter 7 requires an individual to file a petition. An attorney can help with the necessary paperwork. You will need to list all creditors, debts owed, and assets. You will also need to provide a comprehensive record of your income and living expenses.

Will I Lose My Home?

Chapter 7 involves the liquidation of assets to pay debts. You may have to sell your home or other properties during this process. However, this is not always necessary, and a lawyer can help you develop a bankruptcy plan that represents your best interests.

If you would like to speak with an experienced San Antonio bankruptcy attorney, call the Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation.

Avoid Bankruptcy by Keeping Your Debt under Control

November 11th, 2013 at 12:44 pm

texas-bankruptcy-debtIf you don’t have money to “treat yourself,” then don’t, and while you’re at it, turn off your lights to save on electricity. It sounds simple, but sometimes unexpected expenses pop out and as much as you cut back, there never seems to be enough money to cover everything that you need. Sometimes bankruptcy is your only option. On average, an American household with at least one credit card has a credit card debt of almost $16,000.

CNN Money offers the following tips and tricks about debt and spending to help you avoid bankruptcy:

  • Some debt is good: Taking out loans for big investments like houses and college is okay, but it is still important to only take out as much as you can pay back. Also be sure to compare interest rates before choosing a loaner.
  • Some debts are bad: If you consume items quickly, do not use your credit card to pay for them; these items include food and vacations. If you cannot pay off expenses that continue to build up each month, you are likely to dig yourself into a hole too deep to easily crawl out of. Try setting money aside for these items prior to the expense, so when the time comes, you have the funds ready to pay your bill.
  • Control your spending: Keep track of what you spend your money on each month so you can determine what to cut back on. Twenty dollars here and there adds up more quickly than you might think.
  • Pay off debts with the highest rates first: If you have a higher interest rate on one debt than another, get rid of that debt first. You will be better off letting a lower-rate debt sit and collect interest than having a high-interest debt go unpaid.
  • Avoid Minimums: Try to pay more than the minimum every time you pay your credit card bill, after a payment or two, you will just barely be covering the interest that is accumulating.
  • Be cautious of where you borrow: Borrowing against your 401(k) or home may be convenient, but it could lead to losing your home or not reaching your retirement investment goals.
  • Prepare for the unexpected: You never know when something will go wrong. Try to maintain a cushion of three to six months-worth of living expenses in an emergency fund. This can be used for medical procedures, broken appliances, or car repairs.
  • Don’t rush paying your mortgage: If you have other debt, don’t put all your money into your mortgage payment. Usually mortgages have lower interest rates than other debts. You may also deduct the interest payments on the first $1 million of your mortgage loan.
  • Do not wait to get help: If you cannot handle your debts, get help before you get in too deep.

Debt counselors can help or you can contact a San Antonio bankruptcy attorney for assistance. If you do not think you can pay your debts, attorney Chance M. McGhee can help you in Texas bankruptcy courts today.

Card debt being paid off at slower rates?

July 21st, 2013 at 1:06 pm

Lara   San Antonio bankruptcy attorneyAccording to a recent article, an Ohio State University study found that young Americans borrow a lot of money with credit cards, and they repay the debt much more slowly than generations before them.

Lucia Dunn, an economics professor at Ohio State University, has suggested that these new findings mean that the typical young credit card holder will probably die in debt to credit card companies.  Dunn was a co-author of the study, along with Sarah Jiang, who is the manager of credit and business strategy at Capital One Financial in McLean, Va.

According to Professor Dunn, if this pattern continues, the United States may end up with a serious financial crisis among the elderly people who cannot pay off their card debts.

The study was originally published in an issue of Economic Inquiry.  It was based on two long-term surveys, one of which included not only borrowing data but payoff data as well.  This information has not been previously available to many researchers.  It has allowed more accurate predictions in regards to when Americans will be financially able to pay off their card debts.

There are several reasons as to why these younger generations are struggling with debt more than those before them.  Credit is now much more readily available, and general attitudes toward debt have changed dramatically.  According to Dunn, “It’s a lot more socially acceptable to have debt and go into bankruptcy.”

The results have also found that younger people are paying off their massive credit card debts at slower rates.  The current payoff rate is approximately 24 percentage points lower than their parents’ and a dramatic 77 percentage points lower than their grandparents’ rate.

There are other factors that play into this, such as the skyrocketing levels of student debt, which leads to trouble paying off card debt.

There was a bright side to the study though.  Researchers found that if the minimum required monthly payment on cards were to be raised, borrowers would be forced to pay off more debt and possibly eliminate debt much earlier in their lives.

Credit card debt has become an increasingly serious problem for all Americans.  If you or somebody you know is struggling with debt and/or bankruptcy, do not hesitate to contact an experienced San Antonio bankruptcy attorney to answer your questions and get you back on the right track.

 

Card debt being paid off at slower rates?

June 27th, 2013 at 12:31 pm

According to a recent article, it has come to attention that young Americans borrow a lot of money with credit cards, and they repay the debt much more slowly than generations before them, says a recent study by Ohio State University. Although with the help of a Texas bankruptcy attorney, bankruptcy can be a solution to financial problems, it is smart to responsibly manage your finances.

Lucia Dunn, an econ professor at OSU, has suggested that these new findings mean that the typical young credit card holder will probably die in debt to credit card companies.  Dunn was a co-author of the study, along with Sarah Jiang, who is the manager of credit and business strategy at Capital One Financial in McLean, Va.

Lara   Texas bankruptcy attorneyAccording to Professor Dunn, if this pattern continues, the United States may end up with a serious financial crisis among the elderly people who cannot pay off their credit card debt.

The study was originally published in an issue of Economic Inquiry.  It was based on two long-term surveys, one of which included not only borrowing data but payoff data as well.  This information has not been previously available to many researchers.  It has allowed more accurate predictions in regards to when Americans will be financially able to pay off their card debts.

There are several reasons as to why these younger generations are struggling with debt more than those before them.  Credit is now much more readily available, and general attitudes toward debt have changed dramatically.  According to Dunn, “It’s a lot more socially acceptable to have debt and go into bankruptcy.”

The results have also found that younger people are paying off their massive credit card debts at slower rates.  The current payoff rate is approximately 24 percentage points lower than their parents’ and a dramatic 77 percentage points lower than their grandparents’ rate.

There are other factors that play into this, such as the skyrocketing levels of student debt, which leads to trouble paying off credit card debt.

There was a bright side to the study though.  Researchers found that if the minimum required monthly payment on cards were to be raised, borrowers would be forced to pay off more debt and possibly eliminate debt much earlier in their lives.

Credit card debt has become an increasingly serious problem for all Americans.  If you or somebody you know is struggling with debt and/or bankruptcy, do not hesitate to contact an experienced Texas bankruptcy attorney to answer your questions and get you back on the right track.

 

 

Image courtesy of stockimages/ Freedigitalphotos

All about Your Credit Score

June 20th, 2013 at 10:18 am

Your credit score is a three digit number that is used by businesses to determine if you are worthy of risk. Do not take this these three little numbers lightly. Although small, they have a lot a power and can affect your life negatively or positively. If you don’t think so, consider this; When you apply for credit, it is those three numbers that will determine if you get approved or denied. The same holds true when you apply for an apartment, insurance and a job.

Theresa    San Antonio bankruptcy attorneyYour credit score is determined by a mathematical formula and although there are tons of these formula models around, most companies use the FICO scoring model, which gauge between 300-850. The higher your score is the better risk you are–likewise the lower the score the higher the risk. Until 2009, each person had three FICO scores because there were three major credit reporting agencies using the FICO model, EquiFax, TransUnion and Experian. Experian is no longer under agreement with FICO. Although there are five categories that make up a credit score, each person’s score is determined based on their circumstances individually. That means that a new person with no credit history is not weighted the same as someone with an established credit history. Instead, the newbie is grouped and weighed against those in that same circumstance—tens of millions to be exact.

There are five categories used to make up a credit score. Payment history and debt owed are two categories that weighed most heavily.

  • How you make your payments and any delinquent accounts goes into the Payment history category and is 35% of the pie.
  • Outstanding Balances (30%)—how much you owe is a factor that is considered. For instance, if you have several open accounts with a large outstanding balance spread between them this might be viewed as a higher risk.
  • How long have you had credit (15%)—how long have you had your open lines of credit and their activity.
  • Types of Accounts (10%)—revolving and installments
  • New lines of Credit (10%)—how many new lines of credit and/or attempts to get new lines of credit is also weighed. This includes hits to your credit report from utility companies.

By law, each person is entitled to a free credit report once a year from each reporting agency. If you have questions about how bankruptcy can affect your credit or how to get your credit back on track, call your San Antonio bankruptcy attorney today.

 

Image courtesy of Renjith Krishnan/freedigitalphotos.net

Strategies for Balancing your Budget

May 20th, 2013 at 11:04 am

Lara May 1 McGhee bankWith the economic downturn that has taken place in the United States over the past few years, some people are still struggling to get back on their feet.  A recent article listed a few easy tips that could make balancing your budget and getting a handle on debt a much simpler task.

  1. Spend extra money on credit card and loan balances. USAA member Nikki Tracht and her family had been dealing with extreme levels of debt.  One of the things she learned was to start using any extra money on bills and loan balances. With her new system, Tracht makes minimum payments on all bills…except the one with the lowest balance.  Her extra money goes toward that one, so one bill is getting paid off completely at a time.
  2. Selling or returning what you’re not using. Many other members of USAA say that they usually sell their extra unneeded items online, because every dollar you get back counts.  The money earned can go towards your credit card bill and any other unpaid loans.
  3. Freeze your credit-literally.  One member of USAA, Jessica Otieno, found a solution to spending money on things she didn’t need by actually sticking her credit card in water and then keeping it in the freezer.  According to Otieno, “I figure if it’s something I really need, it will be there in a few hours when I need it.  And for now it’s locked out of my mind, so it’s not such an easy temptation.”
  4. Lower your rates.  One strategy that can really add up to a lot of savings is to reduce your interest rates and change your W-4 withholding.  It can sometimes just take a simple phone call to lower the interest rate on your credit card.  You can lower your interest while paying off the debt, getting rid of it even more quickly.  Tracht decided to adjust her W-4s so that she could get more money back each month instead of waiting for an income-tax refund.  She uses this money to pay off her debts more quickly.
  5. Look at your bank statements for any monthly auto-debited financial commitments.  When doing this, it’s helpful to see what you can cancel until you have a handle on your debt.  There are many things you can do without for a short while, such as gym memberships or cable, until your finances are under control.
  6. Don’t spend unless you have it.  USAA member Treva Tribit described how her family often has found ways to cut back.  Both her and her husband took on extra jobs and made use of coupons as much as they could.  They also decided to downsize their home and move somewhere that fit their family without being more than they could afford.  By cutting back and being careful what you’re spending, a lot of debt can be reduced.

Many people in the state of Texas are battling credit card and loan debts.  If you or a loved one are potentially facing bankruptcy, be sure to contact an experienced Texas bankruptcy attorney to assist you.

Means Test for Bankruptcy | San Antonio Bankruptcy Lawyer

March 27th, 2013 at 7:46 pm

Bankruptcy Lawyer  KerryMany people who find themselves in overwhelming debt often consider filing for bankruptcy. In order to qualify, a person must past what is known as the “means test”. The United States Department of Justice discusses means testing on its website.

When getting documentation ready, you should gather all sources of income:

  • wages, salary, tips, bonuses, overtime, and commissions
  • gross income from a business, profession, or a farm
  • interest, dividends, and royalties
  • rental and real property income
  • regular child support or spousal support
  • unemployment compensation
  • pension and retirement income
  • workers’ compensation
  • annuity payments
  • state disability insurance

Income that is not included in means test calculations are Social Security retirement benefits, Social Security Disability Insurance, Supplemental Security Income, Temporary Assistance for Needy Families and tax refunds.

You must then find out what your state’s median allowable income is. In Texas, if there is only one earner in the household, the maximum median allowed is $37,598, two earners $48,935, three earners $53,822 and four earners $63,999.

If you make more than the state’s median allowable income, you can deduct allowed expenses, such as:

  • Food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous.
  • Out-of-Pocket Health Care Expenses.
  • Mortgage or rent, property taxes, interest, insurance, maintenance, repairs, gas, electric, water, heating oil, garbage collection, telephone and cell phone.
  • Transportation expenses, including monthly payment, maintenance, repairs, insurance, fuel, registrations, licenses, inspections, parking and tolls.

Even if after calculating the final amount you still do not pass the means test, you may still have special circumstances that will qualify you to still be able to file for bankruptcy. Contact an experienced Texas bankruptcy lawyer to help take you through what can be a very complicated legal process.

 

 

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