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Common Myths About Bankruptcy in Texas

September 29th, 2020 at 9:52 am

Texas bankruptcy lawyer, TX chapter 7 attorneyAt our firm, we help clients every day with questions and concerns about the bankruptcy process under the U.S. Bankruptcy Code. Our experience has shown us that bankruptcy proceedings are often misunderstood, and unfortunately, misinformation abounds among those considering filing for bankruptcy. If you are thinking about bankruptcy as an option for your situation, it is very important for you to fully understand the potential advantages and disadvantages, as well as what might happen after the proceedings are complete. With this in mind, here are three of the most common myths about bankruptcy, along with the truth about each one.

Myth # 1: My Employer Will Be Notified That I Filed for Bankruptcy

Financial struggles are embarrassing for many people, and the reasons are understandable. As a result, it might be humiliating for you if your employer were to be notified of your bankruptcy filing. The good news is that this myth—albeit common—is just that: a myth. The bankruptcy process does not involve any employer notification whatsoever unless you happen to owe a formal debt to your employer somehow—in which case your employer would be notified, but as a creditor. Bankruptcy filings are public record, which means they could technically be published by the press, but it is unlikely that your employer would have much interest in searching through such publications.

Myth # 2: I Will Never Get Credit for a for a Major Purchase Again

Filing for bankruptcy can certainly have a negative effect on your credit rating, but the effects are temporary. Your bankruptcy will not bar you from ever having the ability to secure credit for major purchases like a home or automobile. For most bankruptcy filers, the credit approval needed to secure a home loan would be possible in about two to three years from the date of their bankruptcy filing. Obtaining approval for car loans and credit cards generally take less than two years. What is most important in re-qualifying for credit is making sure that you are rebuilding your credit properly in the period following your bankruptcy filing.

Myth # 3: I Do Not Have Enough Debt to Qualify for Bankruptcy

The bankruptcy process does not require any minimum amount of debt for a party to be able to file a petition for bankruptcy. While it is not prudent to initiate the process of bankruptcy without a reasonable amount of debt, what constitutes a “reasonable amount of debt” can vary widely from one situation to another. If you can demonstrate that your ability to manage your debt is severely diminished, it is likely that your bankruptcy petition will be accepted by the court. Keep in mind that if you are filing for Chapter 7 bankruptcy protection, you will need to undergo a means test to determine your ability to pay your debts.

Speak with a New Braunfels Bankruptcy Lawyer

The finances of many hardworking individuals have been severely impacted by the COVID-19 lockdown of the last few months. If you are in an unmanageable financial situation due to debt, filing for bankruptcy may be an option. Contact a knowledgeable San Antonio bankruptcy attorney to learn more about the different types of bankruptcy protection that might be available to you. Call 210-342-3400 for a free consultation with the Law Offices of Chance M. McGhee today.

 

Sources:

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

https://www.nerdwallet.com/article/finance/rebuild-credit-after-bankruptcy

Bankruptcy Myths

November 30th, 2018 at 5:37 pm

Texas bankruptcy lawyerMost of the time when you are dealing with legal matters, it is not a simple situation to be in. This is especially true when it comes to bankruptcy. In the United States, there are a handful of different types of bankruptcies that individuals can qualify for, each with their own stipulations and requirements for eligibility. Even beginning the process of determining whether or not you are eligible for bankruptcy can be confusing, especially when there are so many myths and misconceptions surrounding this topic. Here are three of those myths and the actual truth behind them.

Only People Who Are Frivolous with Money File for Bankruptcy

While it makes logical sense, it just is not true. Many people get themselves into debt and file for bankruptcy. Sometimes, people think that those who file for bankruptcy just do not want to pay back their debts, but often, it is the opposite. Many people who end up filing for bankruptcy have explored all of their other options and tried almost everything they could to get out of debt before filing for bankruptcy. Courts will not consider:

All of Your Debt Will Be Wiped Out After a Bankruptcy

Most of your types of debt can be relieved with a Chapter 7 or Chapter 13 bankruptcy, but there are still some kinds of debt that cannot be wiped out when you file. Some types of debt that cannot be relieved include:

  • Child support or spousal support obligations;
  • Student loan debt;
  • Restitution for any crimes you have committed; and
  • Tax debts.

A Bankruptcy Will Ruin Your Credit

While you will definitely see a drop in your credit score, it will not last forever. Some credit card and loan companies will not allow you to borrow from them and the ones that do allow you to borrow will typically charge you higher interest rates. Your credit score will likely recover shortly after you file for bankruptcy, but the bankruptcy will stay on your credit report for seven to 10 years.

A New Braunfels Bankruptcy Lawyer Can Help You Get Back on Your Feet

You may think that a bankruptcy will ruin your finances forever, but it will not – it will just take a few years to get you back to where you were pre-bankruptcy. If you think that a bankruptcy is the best option for you to take control of your debt, you need the help and guidance of a Kerrville bankruptcy lawyer. The Law Offices of Chance M. McGee can guide you through the bankruptcy process from start to finish and provide you with the necessary advice and resources that you need to have a successful bankruptcy case. To schedule a consultation, call our office today at 210-342-3400.

 

Sources:

https://www.nerdwallet.com/blog/finance/5-bankruptcy-myths-dispelled/

https://blog.credit.com/2018/03/7-bankruptcy-myths-debunked-64540/

https://www.creditcards.com/credit-card-news/5-bankruptcy-myths-busted-1282.php

Call today for a FREE Consultation

210-342-3400

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