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The Basics of Texas Wage Garnishment and Bankruptcy

September 30th, 2019 at 9:58 am

garnishmentMost Americans have some form of debt. According to the latest figures from the Federal Reserve, consumer debt amongst Americans has reached $4.1 trillion. While many people successfully manage their debt through careful budgeting and conservative spending, there are some who are in over their heads. Not paying your debts as you should be paying them can result in consequences. Debtors will try almost anything to get the money that you owe them, including something called wage garnishment.

What Is Wage Garnishment?

If you are legally obligated to pay back a debt, you must do so or face consequences. One of those consequences is wage garnishment. A wage garnishment, or wage attachment, is a court order that a creditor or lender sends to your employer. The order instructs your employer to withhold a certain amount of money from your paycheck and send it directly to your lender. Federal wage garnishment laws apply, but wage garnishment laws in Texas are slightly different.

Texas Wage Garnishment Laws

Unlike many states, Texas is rather strict when it comes to wage garnishments. In Texas, most lenders are unable to garnish your wages for unpaid debts. The only debts that qualify for wage garnishment in Texas include:

  • Unpaid taxes or fines
  • Unpaid child support or alimony
  • Unpaid student loans that have been declared to be in default

Texas laws state that your wages are part of your “personal property exemption” when it comes to creditors’ claims, meaning a creditor does not have a right to your wages, even if you owe them money.

Wage Garnishment and Bankruptcy

If you are experiencing wage garnishments, you may want to consider filing for bankruptcy. A Chapter 7 bankruptcy is the only type of bankruptcy that can stop wage garnishments once the automatic stay is put into place. The bankruptcy can also help you to get back on your feet financially and use your funds that have been freed up to pay some of your other debts that do qualify for wage garnishment, like taxes or child support.

Talk With a San Antonio, TX Bankruptcy Attorney About Your Options for Relief

Wage garnishments can be devastating for some people. In some cases, bankruptcy might be your best option if you are experiencing wage garnishment. The smartest thing you can do is to get in touch with a skilled New Braunfels, TX wage garnishment defense lawyer to discuss your situation and figure out what your next step should be. At the Law Offices of Chance M. McGhee, we understand how wage garnishments can affect your livelihood. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.federalreserve.gov/releases/g19/current/

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

Can I Discharge My Student Loans in Bankruptcy?

January 25th, 2019 at 10:48 pm

bankruptcyThere are over 44 million young adults in the United States who currently have student loan debt. Those 44 million people owe a combined total of $1.52 trillion, with the average borrowing being $37,000 in debt by the time they graduate. Student loan debt is a rising issue, especially since many have trouble making their payments. One of the most searched questions online is, “Can I discharge my student loans in bankruptcy?” In short, no, you usually cannot, but as with many things, there are a few exceptions to that rule.

The Brunner Test

In 1998, a law was passed that stated you could not discharge student debt unless you could prove that repaying that debt would cause you undue hardship. In 2005, that law was extended to all types of student debt, including private student loans.

Proving undue hardship can actually be quite difficult. The test that is most commonly used in court to determine whether or not you would be experiencing undue hardship is called the Brunner Test. The test is actually quite simple and consists of three elements. These are:

  • Making student loan payments would not allow you to maintain a minimum standard of living because of your current income and expenses;
  • You have extenuating circumstances that make it likely that you will be in the same financial situation for most of the duration of the repayment period; and
  • You have attempted to repay the loan by seeking alternative repayment options and limiting your expenses as much as possible.

This is the basic formula that most courts will use to determine if you are experiencing undue hardship. Some courts will take into account other facts, like age, income, health, other financial circumstances and other factors.

A New Braunfels Bankruptcy Lawyer Can Help You Choose Your Best Course of Action

It can be difficult to know when you need to file for bankruptcy. There are many other options for student loan repayment than a bankruptcy. For federal loans, there are income-driven repayment plans and many private loan servicers will also work with you to create a repayment plan. Bankruptcy should be used as a last resort, but sometimes it is necessary. If you are thinking about filing for bankruptcy, contact us at the Law Offices of Chance M. McGhee. Our skilled Kerrville bankruptcy attorneys can help you go over your finances and choose which type of bankruptcy would be best for your situation. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.forbes.com/sites/zackfriedman/2019/01/09/student-loans-bankruptcy-discharge/#3230fc0e6d56

https://www.forbes.com/sites/zackfriedman/2018/06/13/student-loan-debt-statistics-2018/#774d1c7310fa

https://www.nerdwallet.com/blog/loans/student-loans/student-loans-bankruptcy/

How to Rebuild Credit After a Texas Bankruptcy

October 14th, 2018 at 9:51 pm

Texas bankruptcy lawyerThough many people think a bankruptcy can ruin their credit for the rest of their lives, that is not necessarily true. When you file for a Chapter 7 or Chapter 13 bankruptcy, it stays on your credit report for at least seven years. Though that can be disheartening, you should not worry too much – you can start to rebuild your credit right after you file for bankruptcy. Often, people find that their financial situations and credit scores are even higher than they were before bankruptcy, given you can change the reason you became buried in debt. Though it can seem daunting, rebuilding your credit score after you file for bankruptcy is crucial. Here are XX ways to help build your credit back up.

Create a Budget

One of the first ways you can make sure you are on the track to financial success is by creating a monthly budget to keep track of your spending. There are numerous websites and apps that can help you do this, but they all essentially do the same thing – take your monthly earnings and subtract monthly expenses, budget for a few luxuries and then use what is left over to pay off debt, invest, or deposit into a savings account.

Open a Secured Credit Card or Use a Cosigner

After you have filed for a bankruptcy, credit card companies see you as a high-risk borrower, meaning there is a greater chance that they will not get their money from you. This can be a problem because one of the main ways of building credit is through credit cards. A way around this is opening a secured credit card, which is slightly different from a traditional credit card because you must put down a deposit to open the card. Another option would be to open a traditional credit card, but have a cosigner agree to pay off the debt if you for some reason are not able to.

Consider a Secured Loan

Credit scores are not all about credit cards – many types of debt are taken into consideration when determining your credit score, so it is good to diversify your debt. Again, lenders are going to see you as a high-risk borrower, so many will likely not allow you to take out a traditional loan, but you may be able to take out a secured loan, which functions much like a secured credit card. Secured loans allow you to borrow money that you already have deposited and some allow you to may payments toward a certain amount, though you would not have access to those funds until all payments were made.

Contact a Kerrville Bankruptcy Lawyer

Though filing for bankruptcy can be intimidating and even embarrassing for some, often bankruptcy is the only choice. By hiring a knowledgeable Boerne bankruptcy attorney, you can ensure that you are doing the right thing for your finances and your family. Bankruptcies can be damaging to your credit score, but there are ways you can rebuilt them. Contact the Law Offices of Chance M. McGhee to discuss your options. To schedule a consultation, call the office at 210-342-3400.

 

Source:

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

 

Lawsuit Highlights the Issues with Debt Settlement Services

August 27th, 2018 at 4:44 pm

Texas bankruptcy lawyerRecently, the Consumer Federal Protection Bureau (CFPB) initiated a lawsuit against the nation’s largest debt settlement services provider, Freedom Debt Relief. According to the claims, this formerly well-regarded company was not telling the truth as far as their fees and the reach of their capabilities. Unfortunately, this is not the first, nor the last debt settlement company openly deceiving clients to earn their trust and boost their profits. These are a few of the top complains that surfacing from the litigation.

Debt Settlement Promises Are Misleading

Clients complain that Freedom Debt Relief led them to believe that all of their debts were negotiable and would settle within months. Unfortunately, debt settlement services do not have the capabilities of stopping collection attempts. Therefore, many clients continued experiencing harassing phone calls, emails, and postal collection attempts, many of which went further into collections or resulted in judgments. Filing for bankruptcy is the only method that places an automatic stay on all collection attempts; meaning, foreclosure, repossession, and harassment all must come to an abrupt stop.

Clients Experienced Deceptive Practices

Many customers claim Freedom Debt Relief verbally agreed that they would negotiate all of their debts; yet, sources show the company had prior knowledge that several companies already refused to consult with their company, regardless of the client. In the debt settlement options, creditors examine each offer on a case-by-case basis and choose whether or not to negotiate. Bankruptcy does not give any creditor the authority to refuse, except on disallowable debts. If your debt is not allowed in the bankruptcy, your attorney will let you know before beginning the filing process.

Freedom Debt Relief Lied About Fees

All debt settlement companies receive payment based on the portion of any amount they convince a creditor to forgive or reduce. One of the significant complaints emerging from the lawsuit was customers realized the company assessed additional fees, including when a creditor voluntarily gave up collection attempts without Freedom’s involvement. Debt settlement services nickel and dime their payments, making it impossible for clients to know how much they should expect to pay the company. Attorney Chance M. McGhee lets each of his clients know how much they can expect to spend, leaving little room for surprises.

Get the Reliable Results You Need

A significant number of bankruptcy filers began by trying debt settlement first. Unfortunately, the complaints are consistent, regardless of their chosen company: the process takes too long and ultimately costs too much. If you decide to file for Chapter 7 or Chapter 13 bankruptcy, you will see results in months, not years. A Schertz, TX bankruptcy attorney will give you honest representation with no hidden surprises. Law Offices of Chance M. McGhee has decades of experience assisting clients through the bankruptcy process and earning them the financial freedom their families needed. Let us earn your trust today. Call us at 210-342-3400 to find out how bankruptcy can benefit your family in a free no-obligation consultation.

Source:

https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-freedom-debt-relief-misleading-consumers-about-its-debt-settlement-services/

Managing Your Finances after Bankruptcy

June 29th, 2018 at 8:03 pm

Texas bankruptcy attorneyThink about it: you have already made the mistakes; therefore, you know what to avoid. Bankruptcy tends to make filers better money managers both through experience, as well as through the required courses. Most new clients ask how long it will take to rebuild their credit, followed shortly by the firm statement that they will only ever pay for anything in cash ever again. Bankruptcy is one experience that will help you better manage your finances and empower you to to make better decisions in the future.

Education Requirements

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) due to their belief that the system was too lenient on those filing for bankruptcy. At that point, they instituted a two-part education program as a requirement to file for bankruptcy. These sessions include:

  • Pre-petition credit counseling which explores all financial relief options to determine if bankruptcy is, in fact, the best option; and
  • Post-petition financial management which occurs before the discharge is finalized and educates clients about how to move forward, budget, manage money, and rebuild credit successfully.

Beyond the Sessions

Most families attending these courses gain essential insights into bankruptcy alternatives, if they qualify, as well as best practices in money management to avoid a recurrence. A few of the most helpful pieces of advice include:

  • Get budget help through financial tracking apps;
  • Start an emergency savings fund instead of an emergency credit card;
  • Live within your means (appropriate house and car size);
  • Eat at home more often than you eat out (this includes coffee and sodas);
  • Cut cable and other unnecessary expenses;
  • Unsubscribe from tempting advertisement emails;
  • Teach kids to be thrifty in spending; and
  • Remember that less is more.

Ask Someone with Experience

Believe it or not, you will begin receiving offers from lenders offering you loans and credit lines shortly after finalizing your bankruptcy. Unfortunately, many people accept these offers for fear that there will be no other offers. Advice to consider is to avoid large loans in the beginning. If you work with small lines of credit and keep them paid on time, eventually better offers will come in. If you have questions about how bankruptcy can help your current situation and your future, a Boerne bankruptcy lawyer can help. At  Law Offices of Chance M. McGhee, we provide cost-efficient and compassionate counsel to individuals, families, and small business owners struggling with a financial crisis. Call us today at 210-342-3400 to schedule a free case review.

 

Sources:

http://www.txs.uscourts.gov/bankruptcy

 

Reclaiming Your Texas Driver’s License through Bankruptcy

April 12th, 2018 at 11:34 pm

Texas bankruptcy attorneyCreditors can take the issue of unresolved debt to court and have a judge issue a judgment against the debtor. In most states, judgments do not severely impact the life of a debtor thanks to existing exemptions that protect against losing homes and other possessions. However, in Texas, an unpaid judgement authorizes loss of driving privileges by suspending a driver’s license. The suspension goes on often indefinitely until there is a proof of repayment, or until the issuance of an automatic stay. Such a blow to one’s independence can wreak havoc on any life. Fortunately, reclaiming your license is one of the many surprising benefits of filing for bankruptcy.

How The Loss of Driving Privileges Turns Into A Catastrophe

Although for some the loss of legal driving privileges is a slight inconvenience, the set back is devastating for many others. Having driving abilities is not just about getting to work on time, it is also family availability and other daily life requirements. Furthermore, many employers require a valid driver’s license to maintain employment, such as in positions requiring travel. The next steps are up to the employer. Sometimes, an employer can choose to relocate an employee to an area that does not necessitate a license (or the handling of money, since financial instability creates a liability for many business operations). If termination of employment is the ultimate decision, the loss of income may affect the following payments:

  • Mortgage or rent;
  • Insurance;
  • Groceries; and
  • Electricity.

Get Your Driver’s License Back

If financial difficulty resulted in the loss of your driver’s license, losing your job only compounds the issue further. Fortunately, bankruptcy can enable you to get your license back. Filing for bankruptcy puts an automatic stay in place, which prevents creditors from pursuing all attempts to collect on debt, enabling the filer to reinstate the license without having to satisfy the obligation. Doing so in a timely manner can prevent job loss and the potential accompanying snowball effect the loss of income can have on bills.

Ask an Attorney

If you lost your license as a result of the inability to pay a bill, the last thing you likely want to happen is to experience a job loss on top of it all. Explore the option of bankruptcy with a San Antonio bankruptcy attorney today. At the Law Offices of Chance M. McGhee, we understand how frightening and embarrassing the thought of bankruptcy is, but we also know that waiting can make matters worse. Discover your options today by calling 210-342-3400 for your free and confidential consultation.

 

Sources:

http://www.govcollect.org/files/Texas_Debt_Collection.pdf

https://www.hrbartender.com/2012/recruiting/ask-hr-bartender-losing-your-drivers-license-can-impact-your-career/

 

Strategies to Avoid Credit Card Debt

July 17th, 2015 at 10:13 am

Texas bankruptcy attorney, Texas chapter 7 lawyer, Texas chapter 13 attorney,Credit can be a helpful tool when a person faces unexpected financial hardship, but it is also a major contributor to many Americans’ debts. The convenience of credit and bonus offers from credit card companies motivate many consumers to spend out of their budget.

By understanding how to manage credit cards responsibly, it is possible to avoid the stress and uncertainty that come with insurmountable debt. Read on to learn three strategies to avoid credit card debt.

Keep Diligent Records of What You Spend

Online shopping has made it particularly easy to overindulge with credit cards. People can spend thousands with the click of a few buttons.

According to the Federal Trade Commission, one of the best ways to avoid serious debt from online spending with credit is to keep a record of purchases. This will help you understand how much credit spending is affecting your finances.

Do Not Spend More than Half of Your Credit Card Limit

As a general rule, you should never spend more than half of your credit limit. This will ensure that you have credit available in a financial emergency. It can also prevent compulsive spending.

When Dealing with Debt Collection Efforts, Always Keep a Record

Collection agencies love to harass debtors who have outstanding balances. They often call debtors several times each day to request payments.

Even if you are in collections, it is important to understand that you still have rights. There are laws that limit the strategies collection agencies can use to recover payments. Be sure to keeping a record of your communications with debt collectors to protect your rights.

If outstanding credit card debt has become too much for you to handle, call an experienced San Antonio bankruptcy attorney. At the Law Offices of Chance M. McGhee, we can evaluate your situation and create a debt-relief plan. This may involve chapter 7 or 13 bankruptcy, or a bankruptcy alternative. To get started, call our office today at 210-342-3400 for a free initial consultation.

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.

Is Taking Out a Loan a Smart Way to Get Out of Debt?

January 6th, 2015 at 10:43 pm

getting a loan, San Antonio bankruptcy attorneyNo one wants to be in serious debt, however, carrying some form of debt is unavoidable. To start, everyone needs to build credit, and one of the most effective ways to accomplish this is by taking on “good” amounts of debt and paying it off in a timely fashion.

While credit can be a luxury for some, for others—especially those in a low income bracket—credit becomes a way to help with bills, groceries, and other daily expenses. Unfortunately, even a small amount of debt can be a precursor to bankruptcy if a person falls on hard financial times.

The truth is that filing bankruptcy is a smart decision in many cases. However, there may be other ways to solve debt problems. One method that many people consider is consolidating debt by taking out a loan. This often is an effective strategy, but it is important to understand a few basic aspects about debt and loans.

Understanding What Taking Out a Loan Means

When the money from a loan comes in, paying off credit cards and other debt can feel like a giant weight has been lifted. With a zero balance and no creditor phone calls, one might even feel like they are out of the woods. It is important to understand, however, that the debt is still there and requires payment.

Start Putting Money Away, Know How Much You Owe, and Do Not Add to the Debt

It is important never to lose sight of how much debt you actually owe. An effective strategy is to write down the total amount of the debt while slowly saving enough money to meet each payment—or to pay it off entirely.

There are a lot of benefits to taking out a loan. According to BB&T, loans often have lower interest rates, and placing all of the debt into one area can really make a difference when it comes to focusing one’s own finances. By sticking to basic fiscal wisdom, a personal loan can be a tremendously beneficial means of taking control of debt.

If you need to speak with a Texas bankruptcy attorney, contact the Law Offices of Chance M. McGhee. Call us today for a free consultation at 210-342-3400.

Warning Signs of Financial Trouble

September 24th, 2014 at 7:30 am

Bankruptcy Financial TroubleAll of us struggle with finances at one time or another. However, for many people, that struggle may become overwhelming and feel as if it is never-ending. For those people, bankruptcy can often be the first step to gain control over their financial future.

There are certain signs that financial advisors point to as red flags that your debt has become unmanageable and bankruptcy should be considered. These signs include:

  • The balance of your credit card debt continues to increase, yet your monthly income is either staying the same or has decreased;
  • You pay only the minimum amount due on your credit cards. Some months, you pay even less than the minimum or completely miss the payment;
  • You have multiple credit cards and they all have balances on them;
  • When you receive an offer for a new credit card, you immediately apply;
  • You are using credit cards to pay credit card bills. If you have applied for a credit card, only to take cash advances in order to pay other credit card bills, that is a definite red flag to serious financial trouble;
  • You are close to or at the limit on most or all of your credit cards;
  • You are charging more each month on your cards than you are sending in for your monthly payment;
  • You are using your cards to purchase food, gas, utility bills and other life necessities;
  • Your credit cards are no longer used for ‘extras’ or for convenience sake. Instead, you are using them because you do not have any money;
  • The phone is ringing and letters piling up in your mailbox about your late bill payments;
  • You do not know the true amount of what your total credit card debt is, and you do not want to know.

If you recognize your situation in this list, then it may be time to consult with an experienced San Antonio bankruptcy attorney. Find out what your best options may be to help and get you back on the road to financial recovery.

Call today for a FREE Consultation

210-342-3400

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