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Preparing for Personal Bankruptcy in Texas
The decision to file for personal bankruptcy is not one that is easily made. Moreover, the days, weeks, and months following the decision can also be difficult, as there may be feelings of fear or concern. Then there is still the stress of preparing for the bankruptcy process. The following may be able to help alleviate some of that stress and provide guidance on how to find the assistance you need.
Start by Contacting an Attorney
While there are many steps to take during the bankruptcy process, your first should be to contact an experienced bankruptcy lawyer. Not only does this help you prevent missteps during the bankruptcy process, but it can also expedite the next steps. By contacting a lawyer, you can get you on your way to less stress from the creditor calls and collection letters.
Cancel Your Automatic Payments
If you are like most consumers, you have automatic payments that are drafted from your account. Some might be for subscriptions while others might be with creditors, all should be eliminated. This can help you start to step forward and manage your debt more responsibly. It also gives you more control over what you are paying in the weeks leading up to the bankruptcy filing.
Debunking Four Common Bankruptcy Myths
There are many negative perceptions about bankruptcy. On one hand, some of these perceptions are well-deserved. After all, there are some potential drawbacks to filing. Yet there are also some major misconceptions about bankruptcy—some of which could keep someone from filing when they really should. The following information is designed to debunk these bankruptcy myths. It may even help you decide what your next step should be, and if bankruptcy might be the right solution for you.
Myth 1: Bankruptcy Ruins Your Credit Forever
True, your credit can take a hit after filing for bankruptcy, and it may be difficult to obtain new lines of credit once the process starts, but bankruptcy does not completely ruin your credit. If anything, it gives you a clean slate to start over. It is also usually less damaging than continuing to make late payments on your debts. If you are still a little apprehensive about filing, talk to a qualified bankruptcy attorney for a comprehensive analysis of your financial situation.
Settling Debt with Your Creditors After a Hardship
Life can be unpredictable. Life can be messy and complicated. And, sometimes, the worst things that can happen to us are completely out of our control. But what do you do when the messy, unpredictable, and complicated lead to financial problems? How do you turn things around and regain control of your financial future? The answer really depends on where you are in the debt collection process. While some may be able to find a viable bankruptcy alternative, others may need more aggressive action. The following information may be able to help you in determining your best course of action for settling debt with creditors.
Creditor Harassment with No Negative Actions
If you have only just started being hounded by your creditors and have not yet received any notice of wage garnishment, tax or property liens, bank seizures, home foreclosure, or any other negative actions against you, you may be able to negotiate a repayment plan with your creditors. But, because not all creditors are willing to work with consumers, and because they have no incentive to actually help you, it may take the assistance of a skilled attorney to resolve the matter before things escalate.
Bankruptcy Timing for Vehicle Cramdown
Cramdown usually lowers your monthly vehicle loan payment and the total amount you must pay. To qualify the loan must be more than 910 days old.
We’re in the midst of a series on filing your bankruptcy case with the best timing. Today we get into the right timing to be able to cram down your vehicle loan. Cramdown is a potentially huge benefit, so it’s important to know how to take advantage of it. One key consideration in this is the timing of your bankruptcy filing.
Advantages of Vehicle Loan Cramdown
In a Chapter 7 “straight bankruptcy” case, if you have a vehicle loan you must “take it or leave it.” To keep the vehicle, you have to “reaffirm” the vehicle loan. That means you agree to remain fully liable on the debt. It usually means you are stuck with the regular monthly payment, even if you can’t afford it. You can’t change the interest rate, even if it’s high, and jacking up how much you must pay. You are stuck with the full balance on the loan, even if the vehicle is worth much less. This includes late fees and any other contractual charges. If you’re behind almost always you have to quickly catch up. Usually, the only other choice is to “leave” it—surrender the vehicle and discharge (write-off) the vehicle’s debt. If you need and want to keep your vehicle, that’s not an option.
Chapter 13 Timing to Discharge Student Loans
Discharging a student loan requires meeting the difficult condition called undue hardship. Chapter 13 can help through more flexible timing.
We’re in a series on the best timing for filing your bankruptcy case. Two weeks ago we introduced the special condition you have to meet to discharge (write off) student loans: undue hardship. Last week we focused on how to better meet that condition with smart timing of a Chapter 7 “straight bankruptcy” case. Today we get into doing that with a Chapter 13 “adjustment of debts case.
Undue Hardship Requirements
We’re focusing on the phrase “undue hardship” because the law clearly establishes that as a condition for discharging student loans. The U.S. Bankruptcy Code says you can’t discharge a student loan unless paying it “would impose an undue hardship on the debtor [you] and the debtor’s dependents.” Section 523(a)(8). Generally bankruptcy courts have interpreted “undue hardship” to include three requirements. Each has a timing consideration. We’ll look at these three, showing how the timing benefits of Chapter 13 case can help you meet them.
Bankruptcy and Debt Solutions: How Can I Find a Reputable Credit Counselor?
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.
Chapter 7 Timing to Discharge Student Loans
Discharging a student loan requires showing undue hardship. The timing of your Chapter 7 filing can determine whether you succeed in this.
We’re in a series on the smart timing of your bankruptcy case. Last week we introduced the special condition you must meet to discharge (write off) student loans: “undue hardship.”
Bankruptcy discharges other special forms of debt—such as income taxes—after the passage of a certain amount of time. But student loans are different in that there is no explicit time period laid out in bankruptcy law. Rather “undue hardship,” the condition you must meet to discharge a student loan, often has timing considerations within it. That is, qualifying for “undue hardship” may require timing your bankruptcy case right. You may not be in “undue hardship” at one point but could be earlier or later.
Today we show that can play out under Chapter 7 “straight bankruptcy.”(Next week we’ll do the same under Chapter 13 “adjustment of debts.”)
Bankruptcy Timing to Discharge Student Loans
Discharging—permanently writing off—student loans can be difficult. You may be able to make it easier to do with good bankruptcy timing.
Discharging Student Loans in Bankruptcy
It takes certain circumstances to discharge student loans. Those circumstances can involve the right timing of your bankruptcy case.
Bankruptcy discharges most debts. But it “does not discharge” you from a student loan unless not discharging that debt “would impose an undue hardship.” “[I]mpose an undue hardship” on whom? “[O]n the debtor [you] and the debtor’s dependents.” Section 523(a)(8) of the U.S. Bankruptcy Code.
What does that mean and how is it affected by the timing of your bankruptcy case?
“Impose an Undue Hardship”?
How Should I Handle Creditor Harassment After a Bankruptcy Filing?
When you file for bankruptcy, you are granted an automatic stay on most of your debts. Essentially, this means your creditors cannot contact you or attempt to collect the debt. What happens, though, if the creditor keeps calling and harassing you through the mail, at your work, or at your home? Rest assured: you can enforce the protections that bankruptcy offers.
When Contact Is a Genuine Oversight
All creditors know (or should know) that a bankruptcy filing means they must cease all contact with you, as the debtor. As such, most who violate this rule have simply done so due to an oversight. Perhaps they did not remove your name from the system properly, or they have not received the paperwork yet that notifies them of your filing. In any case, it is important that you not overreact or panic during the initial contact from a creditor. Instead, simply inform them that you have filed for bankruptcy and politely refer them to your attorney.
Prevent Fraud Challenges on a Credit Card Debt
Very recent credit card purchases and cash advances can be a problem when filing bankruptcy. Smart timing can mostly solve this problem.
Last week’s blog post introduced the so-called “presumptions of fraud” in bankruptcy. Today we get into dealing with this issue through smart bankruptcy timing.
Bankruptcy Timing to Avoid the Presumption of Fraud
Here’s the key point: you greatly increase the risk that you’ll still have to pay a credit card debt if you file bankruptcy too soon after incurring that debt. You risk still having to pay the purchase(s) and/or cash advance(s) recently incurred. You may still have to pay that part of that credit card debt in spite of bankruptcy.
But you can avoid much of that risk by timing your bankruptcy right. The presumptions of fraud are in effect for only a relatively short period of time after you make the purchase or cash advance. You avoid the presumption of fraud simply by filing bankruptcy after that short period of time has passed.
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