Action Steps for Choosing Dallas Chapter 7 or Chapter 13 Bankruptcy
September 29, 2010
Filing bankruptcy in Dallas Texas need not be a nightmare where you spend months to years trying to discharge debt. In fact, you can save yourself a lot of trouble by reading guides just like this one from legal authorities. More important is understanding how the Dallas bankruptcy process works and who can help you.
While the Texas economy has been hit less by the current financial crisis, as bankruptcies and foreclosures are much better than states such as Georgia, California, and Florida, the problem is still here. When you’re considering Dallas bankruptcy, look over the following action steps.
1-Be Honest
Bankruptcy fraud is very common across the country of late, mainly because filers are trying to protect money, property, and assets. This can be understandable: you spent $50,000 on the home, you have a family to support, you can’t be on the street, and so on. However, bankruptcy fraud is easy to catch when you’re trying to file, and robs you of the benefits of bankruptcy in the first place.
2-Set Goals
On a more positive note, setting goals can actually help you decide what you want and can keep, what you stand to lose, and where you want to be months to years down the road. For Chapter 7 bankruptcy, you might have a goal of discharging a huge medical debt in 4 months, to continue paying on your home, and to avoid wage garnishment. If you have a Dallas home in danger of foreclosure, you might set a goal of protecting it with a Chapter 13 bankruptcy, while also paying on other debts in a more affordable manner. These techniques are important: they can give you hope.
3-Learn the Rules
Filing bankruptcy in Texas is different than other states. Each state has unique laws for eligibility, exemptions, and protections. It’s important to understand what you stand to lose and keep if you file for bankruptcy in Dallas. For example, if you want to discharge your debt with Chapter 7, you cannot make too much money. On the other hand, you may be able to protect your home with a bankruptcy exemption. There are hundreds of laws, making the next action step important.
4-Get a Dallas Lawyer
A Dallas bankruptcy lawyer is an open book for you to read when it comes to the legal issues involved in filing. This action step is a must: if you do not understand bankruptcy, even if you think you do, a lawyer protects you financially. If you are not eligible for Chapter 7 because you make too much money, a good lawyer can go over the advantages of Chapter 13. If, on the other hand, you are worried about losing your home, an experienced attorney can explain exemptions.
5-Know the Advantages and Disadvantages
Chapter 7 is best for discharging unsecured debts, monies owed for credit and medical. Chapter 13 is best for avoiding problems with secured debts, monies owed on your home and car. There are numerous more advantages. Keep reading and keep asking questions — those are the best action steps.
Creative Ways to Save Money Before, During, and After Bankruptcy
September 27, 2010
Texas bankruptcy can be a life saver, but decisions made before during, and after your bankruptcy can mean the difference between failure and success. Why file bankruptcy? Why not sell your home instead of filing? What can you do to cut down costs? Is listing expenses and cutting down going to be enough? Let’s find out.
Before Texas Bankruptcy
You can save money before bankruptcy and potentially avoid it altogether. Bankruptcy is not for everyone. If, for example, your only problem is a $2,000 credit card bill which you can’t pay on time, that is too small really to file, no matter your income. As bankruptcy will stay on your record and make it difficult to open new credit lines, it’s a tool to be used with care.
On the other hand, if you have debts you simply cannot pay in 3-5 years, bankruptcy is a solution. The size of your debt is important, but so is your current income. A general rule of thumb is to ask yourself if it’s worth it to pay back all these debts, if it’s possible. If you can save $50,000 by filing for Chapter 7 bankruptcy, it can literally change your life.
Should you file Chapter 7 or Chapter 13? That is a decision to make with a professional. If you owe a lot of secured debt, Chapter 13 can protect your assets. If you owe a lot in credit and medical, unsecured debts, Chapter 7 can discharge them.
During Texas Bankruptcy
You can save money during the bankruptcy as well. This is a time to see where you can spend money and what you can protect. For example, if you own a home, but your main problem is tens of thousands of credit card debt, you can file Chapter 7 in order to discharge that debt. You can then negotiate with either the lender or the bankruptcy trustee to keep paying on your home. In fact, if you can afford it, you can negotiate to keep just about everything, from a wedding ring to a car.
You can also save money on lawyer fees by looking over the market. This all depends on what you owe and how important the bankruptcy is to you. If you owe a lot and it’s legally complex, hiring a more experienced lawyer and paying his or her higher fee may be worth it. But if you have a simple bankruptcy filing, there is no reason to pay huge amounts. The goal is to query as many lawyers as possible, consult with those who offer free consultations and case reviews, and make a decision on one.
After Texas Bankruptcy
After you file bankruptcy, it’s time to look over your monthly bills and income. Some of this can seem fairly obvious: “don’t spend more than you make” and “never pay bills late.” But more often than not the same mistakes made prior to bankruptcy are made again.
The solution? Create a plan on paper and look at it every day. Perhaps take the credit card from a spouse or child who spends too much. These are psychological solutions; find something that stops you from paying things you simply can’t afford. If you get a bill in the mail, make it fulfilling to pay early. Instead of eating out while at work, start calculating savings by bringing sandwiches. And write down how much you save to reinforce these goals. Every month, with money you saved, you might spend some of the money on something not necessarily needed, but you want. As long as it keeps you out of the red.
5 Important Texas Bankruptcy Laws
September 24, 2010
Afraid of Texas bankruptcy? It’s understandable: bankruptcy is a life changing decision. If you’re unsure of how state laws differ, this blog guide gives a head start on understanding Texas bankruptcy laws. We’ll be going over 6 important bankruptcy laws unique to Texas and how you benefit from them.
Exemptions
Texas exemption laws depend on the value of your personal property. Single individuals can have property up to a value of $30,000. If you have a family, your exemption can be as high as $60,000. Texas laws mean the lien on your home, the rights a lender has on the property, are exclusive of these amounts, giving you the advantage. You also get exemptions on other assets, including cars, wages, home furnishings, foods, and much more.
Employment
If you are self employed, your wages are not exempt. But if you work for someone else, all your wages are exempt. If you’re self employed, 25% of your wages goes toward the cap. The cap depends on your income. These laws can be quite complex, and you may consider consulting with a financial consultant if you are self employed.
Your Income
Texas bankruptcy law protects your income from garnishment. Your wages cannot be taken from your employer during the bankruptcy. However, once you get paid, that money can be part of your bankruptcy. The law only protects the check from being taken via garnishment, which is powerful in and of itself.
Medical and Insurance
Any health aids you have are completely exempt, as is life insurance. Creditors cannot take money you have in a life insurance policy nor any medicine or device of any value intended to help you, your spouse, or your dependents.
Military
If you are in the military, you have some other exemptions. If the court decides your debt is in any way the result of your service, you can get property exemption for as long as you are in the military.
In order to best understand how Texas bankruptcy exemptions work, consulting with some local financial experts and a Texas bankruptcy attorney is advised. Texas is very unique in some of its exemptions, designed to protect home owners, individuals, and families from creditors. However, they only go so far. If you fear spiraling debt, foreclosure, or the loss of major assets, you should consult with a Texas attorney.
What do you look for in a lawyer? It does depend on price, but experience is more important. You want someone knowledgeable on Texas bankruptcy laws who can help you make decisions, protect assets, and protect your wages. There are some highly experienced Texas bankruptcy attorney’s across the state, but try to get one in your area.
Does Bankruptcy Always Hurt Your Credit Score and Relationships?
September 22, 2010
While bankruptcy is often considered negatively, it’s benefits should also be considered. First and foremost is the fact creditors do not always look down on filing bankruptcy. Why? This blog guide goes over how bankruptcy can both positively and negatively affect your relationship with creditors.
The Good
This may be controversial: bankruptcy can improve credit ratings. In the long run, it may in fact help you build a better credit score than you had. But the main point here is who will be issuing you credit. Put yourself in the creditor’s shoes: would you rather give credit to someone with $100,000 in debt, or someone who is working and recently discharged a large debt? The fact is, the one who filed bankruptcy may have more money available. You also may have learned your lesson, and want to rebuild your credit score by paying all bills on time.
So in other words, you may have a better chance of getting new credit lines after bankruptcy. It’s just commonsense.
The Bad
Not all creditors will look at your bankruptcy as a good thing. It does hurt your credit score, and if a creditor can choose between someone with perfect credit and terrible credit, the choice is obvious. Some lenders have more options, so they choose to give to the one with a better credit score. And remember that bankruptcy does affect your credit score, taking years to rebuild.
Other Benefits
While these are some controversial topics, for Texas home owners and residents filing bankruptcy is a clear solution. It can save you from either debts you can’t afford or protect assets you want to keep. A Texas Chapter 7 bankruptcy, the most common form of personal bankruptcy, can effectively give you the opportunity to get a fresh start, open up new credit lines, and save money. Chapter 13 mean paying via debt repayment plan, but the benefit here is you’re in a better financial situation to rebuild.
If You’re Unsure
You should not make key decisions via topics you read online, but hopefully this guide has given you some hope. If you’re unsure on how bankruptcy works, reading online guides is smart, but consulting with an experienced Texas bankruptcy attorney is your best option. You can find many experienced attorneys more than willing to explain the advantages of bankruptcy.
Listing All Debts In Texas Bankruptcy
September 20, 2010
Craig Andersen, a Minnesota bankruptcy attorney, explains the point of this blog post quite clearly with his title and opening sentence: “Just list the things you want to keep in bankruptcy.”
What does that mean? It means if you intend on keeping property, assets, money, and wages, you need to properly list them. The point is universal, and applies in Texas bankruptcy law. No matter which form of personal bankruptcy you file – Chapter 7 or Chapter 13 – you are required to list all your debts and assets. If you lie about this, you can be charged with perjury in court and bankruptcy fraud.
If you have an asset you want to keep, and hide it from Texas bankruptcy court, you can be charged with bankruptcy fraud, a very serious crime.
There are some advantages to listing all debts. Just listing an income or debt does not mean your bankruptcy will address it. For example, you might have a credit card debt you do not intend to pay on in your Chapter 13 bankruptcy. Be sure to still list it. Nothing is wrong with paying on it outside the bankruptcy, if not waiting until after the bankruptcy. There is no law that says you can’t pay on debts after bankruptcy, just as long as you list it.
What if you have a personal debt? Say you owe your former spouse $10,000. You should list this debt in your bankruptcy filing too. You have some options for repayment: you can pay your spouse voluntarily, outside the bankruptcy, or you can make a formal agreement to make regular payments. You might have a family doctor you owe money to and want to continue seeing. This debt can be paid off too by either voluntarily paying or making an agreement.
There are some big advantages to listing all your debts. Bankruptcy attorney Andersen points out the more you list, the more you keep. If you want to keep an asset like your car, for example, listing it almost always means you can keep the car. That’s something not talked about enough. Simply filing bankruptcy does not mean you’ll be broke, lose your home, have your car taken, and wages garnished. If you follow the laws, list all debts, you stand to have most assets be exempt under federal bankruptcy law.
Who can help with all this? You can help yourself by looking into all your records, listing all your assets, and making a completely honest bankruptcy filing. But in order to successfully discharge the most debt and protect the most assets, you need an experienced Texas bankruptcy lawyer. He or she can ensure you follow all laws, your property and assets are protected, and you can reap the most benefits of filing bankruptcy.
Personal Bankruptcy Solutions – Answers to 5 What If Scenarios
September 17, 2010
This FAQ asks questions likely on your mind when preparing for bankruptcy. Simply put, read these answers and get a better understanding of bankruptcy law.
What if you face foreclosure?
If you face foreclosure, you need to take immediate action. Texas home owners have options, as the homestead exemption is highly effective in protecting your home. But if you wait too long, you may lose the home. If you file early enough, you can make your home either part of your Chapter 13 bankruptcy or be able to afford paying it outside your Chapter 7 filing by discharging debt.
What if you have a job?
Filing bankruptcy rarely has much affect on your job situation, if only saving the money you make from being taken by creditors. If you file Chapter 7 bankruptcy, your money and assets can be part of the discharge, but in most cases filers lose nothing. When filing Chapter 13 bankruptcy, you need some source of income in order to fund the payment plans, so having a job is a big help.
What if you have no income?
In filing Chapter 7, if you make too much money, you may not be eligible. But obviously if you have no job – even if you are on limited disability of some kind – you are almost always eligible. In fact, making little to no money is an advantage in Chapter 7 bankruptcy. It does not work as well with Chapter 13. So if you have a job and a lot of assets you want to protect, Chapter 13 is better. If you make less money and have a lot of debts, Chapter 7 can be better.
What if you owe more than you can possibly pay?
The general rule here is if within several years time – say 3-5 years – you have no way of paying off your debts, it’s time to consider bankruptcy. And by bankruptcy, we are focused on Chapter 7. If you have a home, on the other hand, and have some income coming in, you may consider paying back your debts with Chapter 13 so you can keep your home and other assets.
What if you’re lawyer is bad?
The last “what if” is a common problem heard within bankruptcy circles. You hired the wrong lawyer. There is no legal obligation to keep him or her on your case. You have to pay up to the point they stopped working for you. If a lawyer is either taking no action to file your case, and charging you money for it, or is making some simple mistakes, there is no rule you can’t fire him or her. Move on, hire a more experienced, effective lawyer, and get a fresh start.
Stop Creditor Harassment by Filing Texas Bankruptcy
September 15, 2010
The phone rings one day and a voice says you owe $1,000. The next day, another phone call, this time from a rude individual explaining you owe $10,000 and legal action is being taken. The next day, more calls come, and you just want it to stop. While you have more options than bankruptcy, if debts are your problem and you have no means of paying them off, filing to discharge your debts is quite effective.
But when dealing with creditors before, during, and after bankruptcy, there are some rules they have to follow that can protect you from future harassment. Also, quite often your lawyer can stop the calls immediately. This guide explains how.
Creditors Must Follow Rules
Creditors cannot call you night and day. That breaks the law. If you are called before 8AM or after 9PM, that is illegal. Creditors can only call 8AM to 9PM Monday through Saturday. If they contact you outside these times, you can consult with a lawyer and consider suing and/or file bankruptcy. Also, if you are getting calls at work or creditors are threatening you, you can sue them.
How You Can Stop Creditor Harassment
There are some ways to stop creditor harassment other than bankruptcy. If you request in writing that the creditor stops contacting you, by law they must. If you are unsure of your rights here, consulting with a lawyer can help.
How Your Texas Lawyer Can Stop Creditor Harassment
If you are ready to discharge the debt – the main reason for the harassment – your Texas bankruptcy lawyer can stop these calls immediately and help eliminate the root problem. You can hire an experienced lawyer and he or she will be your voice to creditors. You no longer need to deal with creditors. If they break laws, you can sue. If they call, ask them to speak to your lawyer. There is no longer a need to call when you file bankruptcy. If you file, unless they appeal in the meeting of creditors, the harassment is over because the debt is discharged.
Discharging Your Debt
While filing bankruptcy simply to stop creditor harassment is unnecessary, filing for help has many advantages. Beyond stopping creditor phone calls, you can stop the problem at its source. If the debt is discharged in a Chapter 7 bankruptcy, you owe them nothing. If you file Chapter 13, you are paying them back some if not all the money. Chapter 7 takes only a matter of months, and can discharge most major debts including credit and medical. Chapter 13 protects your assets and buys you time to pay back debts. In both cases, the automatic stay begun by the bankruptcy judge stops all collections against you for several months.
Unemployment and Chapter 7 Bankruptcy
September 13, 2010
With almost 10% of U.S. citizens out of work, many living on unemployment, and still more being forced to take jobs that pay low, it may seem our financial crisis is just starting. It’s important to note unemployment has gone up since last year, but only by a few tenths of a percent. New initiatives are being created in order to support more small to midsized businesses who employ more workers than anyone.
But in order to ensure you are financially protected while unemployed, there are some guidelines to consider. If you are unemployed, can you afford bankruptcy? How does bankruptcy affect a new job? What if you or a loved one lacks medical coverage and is forced to go to the hospital for days if not weeks? Let’s find out.
Can you afford bankruptcy?
Bankruptcy is quite cheap in comparison to the benefits it offers. For all filers, including Texans, a Chapter 7 bankruptcy will only cost you $299. For Chapter 13, the court fee is $274. That is quite low. You can almost always find a way to make that payment, even if it means getting a loan. This is not a risky proposition: if you are eligible to file, you can discharge thousands in debt.
Do you need a lawyer? Can you afford him?
A lawyer, on the other hand, may be the most important part of your filing. A professional Texas bankruptcy lawyer is invaluable. If you cannot afford a lawyer, if it’s just impossible to pay the fee, you can try to file without one. You may have fights with creditors. You may not know how the court process works. If you fail, if your discharge never comes, it can put you into a much worse situation.
A Texas bankruptcy lawyer will not always charge high rates. This is not defending a criminal act. We are just talking about debts. It’s recommended you consider prices you can afford, then factor in experience. The rates are about $1,000 to $2,000 for a Chapter 7 or Chapter 13 bankruptcy.
What if you have a job?
If you have a job, and fear wage garnishments, you can save a lot of money by filing for Chapter 7 bankruptcy. By law, when you file bankruptcy a judge puts an automatic stay on all collections against you. That means your income will continue to come in.
3 Ways Bankruptcy Protects You
Bankruptcy protects you from creditors, protects you from having to pay impossible debts, and protects your assets such as your home from being taken. Bankruptcy is not a financially risky decision. It does have some affects on your credit and ability to get loans, but in both cases the truth is you can open new credit lines and get loans very soon.
Advantages of Chapter 7 Bankruptcy
If you are unemployed, Chapter 7 bankruptcy is highly effective. If you lack insurance and just received a $25,000 medical bill, if you lost your job and had to charge many basic expenses totaling thousands, and if you simply want a fresh start, bankruptcy can help.
6 Success Tips for Avoiding Foreclosure with Bankruptcy
September 10, 2010
Foreclosure is quite often the nightmare scenario. In reality, foreclosure can be avoided in many ways.
You can negotiate with your lender to get a better rate. You can sell the home to save your value in it, via a regular sale or short sale to pay off the debt. However, sometimes your lender will not negotiate a new payment plan. And you may not want to sell your home. You have one more good option: filing bankruptcy. This guide gives 6 success tips on keeping and protecting your home and income.
Get Financial Help
You may need to do far more than just file bankruptcy. Sometimes the problem is with your finances. For example, you may be paying some incredibly high interest rates on credit or medical bills. Some financial counseling may help you understand the advantages and disadvantages for both selling your home and filing bankruptcy.
Hire a Lawyer
The path to success is in hiring an experienced Texas bankruptcy lawyer. You have many options. You can save your home with bankruptcy, but which form? You have a home exemption in bankruptcy, but what are the rules? Texas bankruptcy laws are complex. A lawyer helps you save your home, save money, and protect other assets. The right lawyer with have both experience and a fair price.
Chapter 7 May Not Work
Unfortunately, Chapter 7 is more about saving money than saving homes. You have less legal protection here to stop a foreclosure because you are discharging debt and not paying on it. If your problem is credit card debt, Chapter 7 is smart. If your problem is your mortgage, Chapter 13 may be better. This is again where a lawyer can help.
Chapter 13 Can Help
Chapter 13 bankruptcy will likely be your best option. This is a debt repayment plan where you pay on debts instead of eliminating them. In legal terms you are still discharging debt, but by paying on it. If you file Texas Chapter 13 bankruptcy correctly and with the right lawyer, the judge will put an automatic stay on your money, assets, and home. This stops all collections against you, including foreclosure. If you file before foreclosure papers are filed, you can save your home. This is a crucial step.
Saving Money and Buying Time
On paper Chapter 7 is more about saving money because you are discharging debt. And yes, you can discharge a mortgage n Chapter 7, if you feel paying is impossible.
Chapter 13 can save you money too. If you put a lot of money into the home, that investment disappears in foreclosure. Also, you are buying yourself time to pay on debts, typically 3-5 years.
Filing at the Right Time
Filing bankruptcy at the right time is crucial. Time is never more important than in foreclosure. For success, hire an experienced Texas bankruptcy lawyer, consult with him or her on your options for protecting the home, and then file as soon as possible. Remember, if you wait too long, you may run into some problems, such as being unable to stop the foreclosure.
Texas Chapter 7 Bankruptcy – Timing and When You Should File
September 8, 2010
Filing Chapter 7 bankruptcy may be a scary proposition. It’s not news: you can literally saves tens of thousands of dollars.
It’s also true that there are some reasons not to file. For one, some people look at bankruptcy the wrong way. If you file because of overspending, then continue, you may be stuck in financial problems again.
On the other hand, sometimes avoiding bankruptcy is a big mistake. Filing may seem like biting the bullet – giving everything you have away – but that too is the wrong mindset to have. If you file Chapter 7 bankruptcy at the right time and for the right reason, you are taking advantage of a legal right given to you. Just as you are allowed to vote, you are allowed to file bankruptcy.
When should you file Chapter 7 bankruptcy?
This is a very common question, and the answer can be different for each person. However, we at Higgins & Associates advise you to file when it best serves your interests. If you have no way of paying back your debts in a 3-5 year period, Chapter 7 is smart. If you are only able to pay the interest on credit card debt, again it’s smart. Since no two situations are the same, consult with a lawyer. It may actually be better for you to file Chapter 13 bankruptcy to save your Texas home or nonexempt assets from foreclosure and creditors.
Why is timing important?
Timing is critical in filing any form of personal bankruptcy. With Chapter 13, if you file before foreclosure papers are filed on your home, you have just increased your chances of saving your home. On the other hand, if you have been getting ten or more creditor calls a day, if every day is more bills, and if you fear you will lose everything, Chapter 7 is smart.
Sometimes you want to wait to file. If you are expecting a large bill to come in the mail, such as a medical bill you have no way of paying, you should likely wait after consulting with a lawyer. If you make too much money, but just lost your job, waiting may be required in order to be eligible for Chapter 7 bankruptcy. Remember that Chapter 7 is dependent on how much you make in the past six months in comparison to the Texas median income. If you have a high income for some time, then no income, once you’re average for six months is below the Texas average, you can file Chapter 7.
Getting Legal Expertise
These decisions are all unique based on your situation. If you are making a plan for filing, include a lawyer in your strategy. He or she can be invaluable in protecting your assets, saving you money, and getting a fresh start financially.
Preparing for After
You can be free of huge debts hanging over your head. Yes, filing bankruptcy more than once is allowed, but with Chapter 7 you have to wait 8 years. That means you have to manage your money as best you can in that time. But it’s much easier without tens of thousands in debt and creditors calling every day.