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What You Need to Know About Vehicle Repossessions and Bankruptcy in Texas
For most people, owning a vehicle is necessary to ensure that they can travel to and from work and complete other daily activities. Unfortunately, this means that if a person is struggling with debts and cannot make payments on an auto loan, they may be put in an even more difficult position due to the repossession of their vehicle. Anyone who has an auto loan should be sure to understand the types of situations where repossessions may be performed. Those who are facing a repossession may be able to address these issues and avoid the loss of their vehicle by filing for bankruptcy.
Repossession Laws in Texas
In cases where debtors have secured debts, creditors have the right to take possession of the collateral used to secure these debts following a default. This means that if a debtor misses a single payment on an auto loan, the lender may take action to repossess the vehicle. A debtor will need to be sure to understand how the terms of their loan address repossessions so that they will be aware of whether missed payments may result in the loss of their vehicle.
What Are Priority Debts, and How Are They Addressed During Bankruptcy?
A person or family may accrue multiple types of debts. When debts become overwhelming, or when financial difficulties make it impossible to repay what is owed, bankruptcy may be the best option, since it will often allow for the elimination of certain debts. For those who are considering bankruptcy, it is important to understand how different debts will be handled, including those that are considered to be priority debts.
Priority Debts in Chapter 7 and Chapter 13 Bankruptcy
Bankruptcy allows some debts to be discharged, eliminating the debtor’s requirement to repay the amounts owed. Secured debts such as home mortgages or auto loans generally will not be discharged during bankruptcy, since this would lead the creditor to repossess the collateral used to secure the loan. However, unsecured debts can usually be discharged once the bankruptcy process is completed.
Understanding Your Rights Regarding Creditor Harassment and Bankruptcy
If you have encountered financial difficulties that have affected your ability to repay your debts, it is likely that you are experiencing regular calls from creditors. Dealing with these calls or other forms of communication can be very stressful, especially if you are already struggling to cover your regular living expenses. Fortunately, you have protections against creditor harassment under the laws of the United States. By understanding your rights and your options for addressing your debts, you can take the correct steps to stop harassment from creditors as you determine how to return to financial stability.
The Fair Debt Collection Practices Act
Unfortunately, creditors have a reputation for taking inappropriate actions as they attempt to collect debts, and they can often engage in harassing behavior. To address this issue, the federal government has put the Fair Debt Collection Practices Act (FDCPA) in place, and this law details how creditors can contact debtors and attempt to collect debts, as well as the actions that debtors can take to address harassment.
Addressing Negative Ideas About Bankruptcy
In the United States, financial problems are a common issue that affects many people and families. Nearly everyone has some form of debt, and while many are able to manage these amounts and make affordable payments toward what is owed, an increasing number of individuals, married couples, and families are struggling financially. While bankruptcy may be an option for people in this situation, the negative ideas and perceptions surrounding this form of debt relief have caused many people to be hesitant to take this step. By addressing these ideas and gaining a better understanding of the bankruptcy process, debtors can determine whether this may be the best option for them.
Bankruptcy Is Often a Last Resort
Many of the negative perceptions surrounding bankruptcy involve the idea that it is a sign of irresponsibility. Some may think of bankruptcy as a way to avoid the consequences of a person’s actions. Those who struggle with debts may believe that others will think they have spent money wastefully, purchased items they could not afford, or put money toward non-essential purchases rather than paying their ongoing bills.
Can I Buy a Home After Filing for Bankruptcy?
If your family has experienced financial difficulties, and you are struggling to pay the debts you owe while also managing ongoing household expenses, you may be considering bankruptcy. Filing for bankruptcy can provide some immediate relief, since it will create an automatic stay that will prevent creditors from contacting you, seeking repayment of debts, or taking actions such as pursuing judgments, repossessing property, or garnishing your wages. When you complete the bankruptcy process, certain types of debts will be discharged, and you will not be required to pay the amounts owed. While bankruptcy can provide many benefits, you may be concerned about how it will affect you in the future, especially if you are planning to buy a home. By understanding how bankruptcy will affect your ability to obtain a mortgage, you can make plans that will allow you to achieve your goals.
What Do Married Couples Need to Know When Filing for Bankruptcy?
Debt can be a serious problem for many families, especially when they encounter financial difficulties that make it difficult or impossible to pay back what is owed. When married couples struggle with debts, they may have a variety of concerns, including whether they will be able to maintain ownership of their home and how they will be able to cover their family’s ongoing expenses. For couples who are unable to fully pay back the debts they owe or who looking to prevent a home foreclosure, bankruptcy may provide much-needed relief. However, it is important to understand the options when filing for bankruptcy and the laws that apply to married spouses in these cases.
Filing Bankruptcy Jointly or Separately
Married couples will usually combine their finances, sharing joint bank accounts and credit cards, taking out loans in both of their names, and working together to pay bills and expenses. Because of this, it usually makes sense for a couple to file for bankruptcy together. A joint bankruptcy petition will take the income earned by both spouses into account, and all of a couple’s debts, including those they obtained together or separately, may be considered. If a couple qualifies for Chapter 7 bankruptcy, they may receive a discharge of all of their joint and separate debts. If they opt for Chapter 13 bankruptcy, both of their incomes will be used to determine the amount they will pay toward a three-to-five-year repayment plan, and this option may allow them to avoid the loss of their home or other property.
Will a Bankruptcy Show Up on a Background Check?
There are many reasons why a person may consider filing for bankruptcy. This is usually a solution for people who have extensive debts that will be difficult or impossible to fully repay, especially if they are experiencing harassment from creditors and could potentially face consequences such as wage garnishment, home foreclosure, or repossession of a vehicle or other property. Filing for bankruptcy will allow the requirement to repay certain types of debts to be completely eliminated, and it can provide much-needed financial relief. However, a bankruptcy can remain on a person’s record for a number of years. Those who are considering bankruptcy will want to understand whether background checks performed by prospective employers or others will include information about their bankruptcy filing.
Background Checks, Credit Reports, and Bankruptcy
There are multiple types of background checks that may look into a person’s criminal record, their involvement in civil court cases, and their credit history. Bankruptcy will not appear on a person’s criminal background check or a check of civil court records. However, a federal records check may uncover a bankruptcy filing within the past 10 years. A person’s credit report will also include any bankruptcy filings. A Chapter 7 bankruptcy will stay on a credit report for 10 years, and a Chapter 13 bankruptcy will be included for seven years.
Can I Remove Liens From My Home Through Chapter 13 Bankruptcy?
There are multiple types of debt that can cause a family to experience financial difficulties. When a family struggles to repay what is owed to creditors, they may be concerned about the steps that may be taken, such as a bank foreclosing on their home if they are unable to make mortgage payments. In some cases, multiple creditors may have a claim against a home, and different types of liens may exist. Debtors who are in a difficult or impossible financial situation may be considering bankruptcy, but they will often want to determine whether they will be able to keep their homes. Chapter 13 bankruptcy is often the best option in these cases, and when filing for this type of bankruptcy, it is important to understand how different types of liens will be handled.
Priority of Liens in a Chapter 13 Bankruptcy
While bankruptcy will allow for the discharge of a person’s obligation to repay debts, it may not eliminate certain types of liens. This means that even if a debt is discharged, a lien holder will have the right to enforce their claim against the debtor’s home. However, Chapter 13 bankruptcy may allow for the removal of certain types of liens through a process known as “lien stripping.”
How Are Liens Handled During a Chapter 7 Bankruptcy?
Debt-related issues can be complicated, and understanding the financial issues surrounding the money owed to creditors can often be difficult. In addition to the money a person owes, multiple different types of liens may exist on the property they own. For those who are unable to pay their debts, bankruptcy may be a good option, but they will need to understand how this will affect both the amounts they owe to creditors and any liens that are in place.
Chapter 7 Bankruptcy and Different Types of Liens
When a person takes out debts, they will have an obligation to repay what is owed. In some cases, this obligation may be enforced through a lien. A lien will give a creditor a legal claim against property owned by the debtor. In some cases, creditors may be able to enforce liens by repossessing property, or a lien may give them the right to receive payment when the property is sold.
How Are Trusts Handled in Bankruptcy Cases?
Trusts can be helpful tools used by families as part of a comprehensive estate plan or for asset protection purposes. When a person creates this type of legal agreement, they will transfer ownership of certain assets to the trust, and a trustee will maintain control over these assets and distribute them to different beneficiaries according to specific instructions. For those who are considering bankruptcy, it is important to understand how assets held in a trust will be addressed during this process.
After filing for bankruptcy, a debtor will be required to submit documentation of all of the assets they own. In a Chapter 7 bankruptcy, certain assets may be seized by the bankruptcy trustee and liquidated, while in a Chapter 13 bankruptcy, a debtor’s assets and financial resources may determine the amount that will be paid in a monthly repayment plan. Since assets held in a trust will generally be considered to be owned by the trust rather than the debtor, there may be some question about whether these assets will be part of the bankruptcy estate. When addressing this issue, a bankruptcy trustee may look at how much control a person has over the assets in a trust and whether they are a beneficiary.
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