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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

 

When Should I Delay Filing for Bankruptcy?

October 31st, 2019 at 7:14 pm

bankruptcyDeclaring bankruptcy can get you out of a less-than-favorable financial situation when you are in need, but your circumstances will dictate which type of bankruptcy you are eligible for and how much the bankruptcy will help you. Once you have figured out that you want to file for bankruptcy, you must then determine when your most opportune time to file is. In certain situations, you may want to delay filing for bankruptcy. Delaying your bankruptcy can sometimes allow you to keep more of your money, protect a friend or family member’s money or even increase your chances of qualifying for a Chapter 7 bankruptcy. Here are a few situations in which you may want to consider delaying filing for bankruptcy.

You Paid Money Owed to a Family Member Too Close to Filing

If you pay certain creditors $600 or more prior to receiving a discharge, your bankruptcy trustee could demand the money back from the creditor. This is called a preference because you have put that creditor in a better position than your other creditors. The preference period for most creditors is 90 days prior to filing for bankruptcy. For “insiders,” such as friends or family members, the preference period is one year prior to filing for bankruptcy.

You Recently Transferred or Gifted Money or Property to Someone

If you give away or gift property or money and get nothing in return, you could also face allegations of fraudulent transfer. Even if the property or money was a gift given with good intentions, you can still face these allegations if you file for bankruptcy less than two years after you give or transfer the property or money.

Your Income Has Decreased or You Expect Your Income to Decrease

If you want to file for a Chapter 7 bankruptcy, you will have to pass what is called the means test. The means test compares your income to the median income in your state. If you fail the means test, it will be extremely difficult for you to qualify for a Chapter 7 bankruptcy, if you can even qualify at all. If you know that you currently make too much to qualify, but that you will not be making as much in the future, you should wait to file for bankruptcy.

Our New Braunfels, TX Bankruptcy Attorney Can Advise You When to File

Like many things in life, timing is everything when it comes to bankruptcy. Even just a few days’ time can mean the difference between discharging certain debts and being forced to repay them. If you are unsure of when the best time to file for bankruptcy is, you should contact our skilled San Antonio, TX bankruptcy lawyer today. At the Law Offices of Chance M. McGhee, we will examine your case and advise you as to when you should file for bankruptcy so you can benefit from it the most. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.thebalance.com/what-is-chapter-7-bankruptcy-316202

https://www.law.cornell.edu/uscode/text/11/547

https://www.law.cornell.edu/uscode/text/11/548

What Are the Laws for Filing Multiple Bankruptcies?

October 17th, 2019 at 3:27 pm

TX bankrutpcy lawyer, TX chapter 7 attorney, Texas bankrutpcy lawyer, Most Americans have some sort of debt, with one of the most common forms of debt being credit card debt. Most of the time, debt is manageable if you are able to budget your money, but sometimes life happens and debt can become overwhelming. In cases such as those, bankruptcy is often your best option. Filing for bankruptcy can allow you to manage your debt in affordable payments or even discharge your debt, allowing you to wipe your slate clean.

Unfortunately, sometimes your first bankruptcy is not your last bankruptcy. If you find yourself drowning in unmanageable debt again, you may wonder if it is possible to file for bankruptcy again. Technically, the answer is yes, but there are a few stipulations you should know about.

Filing for Bankruptcy More Than Once

You can file for bankruptcy as many times as you want to file. There are no rules about how many times you can file for bankruptcy, but there are rules as to how often you can receive a discharge of your debs. The time between discharges is based on the type of bankruptcy you filed before, whether or not you received a discharge in that bankruptcy and the type of bankruptcy you are trying to file. The waiting periods between bankruptcy discharges are as follows:

  • Chapter 7 to Chapter 7: You can receive a discharge after eight years.
  • Chapter 7 to Chapter 13: You can receive a discharge after four years.
  • Chapter 13 to Chapter 13: You can receive a discharge after two years.
  • Chapter 13 to Chapter 7: You can receive a discharge after six years.

It is worth it to note that if you previously filed for a Chapter 13 bankruptcy and are currently trying to file for a Chapter 7 bankruptcy, you may be able to obtain a discharge sooner if you paid back your debtors in full or you paid at least 70 percent of your debt back and your new bankruptcy filing is in good faith.

Do You Have Questions About Bankruptcy? A San Antonio, TX Bankruptcy Attorney Can Help

Nobody files for bankruptcy with the intention of filing for bankruptcy more than once in their lifetime, but sometimes life happens and you have no other choice. If you have previously filed for bankruptcy and you think you might want to file again, you should talk with a knowledgeable New Braunfels, TX bankruptcy lawyer. At the Law Offices of Chance M. McGhee, we understand that sometimes the only option for debt relief is a bankruptcy, even if you have filed for bankruptcy before. Let us help you determine if filing for bankruptcy is your best option. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://upsolve.org/learn/how-often-can-you-file-bankruptcy/

https://www.thebalance.com/if-i-filed-bankruptcy-before-how-soon-can-i-file-again-316173

What Not to Do Before Filing for a Texas Bankruptcy

April 26th, 2019 at 2:38 pm

Texas bankruptcy attorneyFor many people who have quite a bit of debt, bankruptcy is the best option. There are two types of bankruptcies that individuals can file for in the United States — Chapter 7 and Chapter 13 bankruptcies. A Chapter 7 bankruptcy is one that discharges most of your debt and leaves you with a blank slate so you can rebuild your finances. A Chapter 13 bankruptcy is basically a reorganization of your debts — you work with your debtors to come up with a repayment plan that works for you. In either of these scenarios, there are certain things that are big no-no’s. It is important that you avoid these common mistakes when filing for a Texas bankruptcy:

Lying or Withholding Information from Your Attorney

Though it may seem beneficial to lie or hide certain assets from your attorney, it is quite the opposite. It is against the law to attempt to hide assets or omit them from your list of assets that you submit to the bankruptcy court. Not only could your bankruptcy case be rejected, but you can also face criminal charges related to bankruptcy fraud.

Acquiring New Debt After You Have Started the Process

In a Chapter 7 bankruptcy, most if not all of your debts are discharged. It may be tempting to take your credit card and go on a shopping spree before you file for bankruptcy, but that is the last thing you should do. Incurring new debt within 90 days of filing for bankruptcy is highly frowned upon and will most likely not be dischargeable in your bankruptcy, meaning you will be responsible for repaying that debt.

Giving Money or Property to Your Friends or Family

Similar to lying about your assets, it is also not a good idea to try to give money or other property to your friends or family before you file for bankruptcy. This is also illegal and can put your bankruptcy case in jeopardy, along with possible criminal charges and repercussions.

Not Hiring a Skilled New Braunfels, TX Bankruptcy Lawyer

The bankruptcy process can be overwhelming for many people — there is a lot of paperwork that must be filed and there are many legalities that must be followed. At the Law Offices of Chance M. McGhee, we take the confusion out of bankruptcy and help you avoid making these costly mistakes. Let our knowledgeable Kerrville, TX bankruptcy attorneys guide you throughout the bankruptcy process and lead you on a path to financial wellbeing. Call our office today at 210-342-3400 to set up a free consultation.

 

Sources:

https://www.allbusiness.com/13-mistakes-avoid-filing-chapter-13-bankruptcy-12340-1.html

https://www.myhorizontoday.com/bankruptcy101/five-common-mistakes-debtors-make-when-filing-bankruptcy/

https://www.debt.org/blog/what-not-to-do-before-filing-bankruptcy/

Things You Should Know Before You File for Bankruptcy

March 29th, 2019 at 4:18 pm

bankruptcy-filingMost Americans have some form of debt — mortgages, credit card debt, student loans, auto loans, and personal loans are all part of consumer debt and most Americans have a combination of them. For many people, the debt can be handled through smart budgeting and curbed spending, but some people need to use other measures. Bankruptcy is used when people can no longer pay their debt and offers a way for those in debt to get a fresh start. The decision to file for bankruptcy is a difficult one, especially since bankruptcy laws are so complex. Here are a few things you should know before you file for bankruptcy:

There Is More Than One Kind of Bankruptcy

For individuals, there are two different types of bankruptcies — Chapter 7 and Chapter 13. A Chapter 7 bankruptcy is the type that most people associate the word bankruptcy with. In Chapter 7 bankruptcy, most of your unsecured debts can be discharged, meaning you will no longer be responsible for paying them back. In a Chapter 13 bankruptcy, you set up a repayment plan that allows you to repay your debts over three to five years. The kind you choose largely depends on your specific circumstances.

Bankruptcy Is Not Free

Though it may seem counterintuitive, filing for bankruptcy is not free. It can actually become quite expensive. Filing for bankruptcy can cost between a couple of hundred to a couple of thousands of dollars, depending on whether or not you hire an attorney and how much the filing fees end up costing.

Your Credit Will Be Affected

 

Once you have filed for bankruptcy and your case is finished, you will have to begin the process of rebuilding your credit. Getting a bankruptcy does make your credit score drop, but it does not really matter whether or not you go into the bankruptcy with a high or a low credit score. Most people end up around the same score range after they are done with bankruptcies.

A Kerrville, TX Bankruptcy Attorney Can Help

It can be difficult to make the decision to file for bankruptcy. Some people feel like bankruptcy is a failure, but in reality, it can be the best decision some people make. If you are thinking that bankruptcy may be right for you, you need to talk to an experienced New Braunfels, TX bankruptcy lawyer. Understanding what you are getting yourself into before you file for bankruptcy is crucial, which is why the Law Offices of Chance M. McGhee are here. We can help you figure out which type of bankruptcy is right for you and the most strategic plan to benefit you. Call our office today at 210-342-3400 to schedule a free consultation.

 

Sources:

https://www.thesimpledollar.com/what-to-expect-when-filing-for-bankruptcy/

https://www.thebalance.com/top-things-to-know-about-bankruptcy-316198

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

https://www.forbes.com/sites/larrymyler/2017/10/03/filing-for-bankruptcy-3-most-important-things-you-need-to-know/#611876127fe6

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

Debunking the Three Biggest Bankruptcy Fears

October 26th, 2018 at 8:25 pm

TX bankruptcy attorneyNearly 800,000 Americans file for bankruptcy each year, while millions more struggle with the decision filing. Often, those weighing the decision to file are doing so under the pressure of constant collection calls, the stress of impending foreclosure or repossession, and without all of the information necessary to make an informed decision. Let us help alleviate some of those fears:

Concern 1: My credit will be ruined.

While it is true that you will experience a decline in your credit score initially, also consider the impact late payments have on your credit score. While it may not be an immediate dramatic decline, the slow loss of credit from delinquency can be more harmful than bankruptcy.

As far as being able to apply for a credit card, a mortgage, or a car loan, all of these options will be available to you much sooner than you may anticipate. Many creditors are willing to offer you a credit card as soon as you complete your filing since they know you will be unable to file for bankruptcy again for an extended length of time. Furthermore, borrowers begin qualifying for new mortgages as soon as one year after the completion of a bankruptcy filing.

Concern 2: I will lose everything.

The thought of being homeless and without transportation often scares many families into coping with the onslaught of collection attempts. In reality, only 2% of debtors must turn over their personal property and real estate equity. According to the Texas homestead exemption, as long as you have lived in your home for 40 months or more, you will not lose your home, regardless of how much equity you have in it. If you live in a suburban area, you can keep up to ten acres of land, or if you are in a rural area, you can keep up to 200 acres per family or 100 acres for individual bankruptcy.

Concern 3: Everyone I know will find out I filed for bankruptcy.

We often hear of bankruptcy on the news, but rarely is it anyone we know intimately. While bankruptcy is a matter of public records, the only time it will potentially make headlines is if you have a high profile case. Many newspapers choose not to publish bankruptcy records now to save on publication costs.

A New Braunfels Bankruptcy Attorney Can Help

If you are one of the millions of Americans struggling to make ends meet, a Kerrville, TX bankruptcy attorney will help answer any questions you may have. Attorney Chance M. McGhee has over 20 years of experience with assisting clients to overcome the financial crisis. Call our office at 210-342-3400 to find out how we can help in a free initial consultation.

 

Source:

https://www.thebalance.com/the-three-biggest-bankruptcy-fears-316359

Reversing Real Estate Judgment Liens with Bankruptcy

April 26th, 2018 at 11:40 pm

Texas bankruptcy attorneyCreditors know how to work the system to get the money owed to them. In some cases, creditors have the courts put a lien on debtor’s possessions without the owner’s consent or knowledge, granting the creditor a legal claim over the property. By placing a lien on real estate, a vehicle, or personal property, a creditor secures payment of the money owed, sooner or later.

Buyers will not purchase items without a clear title, and a lien makes any title unclear. Although a creditor has the option to sell the property, such as in foreclosure, most wait until the debtor chooses to sell the property. At that point, seller pays the debt out-of-pocket or uses part of the purchase price to repay the debt. Fortunately, in Chapter 7 bankruptcy, you may be able to avoid the whole ordeal by getting rid of the judgment lien altogether.

Consensual Versus Non-Consensual Liens

Liens are placed on property both with and without consent. If consent is given, it happens at the origination of the creditor-debtor relationship. For example, either the debtor is asking for money to purchase property, such as a home or a vehicle, where the bank would then own the property, and the purchaser makes payments to the financial institution; or the debtor is asking for a financial loan and offers property they already own as collateral.

Alternatively, if someone wins a judgment against another party in court and money is owed, a judge may grant a judgment lien, which frequently happens with unpaid debt. This is an example of a non-consensual lien.

Lien Avoidance

Through judgment lien avoidance, you can permanently remove a judgment lien. If this occurs during bankruptcy, you will own the property, free-and-clear with no other payments. Lien avoidance is recommended, if possible, even if you do not intend to keep the property long-term, as you can then sell the property to pay for other things. To qualify, the following must be true:

  • The lien is a court-issued money judgment;
  • There is exempt equity in part of the property; and
  • Property loss impairs the exemption.

Reduce Courtroom Surprises

Many filers do not realize they have any liens on their property. Others discover partial claims. Sometimes, debtors do not have equity during the bankruptcy filing, but that changes down the road. In all of these circumstances, a New Braunfels, TX bankruptcy attorney can help. If there is a lien on your property and you have little, no, or even negative equity, the Law Offices of Chance M. McGhee will explore all of your options. Call us today for your free, no-obligation consultation at 210-342-3400.

 

Sources:

https://study.com/academy/lesson/types-of-liens-equitable-possessable-statutory.html

http://www.landlordstation.com/blog/what-is-a-judgment-lien/

Questions to Ask Yourself before Filing for Bankruptcy

July 24th, 2015 at 10:37 am

Texas chapter 7 lawyer, Texas bankruptcy attorney, Texas chapter 13 attorney,Americans make financial decisions every day of their lives, such as where to purchase food and how to save money on basic living expenses. However, few choices have implications that can match the seriousness of filing for bankruptcy.

Choosing to file for bankruptcy is a critical decision, but for millions of debtors, it is the first step toward financial stability. Although an attorney is the best source for guidance in this matter, here are three questions that can help you decide if bankruptcy is a smart option:

What Is My Current Financial Situation?

Your financial situation, which involves your asset value and income, can affect your eligibility for bankruptcy. If your income is too low, then you may not qualify for chapter 13 bankruptcy. If you file for chapter 7, then there is a chance that you would have to sell assets to pay creditors. These are important considerations before you decide to file.

Will Bankruptcy Actually Solve My Problems?

This is another question that may be difficult to answer without the help of an attorney. Each case is unique, so there may be bankruptcy alternatives that could apply to your situation.

Depending on the chapter you file, bankruptcy can resolve a long list of financial issues. First, it can stop harassment from collection agencies, according to Uscourts.gov. If you file for chapter 13, then you will have a structured repayment plan that can help you organize and manage your debt and finances. No matter which chapter you file, bankruptcy can ultimately lead to a life that is free from the stress that comes with insurmountable debt.

What Are My Long-Term Financial Goals?

Filing for bankruptcy does have certain consequences. It may be difficult to acquire a loan for a home, car, or another investment. You also may not have access to credit. As a result, bankruptcy may limit your financial goals. Before filing, it is important to evaluate these goals and determine how bankruptcy will affect them.

If you would like to learn if bankruptcy is a smart option in your situation, contact the Law Offices of Chance M. McGhee at 210-342-3400 to schedule a free consultation with an experienced San Antonio bankruptcy attorney.

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.

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