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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

How Will a Bankruptcy Affect My Credit Score?

February 22nd, 2019 at 3:47 pm

TX bankrtupcy lawyerOne of the biggest worries people have when they go to file for bankruptcy is what that will mean for their credit score. There is a lot of confusion surrounding bankruptcies and how they affect your credit. While it is true that they do negatively impact your credit score, it is not nearly as bad as some have let people believe. There is no one answer to how your bankruptcy will affect your credit score. It is a combination of what your credit score was before your bankruptcy and what appears on your credit report. Each situation is different and it is nearly impossible to say how a bankruptcy will affect your credit score.

Effects on Your Credit Score

While there is no simple way to tell how a bankruptcy will affect your credit score, FICO, one of the nation’s leading credit reporting bureaus, has released information on how bankruptcy and other credit mistakes could affect your score. According to FICO, those with higher credit scores before bankruptcy typically lose more points after a bankruptcy, while those with lower credit scores lose fewer points. Despite the difference in the number of points that the score drops, both people with high and low credit scores will have credit scores that end up in the same vicinity.

How Long Bankruptcies Stay on Your Credit Report

Much of the impact bankruptcy has on your credit score is determined by how long it will be on your credit report. The length of time in which the bankruptcy will be on your credit report varies depending on the type of bankruptcy you file. For example, a Chapter 13 bankruptcy will appear on your credit report for up to seven years and your discharged debts will also stay on your report for up to seven years after they are discharged. In a Chapter 7 bankruptcy, the bankruptcy will appear on your report for up to 10 years, though the discharged debts will drop off the report after about seven years.

Worried About Your Credit Score? Contact a New Braunfels, TX Bankruptcy Attorney

For most people bankruptcy is (and should be) a last resort. If you have tried other debt and credit counseling options and nothing has changed, then you may need to talk to a skilled Boerne bankruptcy lawyer. At the Law Offices of Chance M. McGhee, we have extensive knowledge of U.S. bankruptcy law and we also have more than 20 years of experience with helping clients get a clean slate. We can walk you through the bankruptcy process from start to finish and we can help you set yourself up for success after your bankruptcy is completed. Contact our office today by calling 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.moneycrashers.com/bankruptcy-affect-credit-score/

https://www.thebalance.com/how-much-will-bankruptcy-hurt-your-credit-score-960061

What Life Is Really Like After a Texas Bankruptcy

December 21st, 2018 at 6:36 pm

TX bankruptcy lawyer, TX chapter 7 attorney, Coming to the decision that a bankruptcy is your best option was probably not an easy journey. Bankruptcies still tend to have a negative stigma in today’s world, but for some people, it’s the best thing they could have done for themselves. Most people know what goes on when you are filing for bankruptcy and what that means, but what happens after a bankruptcy is often lost in the shuffle. Many people have their ideas of what life after bankruptcy is like, but those ideas are often muddled with unrealistic expectations. What really happens after a bankruptcy can change depending on your situation, but ultimately, your actions have a lot to do with it.

You Might Have to Change Your Lifestyle

The type of bankruptcy that you file for will have a lot of bearing on your lifestyle after you have completed your bankruptcy. In a Chapter 13 bankruptcy, you will be required to pay some or all of your debts with a repayment plan over three or five years. This means that you will have less expendable income and will have to devote more of your money to pay off debt. If you filed for a Chapter 7 bankruptcy, the majority of your debts will be forgiven, but that does not mean you can take up a frivolous lifestyle. You should be wary of spending too much money on unneeded items at your bankruptcy, no matter the kind.

You Will Probably Have a Hard Time Getting Credit or Loans

To lenders, a bankruptcy signals that they might not get their money back if they lend it to you. After you have gone through a bankruptcy, you will most likely be seen as a high-risk borrower, meaning that many banks and lenders will not even consider loaning money to you. The lenders who do consider allowing you to borrow money will often charge you very high-interest rates in order to make up for the high-risk factor.

You Should Start to Build a Savings Account

Opening and maintaining a savings account is an easy way to begin making your financial picture a healthier one. Even just putting away $5 or $10 a week can make a difference, especially if you have not had a savings account before. Having a little bit of money set aside for emergencies is always a good idea.

Our Boerne Bankruptcy Attorney Can Help Set You Up for Success

Many people come into bankruptcy expecting things to be a certain way after everything is said and done. Like many things, life after bankruptcy is not always what it seems. At the Law Offices of Chance M. McGhee, we can help guide you throughout your bankruptcy process. Our experienced New Braunfels bankruptcy lawyers will make sure the decisions you are making are in your best interest and beneficial fpr you. To schedule a free consultation, call our office today at 210-342-3400.

 

Sources:

https://www.bankrate.com/finance/debt/life-after-bankruptcy-1.aspx

https://www.investopedia.com/articles/pf/07/after-bankruptcy.asp

Signs Filing For Bankruptcy Might Be Your Best Option

December 7th, 2018 at 12:05 am

Texas bankruptcy attorneyIn today’s society, bankruptcy still has a stigma surrounding it. Many people think that if they file for bankruptcy they are failures or irresponsible for having to resort to such tactics. In reality, all kinds of people file for bankruptcy – rich and poor alike – for reasons beyond their control. Filing for bankruptcy can be a life-changing decision, which is why it should not be taken lightly. It is always a better choice to repay your debts than filing for bankruptcy, but for many people, their best option is to file for bankruptcy and start a clean slate. Making the decision to file for bankruptcy can be difficult, which is why we have compiled a list of three signs that filing for bankruptcy might be in your best interest.

You Have Already Tried Negotiating

If you have a lot of debt, one of the things you can do is contact your creditors to try to negotiate out a repayment plan that works for you. If you have already tried to do this and your creditors are not willing to work with you, then you do not have many other choices but filing for bankruptcy.

You Have Looked Into Consolidating Your Debts

If you have debt, especially credit card debt, another option is to refinance or consolidate your debt. This means that you will take out a personal loan to cover the costs of your credit card debts, and rather than paying back the individual credit cards, you will be making one monthly payment to your loan provider. This is often beneficial because the loan interest rate is often much lower than your credit card interest rates. If you have tried to consolidate your debt but you still have credit card debt, you might need to consider bankruptcy.

Your Liabilities Are Much Greater Than Your Assets

One of the major reasons people file for bankruptcy is because they simply do not have enough money to pay their debts. For example, if you owe $3,400 a month in debts and you only make $3,000 a month, you do not have much of a choice. If your liabilities greatly outweigh your assets like this, you may need to consider a bankruptcy.

A New Braunfels Bankruptcy Attorney Can Help You Make the Decision

Deciding that you would be better off filing for bankruptcy is a serious and life-changing decision. Filing for bankruptcy does not come without its challenges and you will have to be OK with the fact that you will have to deal with these challenges for a couple of years. If you feel like you are drowning in debt and you are not sure which way to turn, you should contact a Boerne bankruptcy lawyer to help you make a decision. At the Law Offices of Chance M. McGhee, we help people make the decision to file bankruptcy every day. We know the bankruptcy process inside and out and can help you prepare for what is to come when you file. Contact our office at 210-342-3400 to set up a free consultation.

 

Sources:

https://www.investopedia.com/articles/pf/08/bankruptcy-filing.asp

https://www.thesimpledollar.com/when-does-it-make-sense-to-file-for-bankruptcy/

https://www.thebalance.com/should-you-file-bankruptcy-960627

Which Bankruptcy Option Eliminates All Debt?

September 30th, 2018 at 5:39 pm

debtOne enticing benefit to filing for bankruptcy is the ability to discharge debts, enabling a fresh financial start. The United States bankruptcy code was created to allow honest debtors to free themselves from insurmountable debt; however there are various limitations. Unfortunately, these limitations restrict which debts become eliminated, reduced, or remain the same. Therefore, regardless of whether you file for Chapter 7 or Chapter 13 bankruptcy, some outstanding debts are untouchable.

Which Debts Are Eliminated?

Which debts discharge relies heavily on the type of bankruptcy filed by the consumer. Chapter 13 bankruptcy does not eliminate any debt initially, yet restructures the current sums into an affordable repayment plan. This repayment plan typically lasts three to five years, at the end of which any eligible debts are discharged. When you file for Chapter 7 bankruptcy, any unsecured loans become eliminated immediately. In some instances, unsecured debts make up all of the financial burdens. These debts include:

  • Credit card debt;
  • Personal loans;
  • Medical bills;
  • Payday loans;
  • Older tax debts;
  • Utility bills; and
  • Second mortgages.

Secured Debts Are Non-dischargeable

Chapter 7 bankruptcy does provide significant relief regarding secured, non-dischargeable debts, aside from freeing up a portion of the budget to make regular payments. Alternatively, Chapter 13 includes all financial liabilities in the repayment plan, including secured loans. Non-dischargeable debts include:

  • Taxes within the last three years;
  • Child support payments;
  • Alimony or spousal support obligations;
  • Student loans;
  • Traffic ticket fines;
  • Criminal restitution; and
  • Secured debt on a home or car you plan to keep.

Contact an Attorney

These guidelines are general statements intended to help you determine if bankruptcy may help your situation. Each consumer bankruptcy case depends on a variety of individual factors. Therefore, if you think bankruptcy is right for you, you should discuss your unique circumstances with a proven Boerne bankruptcy attorney. Contact the Law Offices of Chance M. McGhee for a free case review today by calling 210-342-3400. Our experienced team will assess the details of your case and provide honest feedback about the best course of action for your financial future.

 

Sources:

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

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

 

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/

 

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210-342-3400

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