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Will Bankruptcy Wipe Out All of My Personal Debts?

December 15th, 2020 at 1:25 pm

debtThe United States is a notoriously consumeristic society. Having good credit is a necessity to buy a home and a reliable vehicle. Credit must be built, often through the usage of credit cards and the ability to repay the credit card debt. Sometimes, however, we accumulate debt and get in too far over our heads. Other times, a major unforeseen life event occurs—one which we are unprepared to handle financially. When this happens, filing for bankruptcy may help struggling individuals and families. When considering bankruptcy, the first question on many minds is, “Will it get rid of all of my personal debts”?

Understanding Bankruptcy

Bankruptcy is a federally approved process through which an individual or a company can reduce their debt. Those who are authorized for the process may have debts written off or repaid under a new agreement. The method used depends directly on the type of bankruptcy approved. The most typical forms of the process are Chapter 11 for businesses or Chapter 7 or Chapter 13 for private consumers, although others are available under appropriate circumstances. These chapters refer to the specific section of the United States Bankruptcy Code that will apply in a given case. Meanwhile, while the process is underway, all collection activities related to your debts—including lawsuits and foreclosure proceedings must stop.

Will All Debts Be Cleared?

If you are wondering whether bankruptcy resets your credit, enabling you to begin as though the debt never occurred, the answer is “no.” Filing for bankruptcy allows those who meet eligibility requirements to rid themselves of some but not all debt. Financial obligations that do not typically qualify to be wiped clean are child support, alimony, taxes, student loans, and secured debt. Although they may not be totally discharged, some may be eligible for a restructured payment plan. Some of the most common discharged liabilities include:

  • Unsecured debt
  • Credit card balances
  • Income tax debt
  • Medical bills

Why Might You Choose Not to File Bankruptcy?

What prevents consumers from racking up unrepayable amounts on credit cards, filing for bankruptcy, and doing it again? It is illegal for employers to discriminate against those filing for bankruptcy, and many things, such as your house, could be exempt from being seized as you progress. However, possible disadvantages do exist, which may give cause you to look for bankruptcy alternatives. These potential drawbacks include:

  • Not all debts are eligible for discharge through bankruptcy.
  • Your circumstances will determine if your home or car must be sold to pay off your debts.
  • Depending on the type of bankruptcy, it can remain on your credit reports for up to ten years, preventing you from obtaining loans and causing increased interest rates.

A Texas Bankruptcy Attorney Can Help

You may know a relative or a friend who told you that filing for bankruptcy wiped away all of their stress and was the best decision they ever made. That is excellent news. However, it is not the right solution for every case. Your financial situation is as unique as your thumbprint, and it requires the assistance of a trained professional to analyze each detail and weigh the options. If you would like help determining if bankruptcy is the best solution for you and your family, contact an experienced San Antonio bankruptcy lawyer at the Law Offices of Chance M. McGhee. Call 210-342-6400 for a free consultation.

 

Source:

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

Bankruptcy and Debt Solutions: How Can I Find a Reputable Credit Counselor?

October 28th, 2020 at 9:03 pm

TX bankrupcy attorney, Texas debt lawyer, Whether you are planning on filing for bankruptcy or simply need assistance in developing a budget, credit counselors can provide you with the tools and resources you need. Unfortunately, not all credit counselors are created equal. In fact, some can leave you worse off than when you started, which makes finding an experienced, reputable credit counselor absolutely essential for your financial future. The following tips can help you find the one most suited for your needs and preferences and improve your chances of finding the financial empowerment you are looking for.

Know Why You Need a Credit Counselor

Each credit counseling agency and provider has an area in which they are best equipped to help their clients. With this in mind, it is critical that you first know why you need credit counseling. To find the answer, consider your goals and examine your current financial situation. If you are filing for bankruptcy, then you will also want to ensure you find a credit counselor that is approved by the United States Department of Justice since those who are not accredited will not be accepted by the courts.

Check and Verify Credentials and Qualifications

While credit counselors that are listed on the Department of Justice’s website most likely carry some of the highest levels of certification and meet some of the most stringent government standards, it is necessary that you check and verify the credentials and qualifications of all other credit counselors. The National Foundation for Credit Counseling and the Financial Counseling Association of America are both renowned agencies that ensure the quality of certified professionals, but the Council of Accreditation is also a reliable accreditation held by qualified credit counselors. You may also wish to check the agency’s rating with the Better Business Bureau to determine if they have any major complaints from other consumers.

Exercise Patience and Due Diligence

When you are dealing with debt issues, it can be easy to get in a rush. You want to finally be free, to feel like you are making some sort of progress, but this is not the time for impatience or hurried decisions. Many consumers spend weeks, months, or even years working with a credit counselor to fully resolve their debt. If you are not working with someone who has your best interests in mind, that can mean a significant amount of wasted time and money, and it could even hurt you in the long run. Take your time, be patient, and practice due diligence so that you can find a credit counselor that best suits your needs.

A Bexar County, TX Debt Management and Bankruptcy Lawyer Can Help

Whether you are looking to file for bankruptcy or need help finding an alternative path, the Law Offices of Chance M. McGhee can help. As a skilled consumer bankruptcy attorney, Attorney Chance McGhee has more than 25 years of experience in assisting consumers and small businesses with their debt and bankruptcy issues. Put your debt problems behind you. Call 210-342-3400 to schedule your free initial consultation with our knowledgeable San Antonio bankruptcy attorney today.

 

Sources:

https://www.nfcc.org/what-we-offer/bankruptcy-counseling/

https://fcaa.org/bankruptcy-counseling/

https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111

Does Filing for Bankruptcy Damage Credit?

August 12th, 2020 at 2:07 pm

TX bankruptcy attorney, Texas chapter 7 lawyerYou have likely seen TV commercials about the numerous credit cards available or regarding where you can go to calculate your credit score. These shiny advertisements can leave many young adults applying for credit cards without knowing the impact that this can have on their spending habits. Receiving your first colorful card in the mail can quickly lead to two or three more, each with their own amount of debt steadily piling up. While these bills may seem harmless as a young, single college graduate, the debt enclosed with these credit cards can burden you for years to come. As the debt continues to increase, you may be wondering where you can turn for help. Bankruptcy is a valid option; however, its negative impact on credit scores can have most people seeking out financial alternatives first.

Sell Some Assets

The best way to get rid of debt? Pay it off. If you have any assets that you can spare, the money that you can gain from selling these valuables can help alleviate you from the lump sum sitting on your credit cards. Take to digital marketplaces, such as eBay or Craigslist, if you have any jewelry, furniture, or electronics that you are willing to part with. If you have multiple TVs, laptops, antique furniture that you have tucked away in storage, or an old necklace that you never wear, it may be best to see how much money you can earn by selling them to a new owner.

Speak with Your Creditors

Have you tried explaining your situation to your credit card company? While they hear situations like yours on a daily basis, they may be willing to extend your debt payment’s due date or build a payment plan that better aligns with your monthly income. Although it may be difficult to do, you should explain to your creditors that you are going through a financial hardship and are doing your best to avoid filing for bankruptcy. They may be able to lower your monthly payment or decrease your interest rate.

Consider Consumer Credit Counseling

If your creditors refuse to work with you, enlist someone who has a little more experience in the field. Consumer credit counselors work to negotiate with creditors. One of their jobs is to help debtors obtain a reduced interest rate or monthly payment. They will also assist their clients in creating a monthly budget to help them stay on track with their amount owed. Working with a consumer credit counselor may still negatively impact your credit score.

Speak with a San Antonio Bankruptcy Lawyer

Filing for bankruptcy is never the path that anyone wishes to take, but unfortunately, some people run out of alternatives. If you have attempted to pay off your debts using the tactics described above, it may be time to work with a reputable bankruptcy attorney. The Law Offices of Chance M. McGhee works to help their clients overcome their financial difficulties. With over 20 years of experience, Attorney McGhee takes the time to discuss the implications of bankruptcy and any valid alternatives before moving forward with the bankruptcy process. If you are unsure about how to proceed, contact our New Braunfels bankruptcy attorney at 210-342-3400 to discuss your situation in your free consultation.

 

Source:

https://www.thebalance.com/six-ways-to-avoid-bankruptcy-960626

Can You Incur More Debt During a Chapter 13 Repayment Plan?

December 27th, 2019 at 12:38 am

debtIf you have gotten a bankruptcy, the one thing you do not want to do is to incur more debt; being unable to pay your debt is the reason you filed for bankruptcy, right? Chapter 13 bankruptcy repayment plans usually last anywhere from three to five years, meaning you must be financially responsible during that time period or you could risk having your case dismissed and being responsible for repaying your debts in full. While it is a good rule of thumb to avoid taking on any further debts during a Chapter 13 bankruptcy, sometimes taking on more debt is unavoidable and is a necessity. Incurring new debt during your Chapter 13 repayment period is possible, but there is a certain way you must go about it.

Reasons for Incurring New Debt

Sometimes, life can be unpredictable. Even though you were probably not planning on taking on any new debts during your Chapter 13 repayment period, things can happen and can put you in a situation where there is no other option. Generally, incurring new debt during a Chapter 13 repayment period is frowned upon and is only permitted when the debt is for something that is considered a necessity. Common reasons for incurring debt during a repayment plan include:

  • Refinancing a mortgage on your current home
  • Purchasing a new home or a new vehicle
  • Financing equipment needed for necessities, such as a new water heater or furnace

Filing a Motion to Incur Debt

Before you take on any new debt, you must speak with your bankruptcy trustee about filing a motion to incur debt. If you were to take on new debt without notifying the court or your trustee, you could risk having your bankruptcy case dismissed, leaving you in an arguably worse financial situation than before. To file a motion to incur debt with the court, you will need to provide the following information:

  • Proof of income for at least the past 60 days
  • An updated list of your monthly expenses
  • Information about the loan and the financing company, including how much the loan is for, the interest rate of the loan, the length of the repayment period and how much the estimated monthly payment would be

The court will examine your motion and make a determination on whether or not the debt is necessary, whether or not you will be financially able to make the monthly payments and whether or not the new debt will interfere with your ongoing bankruptcy repayment plan.

Contact a San Antonio, TX Chapter 13 Bankruptcy Attorney For Assistance

Making the decision to file for bankruptcy can be a difficult one, but it can ultimately end up being the best financial decision you make for yourself. If you are currently in a Chapter 13 repayment plan, you likely know that there are limitations to what you can do with your money. If you need to incur debt during your repayment period, you need help from a Schertz, TX Chapter 13 bankruptcy lawyer. At the Law Offices of Chance M. McGhee, we can help you correctly file a motion with the bankruptcy court to allow you to take on more debt during your repayment period. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.carsdirect.com/auto-loans/what-s-an-authorization-to-incur-debt-with-a-chapter-13

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics

 

Types of Debt in Chapter 13 Bankruptcies

February 8th, 2019 at 11:01 pm

TX bankruptcy lawyerThere is more than one type of bankruptcy, although Chapter 7 and Chapter 13 bankruptcies are the most common. In a Chapter 13 bankruptcy, your attorney and a team of other professionals are able to help you develop a repayment plan to pay back your debts. The repayment plan lasts for three to five years, depending on a variety of circumstances. Chapter 13 bankruptcies can be beneficial to individuals because it allows you to keep certain assets, such as your vehicle or your home. In a Chapter 13 bankruptcy, certain debts must be repaid before other debts.

Priority Debts

Priority debts are exactly what they sound like — priority over other debts. These debts must be included in any repayment plan you enter and the plan must make sure that your priority debts are paid off first and in full. Typically priority debts include:

  • Past-due child support;
  • Past-due spousal support;
  • Unpaid taxes; or
  • Unpaid wages that you owe employees within the past six months.

Secured Debts

Debts that can be secured by certain property are called secured debts. These types of debts are called secured debts because they can be attached to specific property. If you fail to repay the debts as agreed, the creditor can take back the property. The most common examples of secured debts include:

  • Home loans or mortgages; or
  • Car loans.

Unsecured Debts

Unsecured debts are basically all other debts that you may have. Unsecured debt has no property that can be attached to it, so there is nothing that the creditor can repossess if you do not pay. Common examples of unsecured debt include:

  • Medical bills;
  • Credit card debt;
  • Personal loans;
  • Utility bills; and
  • Business loans.

A Texas Chapter 13 Bankruptcy Attorney Can Help

United States bankruptcy law is extremely complex and is best handled by a professional. At the Law Offices of Chance M. McGhee, we have dealt with over 20 years worth of bankruptcy cases and we know the ins and outs of the bankruptcy process. Our skilled New Braunfels Chapter 13 bankruptcy lawyer can help you sort out your finances and come up with a repayment plan that works for you. To get started reviewing your case, call our office at 210-342-3400 to schedule a free consultation.

 

Source:

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics

 

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

 

How Bankruptcy Can Be the Start of a More Secure Financial Life

October 27th, 2014 at 9:46 am

bankruptcy solutions in Texas, San Antonio bankruptcy attorneyLet us redefine the popular yet misguided perspective of bankruptcy. First, here are the facts: Bankruptcy  may have a negative impact on a credit score and will stay on record for 10 years. Lenders will consider someone who recently went through bankruptcy as a risk and will be less likely to loan  money. According to Bankrate, it is even possible to see insurance rates rise. Due to these conceptions, many view bankruptcy as a stressful and that it is a difficult way out of debt. But, this does not have to be true.

Bankruptcy is an opportunity—even a tool—that grants debt relief while teaching some valuable financial lessons. There are a variety of reasons why one might consider bankruptcy, and the best chapter to file depends on the circumstances surrounding the debt.

What You May Learn While Going Through Bankruptcy

Different forms, or chapters, of bankruptcy offer different solutions to getting out of debt. What they all have in common, however, is a direct lesson in financial security—both literally and figuratively.

First, applicants for bankruptcy must go through some basic monetary schooling before completing the process. This includes credit counseling, as well as debtor education, which offers lessons, advice and tips for maintaining finances.

Living After Bankruptcy

After going through the process of bankruptcy, the real work is only half complete. Filers may need to commit to a lifestyle that incorporates less spending and fewer luxuries. Learning to live off of income is one of the first steps in this journey. For those with limited income, the transition can be quite difficult.

Establishing credit is another concern for those who have recently declared bankruptcy. For the most part, a secure line of credit is the first way to start. By making responsible purchases and paying them off on time, it is possible to move on to a regular, unsecured credit card with relatively low amounts of interest.

Bankruptcy offers the opportunity for debtors to attain financial stability. If you feel that declaring bankruptcy is the solution for you, having a San Antonio, Texas bankruptcy lawyer with you every step of the way can be beneficial. For the past 20 years, the Law Offices of Chance M. McGhee have helped clients break down their financial hurdles. Contact us today at 210-342-3400 for a free consultation.

Property Exemptions for Bankruptcy in Texas

March 17th, 2014 at 12:12 pm

bankruptcy exemptions, Texas, federal exemptions, Texas bankruptcy exemptions, types of bankruptcy, debtLosing your job or getting expensive medical bills can have devastating effects on your budget.  Without ample savings, it can be hard to make monthly payments, and eventually you may lose your car or even your home.

However, bankruptcy can stop foreclosure, repossession and wage garnishment through selling property or reorganizing existing debts if you are earning income. However, filing for bankruptcy does not mean losing all your worldly possessions. When filing your paperwork, you may choose to use either federal exemptions or the exemptions set out by the statutes of Texas.

Both the Federal and State exemptions allow the debtor to protect equity in their primary residence. This is called the Homestead Exemption and it does not provide any protection to rental or investment properties. Under the federal exemption, you can shield up to $22,975 of equity from a bankruptcy trustee. The homestead exemption in Texas is not limited by the amount of equity in the home, but the size and location of the property. It cannot exceed an acre if it is located in a populated city, village or town.  In rural areas, the exemption can be as large as 100 acres.

Personal property, other than real estate, also has exemptions that protect it during bankruptcy based on the kinds of property. For example, up to $3,450 can be exempted for a motor vehicle under Federal exceptions.

The exemptions in Texas allow for each driver in a household to use.  But the total allowance for all types of property in Texas is mere $30,000 and double for a family. In that case it is important to have a clear idea of how you can use the most of your exemptions to cover home furniture, food, clothing, and other important supplies.

There are other exemptions that should be reviewed while filing for bankruptcy, such as, wages, pensions, insurance.  Contact an experienced bankruptcy in San Antonio today who can help you determine the best step for your finances if bankruptcy is in your future.

2014 is the Year to Get Rid of Debt

January 28th, 2014 at 5:58 pm

Since the ball dropped on New Year’s Day, people have been trying to keep their resolutions. Whether that is quitting smoking, losing weight, or just improving quality of life, keeping up with resolutions can be a challenge. Another common resolution is to get out of debt, and 2014 could be the year for it.

eliminate debt IMAGEThe first step to tackling debt is to list all outstanding balances. Include everything that you might owe for your mortgage, student loans, auto loans, credit card bills, or other bills. It is also important to include the interest rates on these bills so that the most expensive debts are dealt with first.

The next step is to track your spending. Using a year’s worth of bank statements and credit card statements, find out what you spend each month. This will let you see which expenses are necessary and which are not. Use this as a starting point in creating a budget that you can live with, and stick to it. That will allow you to trim any wasteful spending and reallocate those funds to getting rid of debt quickly.

While fun activities may be difficult to cut out, they should be the last thing to budget for. Remember that credit cards are not free money, you will have to pay them off and you will be charged interest on any outstanding balance every month. Celebrate your success when you reach milestones so that you will stay motivated to see your plan to the end.

If you have tried all these steps and still cannot get ahead, then it is time for plan B. Maybe you have lost your job, or experienced an expensive illness or injury, or other unexpected event that makes it difficult to get out of debt. Filing for bankruptcy can let you start over financially. Contact an experienced bankruptcy attorney in San Antonio to review your finances today and make this year the one where you get out of debt.

Knowing Your Rights with Debt Collectors

January 6th, 2014 at 9:00 am

texas bankruptcy lawyerMaybe you are waiting to contact a bankruptcy attorney because you think that the collection calls will stop. Maybe you are feeling overwhelmed and embarrassed by the situation. Rest assured that bankruptcy can happen to anyone and that you should not be afraid to reach out for help. One financial setback like the loss of a job or a serious accident can affect your finances dramatically. Once those phone calls start coming in, however, it can raise some questions about what creditors are and aren’t allowed to do or say when they are contacting you about a debt.

In Texas, your rights are protected under the Texas Debt Collection Act. This law outlines how and when creditors can contact you, but it is also stipulates what is illegal. This law is attempting to cut down on the abusive, unfair, or fraudulent debt collection attempts that have made life frustrating for individuals throughout Texas.

A debt collector cannot try to collect more than the amount that was agreed on, even if the agreement was not in writing. The only way that a debt can be increased is through attorney fees, service fees, collection fees, or investigative fees if these are within a written contract. If you receive notice that a debt collector is coming after you and you dispute the debt, you must do so in writing.

If the debt is legitimate, sometimes debt collectors might engage in abusive behavior in an attempt to threaten you into paying. They are forbidden from threatening violence, making repeated calls anonymously, using obscene language, threatening arrest, or falsely accusing the debtor of fraud or any other crime.

You can make the collection calls stop if you are ready to move forward with your bankruptcy. Whether you have tried in good faith to keep up with the payments or you are just unable to make the payments, bankruptcy can stop your collection calls and get you back on the right financial track. Contact a Texas bankruptcy attorney today for more information.

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210-342-3400

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