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The Cost of Care: Helping Elderly Parents

March 24th, 2014 at 12:59 pm

elderly parents, bankruptcy, finances, Texas lawyer, Texas bankruptcy attorneySome baby boomers have done advance planning to help those who will care for them in their old age by buying long term care insurance or setting aside specific funds. A growing number of aging individuals, however, are facing mental and physical challenges by relying on their family members. Research shows that 40 percent of U.S. adults are helping to care for a family member with a major health issue. The cost of caring for elderly parents can easily spin out of control, but you can get on top of your finances again through bankruptcy.

According to the National Alliance for Caregiving and the Metlife Market Institute, adults taking care of elderly parents face an increased risk of poor health themselves and a tendency to shortchange their own finances in the process. Poor health can lead to individual medical bills for you and using your savings to help a family member can lead to reliance on credit cards or loans to purchase basic necessities.

Sometimes one child has to give up their own career in order to focus on taking care of a parent. A female who chooses to give up her employment to become a caregiver will lose over $324,000 in pension or Social Security benefits and wages over the course of her lifetime. Many of the women taking on this new role hope that they will only need to step out of the workplace for a short period but then find that their family member requires more or longer-term care than they anticipated.

If you have been struggling to help a family member with the process of aging, there’s no doubt you have felt the impacts of doing so mentally, physically, and financially. If you are buried in debt and need a fresh start to get your life back on track, contact a Texas bankruptcy attorney today.

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.

Career Athletes and Bankruptcy

March 11th, 2014 at 12:08 pm

Olympics, Olympic Rings, San Antonio bankruptcy lawyer, career athletes, bankruptcy, financeThe 2014 Winter Olympics has just wrapped up and all eyes were on the incredible athletes from all around the world who have spent their life training for the big event. Although the Olympics is a celebration of all their hard work, it’s easy to underestimate the amount of time, energy, and financing that goes into preparing an athlete. Whether it’s the Olympics or professional sports, there’s a lot of hard work to get to the top. Some athletes struggle financially before or after their sports career, many even filing for bankruptcy.

The list of professional athletes who have gone bankrupt is longer than you might think. There are several reasons why they get there, but a primary one is poor financial planning or a series of hardships that threw them off course. Especially for younger athletes, not knowing how to properly manage their money can be a challenge too great, leading them to financial struggle mere years after their wealth accumulates.

According to a 2009 study, NFL retirees have a higher average income than men in similar age brackets of the general population. When that study broke down by age, however, younger athletes had higher numbers of sports stars with income close to or below the poverty level. A quick rise to fame can be difficult for younger athletes. Celebrating their big payoff after years of hard work and investment might mean financial difficulty and bankruptcy down the road as a result of poor financial planning.

Financial problems can affect individuals of all income levels and backgrounds. When you’re buried too deep and feeling like you’ll never be able to get on top of your situation, bankruptcy can be there to help. Bankruptcy can give you the fresh start you need. If you’d like to discuss your options, contact a San Antonio bankruptcy attorney today.

How Does Filing for Bankruptcy Affect My Credit Score?

February 14th, 2014 at 4:47 pm

bankruptcy IMAGEEvery person who opens up a credit card, gets a loan, or finances a car has a credit report. Over years of making payments and opening new lines of credit, the credit report will reflect your ability to pay bills on time and effectively manage your debts. Lenders will review your report while deciding if you are a good or bad credit risk. Events like filing for bankruptcy are also reported to credit reporting agencies and can negatively impact your score.

The type of bankruptcy which is filed has different effects on your report. A Chapter 7 bankruptcy can eliminate the majority of your debts such as credit cards, medical debts, and even secured debts. Since it does not require the debtor to repay debts, it will remain on your credit report for ten years. A Chapter 13 bankruptcy is a reorganization which requires repayment of part of the debts. This kind of bankruptcy stays on your credit report for seven to ten years, depending on the credit reporting agency.

A bankruptcy will also lower your overall credit score. A higher credit score will be decreased by more points than a lower credit score. Credit agency FICO created two examples of how this works. If you have a credit score of 780, filing for bankruptcy can take between 220 to 240 points off your score. Whereas, if your credit score is 660 and you file, the decrease is only 130 to 150 points. The rationale is that those with a lower score are already risks, so a bankruptcy is not as detrimental.

Being afraid of filing for bankruptcy can mean years of struggling with debts. If that means that you are missing payments, opening up new accounts, or using too much of your credit, then your credit report will decrease due to this risky behavior. Filing for bankruptcy gives you a financial restart necessary to start rebuilding your credit. Contact an experienced bankruptcy attorney in San Antonio today to discuss what filing for bankruptcy can do for you.

Are Cosigners Affected when Filing for Bankruptcy?

January 19th, 2014 at 12:13 pm

cosigner IMAGEIn some cases when a person has little or no credit history, it might be necessary to have a cosigner on a loan application.  It can be the difference between being approved for a loan or credit card and being denied.  Good cosigners have better credit scores and have shown an ability to handle their debt responsibly.  Typical cosigners include parents, relatives, or spouses.  But these cosigners are agreeing to be liable for debts if they are unpaid.

Since a bankruptcy can release or lessen debt obligations, it is important to know how cosigners are affected.  When they cosign for a loan, they are promising to take care of a debt if the debtor cannot.  A good example of when a debtor cannot handle their debt is when they file for bankruptcy.  What cosigners are responsible for after a bankruptcy is dependent on which chapter of bankruptcy is filed.

In Chapter 7 bankruptcy, the debtor’s responsibility to repay debts is eliminated.  This will stop creditors from contacting the debtor directly for repayment due to the automatic stay.  Unfortunately this protection is not extended to cosigners or guarantors.  They can still be contacted for the repayment of outstanding debts.

A way to protect a cosigner is by reaffirming the debts prior to the discharge.  This essentially gives up the protection of a Chapter 7 bankruptcy and “reaffirms” the responsibility to repay a debt.  Another way is to pay off the debt after the bankruptcy is completed.

A Chapter 13 bankruptcy offers more protection to cosigners.  That is because it allows the debtor to repay the cosigned portion of the debts personally.  All parties are protected by the automatic stay in this chapter of bankruptcy.  The stay can be lifted by the bankruptcy court if certain circumstances are met.  But in some cases, the cosigner is off the hook for debts included in the repayment plan.

If you are considering filing for bankruptcy, then make sure it is the right choice.  Contact a skilled bankruptcy attorney in San Antonio today to discuss your options and understand the repercussions.

Protecting Yourself From Refinancing Scams

December 30th, 2013 at 6:11 pm

Believe it or not, financial scammers often do not target the wealthiest individuals. Instead, those facing financial pressures and even considering bankruptcy are most often victimized. Those with money problems may painted into a corner, under immense stress, willing to do whatever it takes for a fresh start, and more susceptible to the dubious claims of scam artists.

refinancing scamStaying educated on the tricks of these con artists will help protect you from falling into their trap. How do scammers seek to steal from vulnerable Texas residents? A few of the most common scams include:

Home Affordable Refinance Program Scams (“HARP”): HARP is a program available to those who are not behind on their mortgage but have difficulty refinancing.  Scam artists are well aware that this program exists. They may try to contact you by phone or through the mail, claim that you qualify for HARP support, and ask for money to work through the process on your behalf. The only way to truly know if you qualify for HARP is to check HARP’s website, or contact your mortgage lender. Eligibility for HARP is based on a number of factors listed by HARP. If you are not sure you can check Freddie Mac’s website to gauge your potential eligibility for HARP.

Unfortunately, scammers often use HARP as a way to funnel money their way. The main thing to look out for are third parties asking for large fees to help you take advantage of the program.

 Rent to Own or Lease Back Scheme: This scam can result in loss of your home if you are not careful.  In this trick, con artists try to convince homeowners to sign over the title or deed to their home with no intention of ever giving the house back.  This is done with claims about getting money up-front while leasing the home or renting again in order to buy it back. These scam artists typically target people they know applied to refinance but were denied due to credit.

The best way to protect yourself from a scam like this is to never sign over the deed or title of your home unless you are legitimately selling the property with the aid of lenders, real estate agents, and proper legal professionals.

 Trusted Legal Help

If you are dealing with foreclosure, looming debt, and other financial pressures, remember that you do not have to handle it alone. An experienced Texas bankruptcy attorney can help. Our team in San Antonio works with residents throughout the state looking for a fresh financial start.  Feel free to contact us today to learn more.

State of Economy in Texas Remains Political Issue

November 21st, 2013 at 2:08 pm

With the gubernatorial race upon us, and local elections being decided throughout the country, the public will surely continue to be inundated with political ad campaigns and candidates’ appearances throughout the region. One of the most discussed issues involves Texas’ economy, and the correlated issues of unemployment rates and the public debt.

 According to My San Antonio, Attorney General Greg Abbott, who is running for the 2014 GOP gubernatorial nomination, stated during a recent campaign appearance that Texas’ debt ranks as the second highest among large states in the U.S., while San Antonio holds the highest debt of any city within the state. While this state of affairs is concerning, especially considering the recent actions of cities in financial crisis in other parts of the country, perhaps the public can find some reassurance in the fact that the elections will call attention to these issues and potentially produce proposed resolutions.

Unfortunately, considering the state of economic affairs in the state of Texas, it is not surprising that the citizens of Texas also experience financial strain. While the proposition of filing municipal bankruptcy is something that is generally considered as a last resort and is something to be avoided, individuals do not always have other feasible options. However, bankruptcy should not always be viewed as a negative process, as bankruptcy can offer not only debt relief for those who file, but a fresh start at a positive financial future.

Individuals generally file either a Chapter 7 or a Chapter 13 bankruptcy petition, depending on their intentions and the facts and circumstances surrounding their particular situation.  In a Chapter 7 bankruptcy, the petitioner obtains a discharge of his or her debt in exchange for surrendering certain items of property that will later be sold to satisfy their debt.  The bankruptcy code allows for certain exemptions that can be used to protect some items of the petitioner’s property from being surrendered.  In a Chapter 13 bankruptcy, the petitioner agrees to a repayment plan which provides for the petitioner’s debt to be repaid over a period of time, which can also include avoiding foreclosure by entering into a payment plan for the amount that is past due on the petitioner’s mortgage.  The petitioner’s specific repayment plan will depend on various factors, including income, total amount of debt, and types and the extent of other property they own.

The bankruptcy process can be overwhelming and complicated.  An experienced bankruptcy attorney in San Antonio can help guide you through the process and offer assurance in a stressful time.  Contact us today to discuss your options in filing for bankruptcy, and for advice in how to seek relief from financial difficulty.

 

Insured Patients and Bankruptcy

October 8th, 2013 at 8:54 am

Many people assume most bankruptcy filings are due to out-of-control spending habits or poor money management.  However, according to a study published in The American Journal of Medicine, one of the biggest reasons people file for bankruptcy is unpaid medical bills.

More surprising is that many who file for bankruptcy due to medical bills have health insurance.  So even with the expansion of health care coverage through the Affordable Care Act, there will still be people struggling under the weight of medical bills.  Understanding the expenses related to health insurance can help you be financially prepared.

 

Monthly Premiums

Unless you have an employer covering your full monthly premium, most people will have to pay at least part of this to have health insurance.  The amount you’ll pay for your monthly premium has many variables, including the amounts set for your deductible, co-payments and co-insurance.

Deductibles

A deductible is the amount of money you must pay before the health insurance company will begin paying benefits. Deductibles range considerably depending on your plan. Many people try to save on their monthly health care premiums by selecting plans with high deductibles.  This can be an effective strategy but a high deductible can be a real challenge if you ever need to pay it.

Co-Payments and Co-Insurance

Once your deductible is met, you may have co-payments and co-insurance to pay.  A co-payment is a specific dollar amount you may be required to pay each time you visit the doctor.  A co-insurance is a percentage of the covered service you may be required to pay.

Lifetime Maximum

Sadly, a serious illness or injury can deplete your health insurance completely, as many health insurance plans have a lifetime maximum.  This means that once your insurer has paid out a specific dollar amount, you no longer have benefits from that company.

What Can I Do?

You should discuss your financial concerns with your doctor.  While you do not want to compromise the quality of your care, sometimes good options are available that are less expensive.  And do not be afraid to shop around.  Look for cheaper prescription drugs and cheaper diagnostic tests.  Finally, discuss payment plans with your doctor’s office.

If you find yourself with mounting medical bills you cannot pay, bankruptcy may be the best option for you.  Contact an experienced Texas bankruptcy attorney today.

Which First, Divorce or Bankruptcy?

September 29th, 2013 at 8:00 am

courtMoney is a major source of tension for any marriage.  It may not be the cause of a divorce but financial arguments can add to the stress on any couple.  Especially if that pressure is compounded by bills that are not being paid and calls from creditors.  As much as financial troubles can be the cause of divorce, divorce can also be the cause of bankruptcy.

Given this close relationship to two of the most stressful events that might occur in life, it is important to plan ahead.  The first consideration is which you should do first, file for divorce or for bankruptcy.

The fees for filing for bankruptcy are the same regardless if you apply separately or together.  That means you can potentially save money if you file with your soon to be ex-spouse.  It should be mentioned to your bankruptcy attorney that you will divorce soon, that way there is no conflict of interest.

The next step is to consider what type of bankruptcy to file for, Chapter 7 or Chapter 13.  Since a Chapter 7 bankruptcy means that you sell your property and assets to repay your debts.  This is an easy and quick bankruptcy to complete before divorcing your partner.  Chapter 13 is a long term repayment program.  This would be difficult to complete without your spouse in the same household.  A Chapter 13 bankruptcy should be filed individually after the divorce is finalized.

If you need a restart financially, it makes more sense to file for bankruptcy before filing for divorce.  One of the major sticking points in divorce is the division of property.  By filing jointly, you may be eligible for more exemptions because you are still married.  But assets are not the only thing that gets divided, but debts do too.  If you are looking for a new start both in your finances and your love life, then contact a knowledgeable bankruptcy attorney in San Antonio today.

Filing for Chapter 7 Bankruptcy

August 20th, 2013 at 10:23 am

LucyWhen someone files for personal bankruptcy, they typically file for either Chapter 13 bankruptcy or Chapter 7 bankruptcy. Under Chapter 13, a payment plan is set up for the debtor to pay back all of the debts, whereas, under Chapter 7, the debts are forgiven.

When a person files for Chapter 7 bankruptcy, these are some important steps to take early on:

The person in debt (debtor) must file a bankruptcy petition with the court, along with a list of assets and liabilities, a list of income and expenditures, a financial affair statement and a list of all current leases

  • Once the petition has been filed, debtors must also have tax documents available to hand over to the case trustee
  • If the majority of the debts are consumer debts, the debtor must also file a certificate of credit, a copy of a debt repayment plan from credit counseling if there is one, evidence of payment from employers and any interest in qualified education or tuition accounts

The court then charges the debtor the following fees, which must be paid immediately unless permission is granted otherwise by the court. If these fees are not paid, the case may be dismissed.

  • $245 case filing fee
  • $46 administrative fee
  • $15 trustee surcharge

Information needed to complete all of the necessary forms for the petition, includes:

  • A list of all creditors and the amount and nature of the money due to them
  • The debtor’s income, including the amount, source, and frequency
  • A list of all of the debtor’s properties
  • All monthly expenses such as food, shelter, utilities, transportation, medications, taxes and clothing

Determine possible exemptions in the case. States have specific assets that can be exempt from a case, or a debtor can choose what he or she wishes to be exempt from the case. It is important to determine this early on with an attorney.

Although there are many additional steps that must be taken to file for bankruptcy, these are a few that are very important to get the ball rolling. For additional help, contact a San Antonio bankruptcy attorney. Attorney Chance M. McGhee can help you file and get your debts taken care of today.

Call today for a FREE Consultation

210-342-3400

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