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Schertz Bankruptcy LawyerDebt is a significant issue for millions of people in the United States. In some cases, these debts may be manageable, and a person or family may be able to make affordable payments toward a home mortgage, auto loans, student loans, and/or credit cards while being able to cover their regular living expenses. Unfortunately, there are many situations where a family’s debts may become unmanageable, and they may begin considering bankruptcy. Because of the stigma surrounding bankruptcy, those who are in this position may feel that they will be looked down upon. However, understanding the reasons that people often file for bankruptcy can help a person realize that they are not alone and that they can benefit by receiving relief from their debts.

Bankruptcy Is Usually Based on Issues Other Than Financial Irresponsibility

The stereotypical bankruptcy involves a person who has engaged in reckless spending without considering the consequences of their actions. Many people believe that if a person files for bankruptcy, this is a sign that they have racked up large credit card bills, spent money on unnecessary luxuries, and generally behaved irresponsibly. However, in most bankruptcy cases, this is far from the truth. In fact, people are likely to encounter large debts because of issues such as:

  • Medical bills - Around two-thirds of all bankruptcy cases involve medical debts. Even when a person has health insurance, a medical emergency or a major procedure may result in tens of thousands of dollars in medical bills. These issues are often unforeseeable, and a family may find themselves in an impossible situation in which they owe huge amounts of money with no possibility of being able to pay off these debts. Using bankruptcy to wipe out medical debts is often the best solution in these cases.


Kerrville Debt Relief LawyerDebt is a significant issue that affects many families. Struggling to pay bills and fielding calls from creditors while also working full time–or more–and managing other family responsibilities can be incredibly stressful. While bankruptcy is often the best option for dealing with these situations, many people are hesitant to pursue this type of debt relief. However, the fears that people often have about bankruptcy may be unfounded. By understanding the bankruptcy process and how it will affect your life, you can make sure you are taking the right steps to regain financial stability.

Addressing Bankruptcy Fears

While there are multiple different reasons why your family may be struggling with debts, the option to file for bankruptcy is available regardless of your financial situation. As you consider whether bankruptcy is the right choice for you, it is important to remember that:

  • You have options to help you avoid losing your assets - For many people, the biggest concern related to bankruptcy involves the possibility that they will be required to surrender certain assets or that they may lose their home to foreclosure. However, depending on the extent of your assets and the type of bankruptcy you pursue, you may not be required to turn over any property. If you file for Chapter 7 bankruptcy, many of your assets may be exempt from liquidation, and you may even be able to complete a no-asset bankruptcy and avoid the loss of any property. If you are looking to avoid the loss of your home or the repossession of other property, Chapter 13 bankruptcy may be an option that will allow you to repay some of your debts without turning over any assets.


San Antonio Bankruptcy LawyerIssues related to money are a common source of stress for many people. Families can sometimes struggle to cover their ongoing living expenses, especially in times when prices for many products are rising and unexpected expenses can arise suddenly. These issues can be compounded by debts. If a family is struggling to pay what they owe while also meeting their ongoing needs, they may be receiving constant calls from creditors, and they may be concerned about how this will affect their overall finances and their ability to maintain ownership of their home or other property. In these situations, bankruptcy may be an option for debt relief, but filing for bankruptcy can add additional stress, especially when a family does not know what to expect during this process. If you are struggling with debts and considering bankruptcy, you can help alleviate your stress by following these tips:

  • Avoid blame - Debt is often seen as a personal failing, and those who are struggling financially may feel that they are to blame for their situation due to irresponsible behavior. However, in many cases, overwhelming debts occur because of circumstances that are out of a person’s control, such as serious health issues that lead to large medical bills while affecting their ability to work and earn an income. Regardless of the reasons for your debt, you can help avoid negative emotions by deciding to put these issues in the past and determine how to move forward and regain control of your financial situation.

  • Gain a better understanding of your financial situation - In many cases, stress related to debt is based on uncertainty about the extent of what is owed. It is often a good idea to obtain a copy of your credit report to make sure you fully understand your debts, and you can also take steps to address your ongoing expenses and determine how much disposable income is available to you.


San Antonio Bankruptcy Protection LawyerFor those who have significant debts or who have experienced financial hardship, bankruptcy may provide them with the ability to regain financial stability. After a person files for bankruptcy, the court will place an automatic stay on all collection actions by creditors. This will prevent creditors from contacting a debtor, seeking repayment of debts that are owed, pursuing judgments against a person, taking actions to enforce judgments (such as wage garnishment), repossessing property, or proceeding with a home foreclosure. The automatic stay will provide a person with protection during the bankruptcy process, allowing them to determine the best ways to address their debts. However, there are some situations where creditors or other parties may request to have the automatic stay lifted so they can proceed with collections or other actions against a debtor. By understanding when relief from the automatic stay may be available, a person can determine the best ways to respond to these requests.

Motions for Relief From the Automatic Stay

Most of the time, a creditor will only be able to lift the automatic stay if they can show that there is good cause to do so. Creditors or other parties may file a motion for relief from the automatic stay in cases involving:

  • Secured debts - The most common reasons why creditors seek relief from the automatic stay often involve a desire to protect their interest in property or assets that are in the possession of the debtor. For secured debts, creditors will have a financial interest in the collateral used to secure the debts, and in some cases, creditors may believe that they will be unable to fully recover the amount owed to them. For example, if a debtor has defaulted on an auto loan, the creditor may be concerned that if they are unable to repossess the vehicle, the debtor may take actions that decrease the value of the vehicle, preventing the creditor from being able to recover what is owed. A creditor may be able to lift the automatic stay and proceed with a repossession if they can show that they do not have adequate protection against financial losses and that the debtor does not own any equity in the collateral.


Schertz Debt Relief AttorneyWhen a person or family has large debts that they are struggling to repay, there are multiple options for relief. In many cases, bankruptcy can provide the best way to eliminate crushing debts. Depending on the type of bankruptcy pursued, a debtor may be required to turn over certain assets, which will be liquidated in order to repay some of the debts owed to different creditors. If a person has a retirement savings account or other types of assets that they expect to use to provide for their needs after they retire, they may be concerned about whether they will be able to maintain ownership of what they have saved or whether their accounts will be seized during the bankruptcy process.

Addressing ERISA Plans and Other Retirement Assets in Bankruptcy Cases

In a Chapter 7 bankruptcy, which is also known as a “liquidation bankruptcy,“ certain assets owned by a debtor may be seized by the bankruptcy trustee. In a Chapter 13 bankruptcy, a debtor usually will not be required to turn over their assets, but they will be required to make payments to creditors over a period of three to five years, and the amount creditors receive through this repayment plan must be at least as much as what they would have received if a person’s assets were liquidated in a Chapter 7 case.

The assets that will be considered during bankruptcy are known as the bankruptcy estate. The U.S.Bankruptcy Code states that employee benefit plans that are covered by the Employee Retirement Income Security Act (ERISA) may not be included in the bankruptcy estate. These include employer-sponsored retirement savings accounts such as 401Ks. Deferred compensation plans such as pensions and tax-deferred annuities will also not be considered when determining the value of a debtor’s assets that may be liquidated during bankruptcy.


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