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Exploring Federal and Texas Bankruptcy Exemptions

March 15th, 2019 at 4:27 pm

TX bankruptcy attorneyFor some people, filing for bankruptcy can be a scary thing. In the beginning, you may not know what the future has in store for you and you may wonder which of your possessions you are allowed to keep and which possessions you must give up. Exemptions are an important part of the bankruptcy process. In a bankruptcy case, exemptions are the possessions that you get to keep after you have liquidated your luxury assets to help pay back a portion of your debts. Each state has its own guidelines for what property is exempt during a bankruptcy. In 17 states, including the state of Texas, you are able to choose between state exemption guidelines or federal guidelines, but you must choose one or the other. It is important to understand bankruptcy exemptions because they do differ.

Federal Exemptions

The exemptions that are listed here are the exemption amounts for each individual bankruptcy filer. That means if both you and your spouse are filing for bankruptcy, you can double the amounts. Here is a list of the current federal exemption amounts for each individual filer:

  • Homestead Exemption: Up to $22,675 in equity for a primary residence;
  • Motor Vehicle: $3,775 for one vehicle per filer;
  • Jewelry: Up to $1,600 in jewelry, not including wedding rings;
  • Household Goods: A total of $12,625, but with no item valued more than $600 can be exempted. Household goods include clothing, furniture, appliances, linens, kitchenware, and personal effects;
  • Tools of the Trade: Up to $2,375 for items you use for work;
  • Domestic Maintenance: An amount reasonably necessary for support
  • Social Security, Unemployment, Veteran’s Benefits, Public Assistance, Disability: Exempt without regard to the value;
  • Personal Injury Awards: Up to $23,675, not including pain and suffering or actual pecuniary damages or loss of future earning capacity;
  • Retirement Accounts: Tax exempt retirement accounts are exempt, but IRAs and Roth IRAs are capped at $1,283,025; and
  • Wildcard Exemption: You may also exempt up to $1,250 of any property, plus $11,850 of any unused homestead exemption.

Texas Exemptions

The state exemptions in Texas are slightly different than the federal exemptions. Here is a list of exemptions you receive if you choose to follow state bankruptcy exemptions, rather than federal exemptions:

  • Homestead Exemption: You are permitted to exempt equity in your primary residence as long as that residence does not span more than 10 acres in a city, town or village, or 100 acres elsewhere;
  • Personal Property: If you are single, you can exempt personal property up to $50,000 in value. If you have a spouse, you are permitted to exempt up to $100,000 in personal property;
  • Motor Vehicle: You are allowed to exempt one motor vehicle per household member who has a driver’s license;
  • Pensions and Retirement Accounts: Most tax-exempt pensions and retirement accounts are exempt under Texas law. These can include government employee pensions and retirement accounts, IRAs and Roth IRAs, teacher’s retirement and pension benefits and law enforcement pension and retirement benefits.

Contact a New Braunfels, TX Bankruptcy Attorney Today

Many people who decide to file for bankruptcy do so because it is their last option for debt relief. While filing for bankruptcy can cause you to have to liquidate some of your non-necessary assets, you will not lose everything. At the Law Offices of Chance M. McGhee, we understand that filing for bankruptcy can be a hard decision, but we can help you throughout the entire process. Our skilled Boerne bankruptcy lawyers can help you understand the difference between federal and Texas state exemptions and choose the exemptions that would best benefit you. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.law.cornell.edu/uscode/text/11/522

https://statutes.capitol.texas.gov/Docs/PR/pdf/PR.41.pdf

https://statutes.capitol.texas.gov/Docs/PR/pdf/PR.42.pdf

Prevent Losing the Automatic Stay Because of a Prior Bankruptcy Filing

February 2nd, 2018 at 8:00 am

Either 1) wait one year to file your bankruptcy case after getting a prior bankruptcy case dismissed or 2) justify why the dismissal happened. 


The last few blog posts have been about situations in which the automatic stay is temporary, but still very effective. These situations have involved individual debts or sets of debts—such as income taxes or student loans. The automatic stay’s protection from debt collection in a Chapter 7 case is temporary for debts which survive the bankruptcy case because the automatic stay expires once the case is completed—usually just 3-4 months after filing. But that may be fine with income taxes and student loans for reasons explained in the last two blog posts.

Today we get into a situation much more dangerous. Here the automatic stay protection from debt collection could be lost as to ALL your debts.

The Automatic Stay

We start first with a bit of background. One of the most important and immediate benefits of filing bankruptcy is the automatic stay. This is the federal law that stops creditors from collecting your debts immediately when you file your bankruptcy case. It protects you, your income, and your assets. The automatic stay usually provides this protection as long as your case is open. (See Section 362 of the U.S. Bankruptcy Code.)

This is a crucial to bankruptcy relief. You certainly don’t want to lose this tremendously important benefit of bankruptcy. You especially don’t want to lose it unexpectedly, just when you are most counting on it. Yet there is a situation this could happen, so you want to know about and prevent it.

Losing the Automatic Stay

You could file a bankruptcy case and lose his protection essentially without warning 30 days later. The situation at issue is if you are now considering filing a bankruptcy case and you filed one prior bankruptcy within the last 365 days, which was subsequently dismissed. (See Section 362(c)(3) of the Bankruptcy Code.)

Don’t immediately assume this does not apply to you. IF you didn’t even think about and take ANY action to file a case in the last 365 days then in fact this problem likely doesn’t apply to you. But be very careful. We have seen circumstances when a prior bankruptcy was filed and dismissed without the debtor being fully aware of it then and so without remembering it later when filing another case later.

Avoid Losing the Automatic Stay 30 Days After Filing

Assume that about 10 months ago you had filed a bankruptcy case. But immediately after filing you settled the debt that had pushed you into bankruptcy. So you didn’t take any further action on your bankruptcy case, and it got dismissed (thrown out and closed).

Now, many months later, your other creditors are causing you big trouble so you again file a bankruptcy case. You don’t consider the prior case to have been a real bankruptcy filing because you didn’t follow through on it. You consider the new case to really be your first bankruptcy filing. You may even tell your bankruptcy lawyer about the prior filing.

But that would be a mistake. As a result, the automatic stay would immediately go into effect with the current bankruptcy filing as usual. However, the automatic stay would automatically expire 30 days later. That is, it would expire unless by then you and your attorney would show the court that you meet certain conditions. 

Those conditions involve justifying why the previous case was dismissed and why the present case is being filed. Depending on the exact circumstances, you may be able to justify filing a second case within a year. These circumstances involve the reasons for the prior case dismissal, and financial changes from the prior filing until the present one. (Again, see Section 362(c)(3).)

However, if you are not be able to convince the court, you’d be subject to ongoing debt collection from 30 days after filing until the debts were discharged 2-3 months later. That would make for an unexpected mess, and likely quite an expensive one.

Conclusion

So, make sure there was no prior filed and dismissed bankruptcy case within the last 365 days before the filing of your current case. If there was one, consider waiting for a full year to pass before filing the new case. If that’s not feasible, discuss with your lawyer whether your circumstances would result in your bankruptcy judge preserving the automatic stay because your prior filing/dismissal and new filing were justified.

 

Timing: Writing Off Income Taxes

September 22nd, 2017 at 7:00 am

Usually you can discharge—write off—an income tax debt by just waiting long enough. Here’s how to discharge a tax debt under Chapter 7.  

 

Timing is Just About Everything

If you owe an income tax debt and file a Chapter 7 “straight bankruptcy” case, one of two things will happen to that debt:

  1. It will be discharged—permanently written off—just like any medical bill or other ordinary debt, or else
  2. Nothing will happen to that tax debt; you’ll continue to owe it as if you hadn’t filed bankruptcy.

The difference, most of the time, is timing—when you file your Chapter 7 case.

The Timing Rules

In most situations a Chapter 7 case will discharge an income tax debt if you meet two timing conditions. The date you and your bankruptcy lawyer file that case must be both:

  1. at least 3 years after the tax return for that tax was due, and
  2. at least 2 years after that tax return was actually submitted to the IRS or state tax authority.  

See Sections 507(a)(8)(A)(i) and 523(a)(1)(B) of the U.S. Bankruptcy Code.

One important twist: IF you got an extension to file the applicable tax return, then the above 3-year waiting period doesn’t begin until the end of the extension. Section 507(a)(8)(A)(i). For example, let’s say you got a 6-month extension from April 15 to October 15 of the pertinent year. So then the 3-year period starts on that October 15 instead of on the usual April 15 return filing due date.

These Rules Applied

Assume you owe $7,500 in income taxes for the 2013 tax year. You’d asked for a 6-month extension to October 15, 2014. But then you didn’t actually submit the tax return until December 31, 2014.  

If you’d file a Chapter 7 case at any point before October 15, 2017, you’d continue owing the $7,500 tax. If you’d file on or after October 15 you would likely not owe a dime.

That’s because on October 15, 2017:

  1. At least 3 years would have passed since the extended due date of October 15, 2014, and ALSO
  2. At least 2 years would have passed since actually submitting the tax return on December 31, 2014.

Or, take with same $7,500 tax debt for the 2013 tax year with similar facts but a couple differences. You didn’t ask for an extension, but also didn’t submit the tax return until December 31, 2015.

Under these facts you’d have to wait until after December 31, 2017 to file the Chapter 7 case.

That’s because:

  1. 3 years since the tax return was due—on April 15, 2014—would have passed on April  15, 2017, but
  2. 2 years from the day the return was actually submitted would not pass until December 31, 2017.

Other Conditions

Earlier we said that “in most situations” Chapter 7 discharges income taxes debt when you meet the two timing conditions. So what are the other situations when taxes would not be discharged, even after meeting the 2-year and 3-year conditions?

There are two sets of them.

The first set comes into play if you made an “offer in compromise” to the IRS or state to settle the debt, or if you had filed a prior bankruptcy case involving this same tax debt. Since these are unusual situations, and the rules are detailed, talk with your bankruptcy lawyer if they apply to you.

The second set applies in situations in which the taxpayer “made a fraudulent return or willfully attempted in any manner to evade or defeat such tax.” Section 523(a)(1)(C).  Different bankruptcy judges interpret this language differently. For example, is it a willful attempt to evade a tax to merely not submit its tax return when due, even if you submitted it voluntarily a year later? How about if you didn’t submit the tax return until the IRS personally contacted you to do so? Again, talk with your bankruptcy lawyer about how this part of the Bankruptcy Code is interpreted by your court. 

 

The Pursuit of Happiness this 4th of July

July 3rd, 2017 at 7:00 am

This 4th of July follow the Declaration of Independence and claim your right to “Life, Liberty and the pursuit of Happiness.”


Your Life in Mid-2017

If you’re reading this on the Fourth of July weekend there’s a good chance you have some serious financial problems. Your debts may be overwhelming you. You’re worrying about them all the time.

Odds are you’ve probably been trying to improve your situation for a long time, maybe even for years. It’s really adversely affecting your life. It’s dragging down your personal relationships. You’re worried that the anxiety is harming your health, and then you worry about that, too! It’s hard to feel good about yourself with this all never far from your mind. You aren’t often relaxed or happy.

The Declaration of Independence is now 241 years old. It states at the beginning of the Preamble:  

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Isn’t it time to follow this self-evident truth: you’re in a vicious cycle and need to find a way to a better life, financial liberty, and the freedom to pursue your life dreams?  

Happiness to Pursue

You’d like to be able to afford what you need, what are important to you. You’d like to not be anxious about money all the time. You’d like feel hopeful, to have a future worth looking forward to.

You’d like financial freedom.

The First Step

It’s often true that the first step is the hardest. We often figure that solving a problem will be harder than it actually ends up being. Sometimes we’re pleasantly surprised after we take the first step that it’s not as hard as we’d thought. Then afterwards we wish we’d had the nerve to take that first step much earlier. We kick ourselves about how much grief we could have avoided.

So what’s the simple but crucial step here? What do you need to do avoid future unnecessary grief?

Simply find out what your legal options are about your debts.

Move from Fear to Realistic Options

You discover your options by seeing a lawyer who helps people like you solve their consumer and/or business debt problems.

This may be easier than you think. That’s because asking for this kind of help is usually free, at least to get started. Most lawyers who help people with their debts don’t charge for their initial consultation with you.

But Don’t You Just Get What You Pay For—Nothing!?

When you go to the right lawyer you will get valuable information and advice at the free initial consultation. At this meeting you will have the opportunity to tell the lawyer about your situation, your concerns, and your goals. The lawyer will usually outline your most likely legal options, along with their major advantages and disadvantages. This initial meeting is usually extremely valuable.

So why do most lawyers who help consumers and small businesses with debt problems not charge for their initial meeting?

First, let’s admit right from the start that it’s partly a marketing tactic. A lawyer naturally does hope that once you invest the time to meet with him or her you will more likely hire that lawyer if you decide to use a lawyer.

Second, when you’re in financial trouble you likely can’t spare the money to pay for shopping for a lawyer. So most bankruptcy lawyers recognize that they can’t charge for initial consultations. They need to give you a chance to check them out and get advice from them.

Third, most bankruptcy lawyers who serve debtors are genuinely compassionate folk. Most chose to specialize in this area of law for that reason. So they actually do care about you and want to help you have a happier life.

So it’s only sensible to take advantage of their free offer.

Be Selective

At your initial meeting with a lawyer, you’re “just shopping” but doing so seriously. It’s a big investment of your time, so learn as much as you can.

Of course you have absolutely no obligation to continue working with that lawyer. You are asking for information and advice, and maybe looking for a lawyer to help you.

So during and after the initial meeting ask yourself the following questions:

  • Did the lawyer listen carefully to you and get all the necessary information about you and your finances?
  • Did he or she present your options clearly? Did you have a chance to ask questions about them that were answered in an understandable way?
  • Do any of the options sound practical and worth doing?
  • Was the lawyer considerate towards you, respectful, help you feel comfortable?
  • Was the lawyer knowledgeable but able to communicate in a way that made sense to you?
  • Were you comfortable with him or her? Do you feel like you could trust him or her? Were you and the lawyer a good fit?

Don’t Bankruptcy Lawyers Always Recommend Filing Bankruptcy?

No. That would go against their ethical and legal obligations to you.

Lawyers are strictly required to serve you. It is illegal for them to pressure you into any option at all. Their role is to advise you of your options, and your advantages and disadvantages as to each one. They must provide this advice without considering their financial self-interest.

If they do anything different they can be sued for malpractice for giving bad advice (as lawyers quite regularly are). Or they could lose their law license, and thus their livelihood.

This all true even as to a free initial consultation. When you have a lawyer-client relationship, it doesn’t matter what your financial arrangement is with the lawyer.

Crucially, a lawyer’s job is to lay out the options so that YOU can make an informed decision. The lawyer doesn’t tell you what to do or make you do anything. That’s your choice. Sure, the lawyer’s job is to advise you, and usually to make recommendations based on your circumstances. But it’s not to make decisions for you or to make you do anything.

If the lawyer you meet seems to be putting any uncomfortable pressure on you, find another one who respects your appropriate role as the decision-maker.

Take that First Step

On the 5th of July call a lawyer to set up a consultation meeting. And go to that meeting. You will almost certainly come away from it much, much better informed about your options.

You will very likely be able to get out of your vicious cycle and find a way to a better life. You’ll finally get the freedom to pursue happiness.

 

Making Sense of Bankruptcy: Using State Property Exemptions in Federal Bankruptcy

August 12th, 2015 at 3:00 am

The U.S. Constitution makes bankruptcy a federal procedure. So why is the amount of assets you can protect different in each state?

 

The sentence we’re explaining today is:

The Constitution gives Congress power to make “uniform Laws” on bankruptcy, yet for much of our history it has had trouble doing so in part because of competition between states’ vs. federal powers, which eventually resulted in a compromise allowing each state to require debtors filing bankruptcy to use that state’s set of property exemptions instead of the federal one.

The Power to “Establish… Uniform Laws on the Subject of Bankruptcies”

From the beginning, and without change throughout our history, the U.S. Constitution has said that Congress has the power “to establish… uniform Laws on the subject of Bankruptcies throughout the United States.” Article 1, Section 8, Clause 4.  The reason this was put into the Constitution was that the Framers wanted to economically unify the states, and for each state to have its own bankruptcy laws and procedures would instead cause conflicts among states and their residents.

This clause in the Constitution about “uniform laws on… Bankruptcies throughout the United States” makes it sound like filing a bankruptcy case should be the same in every state. But in fact two bankruptcy cases with the same facts could play out quite differently in different states. That’s because of two main reasons.

First, there are many areas of law that are reserved by the Constitution to the states ,and those state laws can greatly affect how the federal bankruptcy laws are applied. Some areas of state laws that affect bankruptcies include: personal property and real estate, marriage and divorce, state income and property taxes, insurance, personal injury, criminal, and debt collection. For example, federal bankruptcy law says that all of your assets at the time of filing are part of the “bankruptcy estate,” but it is state law that determines what belongs to you and what belongs to your spouse.

Second, the federal Bankruptcy Code explicitly allows certain aspects of bankruptcy law to be applied differently state by state. Perhaps the most important of these is that each state is allowed to decide whether people filing bankruptcy in that state must use that state’s list of property exemptions or can use the federal one contained in the Bankruptcy Code. Exemptions are a crucial part of bankruptcy law and procedure. They determine whether you can protect all of your assets when you file a Chapter 7 “straight bankruptcy” case, and they affect how much you have to pay to your creditors in a Chapter 13 “adjustment of debts” case. Differences in property exemptions from state to state, and between your state and the federal exemptions can have a big practical effect on your bankruptcy case.

For a rather extreme example involving two neighboring states’ homestead exemptions, you can exempt only $5,000 of value in your home if you live in Mobile, Alabama (Ala. Code Sect. 6-10-2), but if you live just 60 miles to the east in Pensacola, Florida, you can exempt an unlimited amount of value in your home (Art. X, Sect. 4, Fla. Const.).

How did it happen that the supposedly “uniform” bankruptcy laws ended up being applied so very differently in different states?

The Contentious History

Believe it or not this very issue has been fought over about throughout much of our country’s history. In fact it’s arguably part of why we didn’t have ANY bankruptcy law most of our first 110 years or so.  

Through the late 1700s and much of the 1800s the economy went through a series of financial “panics.” During these farmers and merchants, particularly in the southern and western regions of the country, would lose their homes, farms and businesses, often to out-of-state creditors in the northeast. Because of this, laws exempting certain property from creditors were adopted and spread quickly through the South and the Midwest during the 1840s and 1850s.

Three different times during the 1800s Congress passed a set of bankruptcy laws, each time to address one of the reoccurring financial panics. But because of the disagreements among the states, and between the federal government and the state, none of these bankruptcy laws stayed in force for long, expiring or being repealed as soon as the economy improved. With no federal bankruptcy law in effect most of the time, various kinds of state laws tried to fill the gap in various ways, including through property exemptions.

The first “permanent” bankruptcy law was passed in 1898, but it could only muster enough votes in Congress by letting states continue to use their own system of exemptions for bankruptcies filed by their residents.

The Big Compromise

This brings us to the latest total overhaul of federal bankruptcy law in the late-1970s. At that point some in Congress wanted to continue using state exemptions as in the 1898 law, while others wanted a mandatory uniform federal system.  A compromise was struck giving each state a choice: it could either require its residents to use the state’s own set of exemptions, or else let them use either a new set of federal exemptions or the state’s exemptions.

As a result in every state its residents filing bankruptcy can use their state’s exemptions, while 19 states (plus the District of Columbia) have chosen to also give their residents the option of using the federal exemptions. Those 19 states are Alaska, Arkansas, Connecticut, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington, and Wisconsin.

So, that’s why bankruptcies, and particularly property exemptions, can look quite different from one state to another, in spite of the “uniform Laws” language of the Constitution.

 

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 Uscourts.gov 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.

 

Bankruptcy Filing Questions

June 12th, 2015 at 9:03 pm

Texas bankruptcy lawyer, San Antonio chapter 7 lawyer, Texas chapter 7 attorney,Making the decision to file for chapter 7 bankruptcy is not easy. The thought of selling a home and other assets to pay debt is stressful to say the least. However, chapter 7 bankruptcy is often a smart option for those who want to achieve financial independence and stop creditor actions.

Before filing any chapter of bankruptcy, it is important to learn about the process and qualification guidelines. There are certain questions you must ask, and an attorney can guide you through the proceedings, address your concerns, and ensure you do not make mistakes that compromise your interests.

If you are considering bankruptcy, be sure to ask your bankruptcy lawyer these two questions:

How Will My Income Affect My Bankruptcy Options?

An applicant’s income is one factor that determines whether chapter 7 or 13 bankruptcy is the best course. If your income is greater than the state median, according to UScourts.gov, a request for chapter 7 may automatically convert to chapter 13 because the applicant will have the means to work with a structured payment plan.

How Much Debt Do I Owe?

One of the first steps in filing for bankruptcy is to calculate the total debt owed. This total may influence your eligibility for certain bankruptcy chapters, and there may be alternatives to bankruptcy based on the amount you owe.

Even relatively high amounts of debt may be manageable without bankruptcy — provided you are making concerted, proactive financial decisions. However, if you are finding that your living expenses are conflicting with your ability to make payments, then bankruptcy might indeed be the answer.

Different chapters do have maximum debt limits. For example, the maximum amount of unsecured debt allowed for chapter 13 bankruptcy filers is just greater than $380,000. The limit for secured debt is around $1,149,000. If your total debt is near these numbers, you should discuss your options with a lawyer.

If you would like to speak with a San Antonio bankruptcy attorney, contact the Law Offices of Chance M. McGhee. Schedule a free initial consultation by calling 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 Uscourts.gov, 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.

Can Bankruptcy Stop Wage Garnishments?

April 17th, 2015 at 9:58 am

Texas bankruptcy lawyer, Texas chapter 7 attorney, filing for bankruptcy, debt collection, A wage garnishment is a court order that requires a debtor’s employer to pay a portion of the debtor’s wages to one or more creditors. Many people consider filing for bankruptcy in order to stop or prevent wage garnishment.

According to federal bankruptcy law, only a chapter 7 bankruptcy can stop a wage garnishment. During chapter 7 bankruptcy, the filer liquidates his or her assets to pay off debts, and the court issues an automatic stay.

This immediately stops wage garnishments, as well as all other debt-collection proceedings such as foreclosures or evictions. Chapter 7 bankruptcy will only put a stop to commercial wage garnishments, such as those related to credit cards, certain loans, and mortgages, but it will not stop garnishments for child support or delinquent taxes.

To qualify for chapter 7 bankruptcy, a person’s monthly income needs to be equal to or less than the state’s median household income. People whose salaries are above this median must pass a “means test.”

The means test determines whether a person has enough disposable income to repay the debt. If the filer has enough income, then chapter 7 bankruptcy is not an option. However, the debtor may be able to file for chapter 13 bankruptcy instead. Chapter 13 bankruptcy does not stop garnishments.

Filing for bankruptcy is a serious decision. However, it is a smart one in many cases. Bankruptcy may allow you to keep your home, car, and other property, but it may affect your credit rating and stay on your credit history for up to 10 years.

Should you choose to file for bankruptcy, your first step should be contacting a skilled San Antonio bankruptcy lawyer. Attorney Chance McGhee has more than 20 years of experience practicing law. He can explain how the bankruptcy process works and discuss your options. Call 210-342-3400 for assistance with chapter 7 or chapter 13 bankruptcy.

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

210-342-3400

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