Posted on January 20, 2022 in Bankruptcy

At the Law Offices of Chance M. McGhee, we regularly publish blogs addressing a wide variety of topics related to bankruptcy, foreclosure, and debt relief. We work to provide potential clients with helpful information about their options for addressing and eliminating debts while protecting their assets and ensuring that they can maintain financial stability. We wanted to highlight the most-read blogs of 2021, and these articles demonstrate the knowledge and assistance that we offer to people in cases involving bankruptcy.

1. Can I Keep My Car if I File for a Texas Bankruptcy? - In addition to looking at the options for reaffirming or redeeming a car loan during the bankruptcy process, we recently updated this blog with information about when a “cramdown” may be used to reduce the amount owed on these types of loans.

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 Posted on January 18, 2022 in Bankruptcy

While bankruptcy can provide much-needed relief from debts, it may also affect a person’s ability to maintain ownership of different types of property. While a person can use bankruptcy to discharge multiple different types of debts, the elimination of secured debts will likely result in the repossession of the property used as collateral in these debts. To avoid this, a debtor may be able to reaffirm certain loans. However, it is important to understand the advantages and disadvantages of doing so.

Pros and Cons of Reaffirmation

Property such as vehicles or appliances may be seized by creditors if a debtor fails to make payments on a loan. By entering into a reaffirmation agreement during bankruptcy, a debtor can prevent these types of repossessions. For a reaffirmation agreement to be valid, a person will usually need to catch up on any missed payments, and they will need to submit the agreement in court during the bankruptcy process. Reaffirmation is most commonly used during a Chapter 7 bankruptcy.

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 Posted on January 13, 2022 in Bankruptcy

If your family has experienced financial difficulties, such as the loss of a job, large medical expenses, or a disability, you may be struggling to pay certain types of debts. If you are a homeowner, you may have gotten behind on your mortgage payments as well as other expenses, including property taxes. Unfortunately, nonpayment of property taxes can lead to a number of issues that may affect ownership of your home, including property tax liens or different types of foreclosure. While bankruptcy may be an option for addressing property taxes and other debts, it is important to understand your options and the best steps you can take to ensure that you can maintain financial stability in the future.

Addressing Property Taxes Through Chapter 7 or Chapter 13 Bankruptcy

If you have not paid property taxes for multiple years, your local or county government may pursue a property tax foreclosure. However, in many cases, you are more likely to face a foreclosure by your mortgage lender. Since payment of property taxes is a requirement in a mortgage loan, failure to do so may be considered a violation of the loan agreement. If a mortgage lender has paid property taxes to avoid a property tax foreclosure, they may choose to foreclose on the property to seek repayment for this amount.

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 Posted on January 06, 2022 in Bankruptcy

Many people who are struggling with overwhelming debt hesitate to file for bankruptcy, even when it is their best option for debt relief. They worry that having a bankruptcy on their credit report will harm any chance they have of ever owning their own home. The reality is, however, that having delinquent payments and/or charged-off accounts on your credit report is just as – if not more – harmful and could torpedo any plans of obtaining approval for a mortgage. The following are some steps you can take to help obtain that approval in your post-bankruptcy life.

Rebuilding Credit Is Key

Once your bankruptcy petition has been completed and your debts discharged, although your credit score will likely be low, think of this as starting out with a new and clean financial slate. Rebuilding your credit should be your goal.

Start by looking over your credit report. Make sure that it is correct and that all of the items that were discharged in your bankruptcy have been removed from your credit report. Also, make sure there are no other derogatory items that should not be there.

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 Posted on December 28, 2021 in Bankruptcy

If you are considering bankruptcy, you have most likely been placed in a difficult financial position due to circumstances beyond your control. While most people have some debts, they will often do everything they can to meet their financial obligations. However, a person or family may encounter issues such as the unexpected loss of a job or a serious illness that leads to large medical bills while also affecting a person’s ability to earn an income. In these cases, debts may become unmanageable, and bankruptcy may be the best option for debt relief. Even though a person or family will usually be aware of the reasons why they are in this situation, a debtor will be required to receive credit counseling during the bankruptcy process.

Credit Counseling and Debtor Education

The U.S. Bankruptcy Code requires debtors to complete two types of counseling during the bankruptcy process. These forms of education are meant to help debtors understand the issues that may have led them to experience financial difficulties and encourage them to follow practices that will allow them to maintain financial stability in the future. Prior to filing for bankruptcy, a debtor will need to complete credit counseling, and before discharging their debts, they will be required to take a debtor education course.

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 Posted on December 21, 2021 in Bankruptcy

If you have significant debts, bankruptcy may be your best option for receiving relief and ensuring that your family will be able to live comfortably and cover your ongoing expenses. However, it is important to make sure you follow the correct procedures when filing for bankruptcy and provide accurate information when submitting bankruptcy forms. Misreporting financial information or other types of activities could lead to accusations of bankruptcy fraud. This could cause your bankruptcy case to be dismissed, or you could even face criminal charges. By understanding the reasons why a person may be accused of bankruptcy fraud, you can make sure you are avoiding these issues and taking the correct steps to discharge your debts.

Forms of Bankruptcy Fraud

Criminal charges for bankruptcy fraud usually require prosecutors to show that a person intentionally provided false information or took improper actions to abuse the bankruptcy system. These actions may include:

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 Posted on December 14, 2021 in Bankruptcy

Debts can be a significant problem that affect a family’s financial resources and its ability to pay ongoing expenses. In cases where debts become unmanageable, a family may experience a number of difficulties as they face harassment from creditors and attempts to collect what is owed. In cases where a person gets behind on payments on an auto loan, a creditor may take action to repossess the vehicle. In these cases, debtors will want to understand their options, including determining whether they may be able to get their vehicle back by filing for bankruptcy.

Responding to a Repossession

Most of the time, debtors will want to address their debts before creditors take action to recover money owed or repossess property. Filing for bankruptcy will place an automatic stay on any collection actions and prevent the repossession of a vehicle. However, if a vehicle has already been repossessed, a debtor will need to act quickly to determine whether they can get their vehicle back. If a lender sells a repossessed vehicle through an auction, it will belong to the new owner, and the debtor will not be able to regain ownership.

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 Posted on December 09, 2021 in Bankruptcy

Most American consumers have debt in some form, and those who experience financial difficulties may struggle to repay these debts. Failing to make payments on time can have a significant effect on a person’s credit score, and this may make it more difficult to obtain loans or other forms of credit in the future. A low credit score can also affect a person in other ways, including their ability to find employment or obtain housing. While those who are struggling with debts may be able to receive relief by filing for bankruptcy, this will have a further negative impact on their credit score. As they determine how to rebuild their credit, a person may consider some alternatives to bankruptcy, and by consulting with an experienced attorney, they can understand their best options for receiving debt relief and maintaining financial stability.

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 Posted on December 06, 2021 in Bankruptcy

If you have significant debts that you are struggling to repay, you may be considering bankruptcy. However, you may be worried that if you file for bankruptcy, you could lose certain assets that you own, such as your home, your family’s vehicles, or valuable possessions. By understanding the laws that will apply to you when you file for bankruptcy or seek other forms of debt relief, you can determine your options for asset protection and the best ways to address your debts and maintain financial stability.

Using Bankruptcy Exemptions

If you are planning to file for Chapter 7 bankruptcy, you may be required to turn over certain assets, which will be liquidated to repay as much of your unsecured debts as possible before these debts will be discharged. However, certain types of property are exempt from liquidation. As you prepare for bankruptcy, you may be able to utilize these exemptions to avoid turning over your assets.

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 Posted on December 02, 2021 in Bankruptcy

Originally published: February 28, 2020 -- Updated: December 2, 2021

UPDATE: In addition to understanding how filing for bankruptcy may affect ownership of a vehicle, a debtor will want to determine whether they can use a “cramdown” to reduce the amount they owe on an auto loan while addressing other debts during the bankruptcy process. This option is available in a Chapter 13 bankruptcy, and it can ensure that a person will avoid the potential loss of their vehicle while still being able to make affordable payments.

A cramdown is a reduction in the amount owed on an auto loan. A debtor may be eligible for a cramdown if the remaining amount that they owe to a lender is greater than the actual cash value of the vehicle. In addition, the debtor must have originally purchased the vehicle at least 910 days before filing for bankruptcy. For example, if $20,000 is owed on a loan, but the car’s market value is $13,000, the amount of the loan may be reduced to $13,000. The remaining $7,000 will be classified as an unsecured debt and included in the debtor’s Chapter 13 repayment plan. By reducing the amount of this loan and discharging other debts, a person can ensure that they will be able to maintain financial stability and avoid the loss of their vehicle.

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