6 Myths on Chapter 13 Bankruptcy for Texas Residents
August 27, 2010
All too often, we hear one bad review of a movie, book, or show and decide not to go with it. This too happens with bankruptcy. Bankruptcy law is very complex on paper, but many myths can be dispelled. This blog guide focuses on myths involving Texas Chapter 13 bankruptcy
Myth, You Have to Be Broke
You do not have to be broke at all to file bankruptcy. In fact, you want more money if you file Chapter 13. If you have no money, Chapter 7 is a much better option, and you will likely be eligible unless you make a lot. But in Chapter 13, you need only prove you need legal protection for property and assets. The point is that you are paying on debts; you can have some money or lots of money and still file. You can stop the problem months before it become a financial collapse, at a time when you have more money but know it won’t last.
Myth, You Will Lose Your Home
Chapter 13 bankruptcy puts an automatic stay on all collections and foreclosures. There is some truth here, as you might lose your home. If you cannot pay on the home, or if you wait too long, you may lose it to foreclosure. An automatic stay stops collections for several months, but it cannot stop a foreclosure started before you filed. What it can do is provide you months protection, then give you the opportunity to repay the debt in manageable installments if you file early enough.
Myth, Spending Retirement Savings or 401K is Better
Spending your nest egg is a bad idea. You are only buying yourself a few months to a years time when you can stop the problem at its source. If you have no money at all, Chapter 7 may better discharge your debts. If you are working and have some income, Chapter 13 makes it so you can afford to make some reasonable payments.
Myth, Your Credit Will be Ruined
Your credit will be hurt, not ruined. You can rebuild it. If everyone in Texas who filed bankruptcy could no longer buy a car, rent an apartment, buy a home, or get a student loan, there would be some big problems. Yes, you may have some high interest rates, you may get turned down a few times. The trick is to continue trying until you get results.
Myth, Creditors Will Stop the Bankruptcy
Your creditors do have rights. They can ask for a lift of an automatic stay. But in Chapter 7, they rarely have much say. In Chapter 13, they are getting the majority of the money owed them, if not all. As long as you stay within Texas bankruptcy law, you will be fine.
Myth, Lawyers Always Overcharge You
Bankruptcy lawyers charge some of the lowest rates in the business. You get charged with a felony, a good lawyer will cost you a lot of money. In bankruptcy, you are filing because you lack proper funds, not because you are rich. Therefore, lawyers charge minimal rates. The good ones may charge more, but when you compare it to the benefits of a successful Chapter 13 filing, such as stopping a foreclosure, it’s more than worth it.
How Much Does a Texas Bankruptcy Lawyer Cost?
June 23, 2010
Finding a lawyer is tough enough, but actually paying a Texas lawyer with experience can sometimes be difficult. You are filing bankruptcy to save money and assets, not spend money and lose assets. Sometimes you may think hiring a lawyer is not feasible. In all cases, it’s more than worth it, and they may charge less and save more than you might think.
What? A bankruptcy lawyer saves you money? Yes, but you need to hire the right one first.
How to Hire a Texas Bankruptcy Lawyer
Looking online may seem risky, but even though many lawyers have no website, it does not mean the ones who do are any less experienced. In fact, you can look directly at this experience online 24/7. Some have blogs like this one, some show their relevant experience, and most will give you a ball park estimate on how much you will have to pay in order to file for bankruptcy.
How much does Texas bankruptcy cost?
Technically, the only differences between a Texas bankruptcy and one from another state is in terms of eligibility, lawyers, and what court you file with. Most of the rest is very similar, as bankruptcy is a federal code, not solely state run.
Let’s get back to the main point. A Chapter 7 bankruptcy will cost you $299 to file with the court, and the average Texas lawyer will charge you about $1,000-$2,500 for this bankruptcy. There are some big differences in those price ranges – some lawyers go lower still and some even go higher – but it depends on the actual complexity of your case. So if you hired a Texas lawyer for Chapter 7 bankruptcy, it might cost you a total of $1,800 to file. Now, look at the benefits of Chapter 7. You can discharge the majority of your debts, including tens of thousands in medical, credit card, and mortgage debt. If you are considering bankruptcy, you likely cannot afford to pay on all or at least some of these debts. The more you owe, the bigger the benefit. If you can discharge $10,000 for a fraction of that, the benefits are quite obvious.
If you file Texas Chapter 13 bankruptcy, the court fee is $274 with the court, and about the same amount of lawyer fees, ranging from $1,000-$2,500. Now, in this case you are not eliminating your debts; you’re paying on them in an affordable manner over 3-5 years. So it might cost you $2,000 to file Chapter 13 and hire an experienced Texas lawyer, but once you see the benefits the value is clear. If you fear your home is going into foreclosure, a property worth $100,000 with a mortgage you’ve been paying on for years, with Chapter 13 you can stop any foreclosure proceedings before it even reaches court. You can also create a payment plan for other debts, such as credit and medical, over a longer and more affordable period.
So we got some ball park estimates on filing for bankruptcy. While not cheap, think of filing bankruptcy in any form as putting money in the bank, not taking some out. And think of your Texas bankruptcy lawyer not as someone who you write checks, but as someone who can help save your home and save you money.
Filing Dallas Chapter 13 Bankruptcy
June 19, 2010
If you file bankruptcy in Dallas Texas, you would go to the Northern District of Texas. But before you do, there are some things about filing Dallas bankruptcy you should know, especially if you plan on filing for Chapter 13. This post can help.
Eligibility for Texas Chapter 7
You may also be eligible for Chapter 7 bankruptcy. Most all citizens are eligible for Chapter 13, unless you have hundreds of thousands in debt. If you want to file Chapter 7, you must be be below the median income for the state. Here are the numbers.
1 Person – Annual Income Less Than $38,801
Family of 2 – Annual Income of Less than $55,660
Family of 3 – Annual Income of Less Than $59,011
Family of 4 – Annual Income of Less than $66,145
Add $7,500 in most cases per any additional family members.
If you make less than these numbers, you may consider filing Chapter 7. It can be very helpful in cases where you have a lot of debt you simply cannot afford, such as credit, medical, and mortgage debt.
Why Chapter 13?
If you’re a Dallas resident considering personal bankruptcy, you may wonder why you would not choose Chapter 7. Clearly this form can help in ways Chapter 13 cannot. In some cases you are not eligible. In others, you do not want to lose your home. Dallas Chapter 13 puts into motion a plan for keeping all your assets. If you fear foreclosure on your home, Chapter 13 is a far better option in most cases (though you can set up a payment plan for your home with Chapter 7 by working with your trustee). What happens is the moment you file, a judge will put an “automatic stay” on your home, stopping any foreclosure proceedings. If you file early enough, before the papers are filed, you don’t just stall the foreclosure: you can completely stop it.
Also, if your problem isn’t credit or medical debt, Chapter 13 can be easier. It’s a 3-5 year plan where you pay back debts, but these are designed to be affordable. If you have no job and little to no income coming in, Chapter 7 is better. If you have a job and some income, a Chapter 13 debt repayment plan can be very beneficial. It just depends on the kind of debts and assets you have.
How do you file?
You typically hire an attorney first, then file with the court. The fee for filing Chapter 13 bankruptcy is nominal, $274. Lawyer fees cost more, but are designed to be affordable. After all, you’re not filing bankruptcy because you’re rich. Most Texas bankruptcy lawyers charge from $1,000 to $2,500 to handle a case. This comes with many benefits. They can help you fill out documentation, successfully submit to the court, represent you in court, help with your debt repayment plan, stop creditor harassment, give tips on keeping all your assets including your home, and also advise you on how to avoid future bankruptcy.
The First Step
Are you ready to file for Chapter 13 bankruptcy? Unsure if it’s right for you? It takes some time to make the decision. The important thing is to not make it alone. You can consult with an experienced Dallas bankruptcy attorney today to see if Chapter 13 is best for you.
How Much Will Texas Chapter 13 Cost
June 3, 2010
Texas Chapter 13 bankruptcy is very advantageous, but not your only solution. Actually, more file Chapter 7 bankruptcy than Chapter 13, about 3 in 4 filing with the former. However, Chapter 13 bankruptcy has some clear advantages, especially if you make enough money.
1-Most are eligible for Chapter 13, with only hundreds of thousands in debt stopping some from filing.
2-You can save your home from foreclosure.
3-You can keep other assets.
4-You can rework bills so you can afford them.
5-You can avoid wage garnishments.
6-Filing is cheap.
How much does filing really cost? Actual court costs are $299 for Chapter 7 and $274 for Chapter 13. If you file jointly with a spouse, that’s a one time fee to pay the local Texas court.
You should also consider hiring an experienced Texas bankruptcy attorney. Hiring one has many advantages.
1-Save time in filing.
2-Correctly file with court.
3-You can get counsel on whether you should choose Chapter 7 or Chapter 13.
4-An attorney can stop all creditor harassment
5-An attorney can help save your home from foreclosure.
6-And an attorney can save you money by helping to keep other important assets like your car.
How much does it cost to hire an experienced attorney? For Texas bankruptcy, the rates vary depending on the case. Chapter 13 is a longer process than Chapter 7, but once you appear in court, the plan is accepted, and you start paying debt, it’s very simple. An experienced attorney will charge from $1,000-$2,000 in most cases to help you with bankruptcy. If your case is more complex, it may require added time.
Chapter 13 bankruptcy can save you money in many ways. If you have been paying on a home for years, and you’ve kept it up, all that time and money could mean nothing if foreclosure goes through. It’s the same with other assets, such as your car. If you make too much money, you can’t discharge debts with Chapter 7. But Chapter 13 allows people who make more if not much more money to rework how they pay back debts.
The process takes 3-5 years, but it’s more than worth it. Act now if you fear foreclosure, as by federal law if the foreclosure is begun, you cannot stop it. Hire an experienced bankruptcy attorney in your area of Texas today.
What is Texas Joint Bankruptcy?
May 24, 2010
If you’re interested in filing joint bankruptcy, it’s time to call an experienced attorney. Why? Joint bankruptcy is different from traditional bankruptcy, and has different laws. This post, however, is a very good start on learning the basics.
What is Texas joint bankruptcy?
In Texas, the laws are a bit different as it is in each state, namely via consideration of eligibility. Depending on your family size, if you want to file under Chapter 7 you must meet eligibility requirements. If not, you can file Chapter 13. We’ll go over both in this piece.
Here are the current median incomes for Texas.
1 person – $38,801
2 Person Family – $55,660
3 Person Family – $59,011
4 Person Family – $66, 145
If you have a larger family, the rates increase.
What is Chapter 7 joint bankruptcy?
Chapter 7 is a liquidation proceeding where you discharge debts. That means, on paper, you will be eliminating the majority of your debts –such as credit card, mortgage, and medical bills — and getting a fresh start. For joint bankruptcy, filing together can save you some time and money. If you file together, all your joint debts are eliminated. However, if you choose not to file with your spouse, you can. The spouse will still be responsible for his or her debts in this instance.
Filing jointly is a very simple process an experienced Texas bankruptcy attorney can help with. Not only can you save time and eliminate debts, but the filing fee, which is $299, will only occur once (small, but it’s money). You can also save time on paperwork.
If on the other hand you are recently divorced, you may want to go it alone and let the former spouse handle his or her debts separately. This can be problematic if the divorce and financial considerations are not resolved.
If you want to file joint Chapter 13 bankruptcy, you must first meet federal eligibility requirements, which allow most everyone to file unless you have hundreds of thousands in debt (in that case, you definitely need to contact a lawyer for some expert help). Chapter 13 bankruptcy does not discharge debts, but if for example you just lost your job and the spouse is paying the majority of bills, it can be considered to buy you extra time to find more work.
What are the advantages of each bankruptcy?
Advantages of Chapter 7
-Discharge the majority of your debts.
-You have the option to file jointly or individually.
Advantages of Chapter 13
-You can rework your bills so you can afford them.
-You can file together and stop a home foreclosure.
There are disadvantages to filing bankruptcy in the first place, such as being on your record for up to 10 years. Also, if you or your spouse is fine and needs no bankruptcy, jointly filing will be on the credit report.
In the end, filing Texas joint bankruptcy requires the expertise of an experienced attorney who can go over the details of your case and offer advice.
6 Myths of Bankruptcy
May 19, 2010
Filing bankruptcy ruins your credit … you’ll never be able to get a credit card or loan again … and your possessions will all be taken.
Or: your debts will all fly away, your home will be safe no matter how far behind on payments you are, and your credit will improve.
With some creativity, you likely could come up with your own common “myths” of bankruptcy. But there is nothing wrong with mistaking the benefits and negatives of filing bankruptcy. These are all common online.
This posts shows you 6 myths you no longer need to believe. Some you may know, but read on, because some may surprise you.
1-You’ll Lose Everything
In most Chapter 7 bankruptcy cases, actually over 90 percent, you lose absolutely no assets. And the point of Chapter 13 bankruptcy is that you pay over an extended period so you lose nothing. The myth is that you 1) will lose your home and car and 2) you won’t be able to get them back. In fact, if you work with a trustee in the rare case you might lose something, you can negotiate to keep items such as your car. With Chapter 13, you can put an automatic stay on your home and stop any foreclosure proceedings if you are not too far behind.
2-You’ll Eliminate All Debt
Taxes, alimony, and child support cannot be eliminated. And with Chapter 13 bankruptcy, you are paying back everything, just typically over an extended period of time. Chapter 7 bankruptcy can eliminate credit, medical, and mortgage debt.
3-You won’t have to pay on your house
You still have to stay current on your home in order for the bankruptcy to work out. For instance, if you file Chapter 7, you can eliminate that debt, but you’ll lose the house. With Chapter 13, you must stay current on the mortgage or you’ll lose it.
4-Credit cards will no longer be an option
Let’s get back to the positives. Bankruptcy will stay on your credit report for, in most cases, 10 years. However, you will still get many offers for credit cards and you will have the opportunity to rebuild your credit. The interest rates on the credit cards may be high, but if you stay up on them it can be beneficial in rebuilding your credit.
5-Filing Bankruptcy Will Improve Credit Scores
Just because you eliminate debts with bankruptcy does not mean you get a clean slate. As noted above, a bankruptcy will show up on your credit report for 10 years. It’s not going to ruin you, but it certainly won’t improve your credit.
6-You won’t be able to make large purchases
You can still make purchases. Just because you file bankruptcy does not mean all options are off the table. You can still get credit cards, loans, and buy properties. You may have to work on rebuilding your credit, but if everyone who filed bankruptcy could never make a large purchase again there would be far less car and home owners.
Common Questions on Chapter 7 Bankruptcy in Texas
May 12, 2010
There are are many important questions when it comes to filing personal bankruptcy, so here on Higgins and Associates Texas law blog, we’ll be answering common questions.
For this post, let’s focus on Chapter 7 bankruptcy. What it is; how much it costs with lawyer fees; what you need to do to file; if you’re eligible, and more.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is the most common form of bankruptcy for filers who want to eliminate debt. You will file with the courts, usually and preferably with the help of a lawyer, and a trustee will be appointed. A “trustee” is someone who handles the liquidation of any nonexempt assets. Your car or some other asset may be worth more.
Do you always lose assets with Chapter 7 bankruptcy?
One of the disadvantages of Chapter 7 is that you may lose some assets. In bankruptcy, the less you have the less you lose. If you are jobless, rent an apartment, and have few assets, in most cases you lose nothing. There are many other ways where you lose nothing, even if you have a job, home and assets. In fact, most bankruptcy filers, of all situations and various income levels, typically lose nothing by filing. If your assets are valued too high, you might file under Chapter 13.
What is the difference with Chapter 13?
Chapter 13 is a debt repayment plan; you don’t discharge debts, you pay them back over time. Chapter 7 means you discharge (eliminate) many forms of debt. So you pay with Chapter 13, and not with Chapter 7. However, if you make a lot of money and/or have many assets, Chapter 13 lets you keep them.
What are the advantages?
We kind of pointed out how Chapter 7 can discharge debts, but what debts? You can discharge mortgage, credit card, and medical bills. You can’t discharge taxes, alimony, and child support. If you have thousands in credit card debt, Chapter 7 is a very good option. It should be noted, you can eliminate mortgage debt, but you will lose your home in this case unless you can pay it.
Are you eligible for Texas Chapter 7 bankruptcy?
In order to file Chapter 7 bankruptcy, you must be eligible. In order to be eligible, you need to be below the median income for households in Texas.
Texas Median Income
1 Person Family – Annual Income $38,801
2 Person Family – Annual Income 55,660
3 Person Family – Annual Income $59,011
4 Person Family – Annual Income $66,145
And it goes up if you have larger families than this. If you make too much, under new Bankruptcy Code you can still file Chapter 13. Chapter 13 has definite advantages that an experience Texas bankruptcy attorney can help you with.
How much does it cost?
Chapter 7 bankruptcy costs $299 and Chapter 13 $274, in any state including Texas. Lawyer fees can range in variety, but typically are from $1,000-$2,000. Higher price does not always mean they’re an expert. Be thorough in reviewing bankruptcy lawyers.
Who should you hire?
You have all the answers you need but one: who should you hire? A Texas bankruptcy lawyer helps you fill out documentation, claim exemptions, stop creditor harassment, and gives you a fresh start financially. Hire a lawyer who cares about his or her clients, who has the time to handle your case, specializes in personal bankruptcy, and has a fair price.
Dallas Bankruptcy Process — What to Expect at Your Bankruptcy Consultation
June 2, 2009
What should you expect when you come to Higgins and Associates for your Bankruptcy Consultation? This short video explains the bankruptcy process for people filing bankruptcy in Dallas Fort Worth.
What is the role of the filed attorney in a chapter 13 case?
March 28, 2008
The filed attorney performs the following functions in a typical chapter 13 case:
- Examining the filed financial situation and determining whether chapter 13 is a feasible alternative for the debtor, and if so, whether a single or a joint case should be filed.
- Assisting the debtor in the preparation of a budget
- Examining the liens or security interests of secured creditors to ascertain their validity or avoidability, and taking the legal steps necessary to protect the filed interest in such matters.
- Devising and implementing methods of dealing with secured creditors.
- Assisting the debtor in devising a chapter 13 plan that meets the needs of the debtor and is acceptable to the court.
- Preparing the necessary pleadings and chapter 13 forms.
- Filing the chapter 13 forms and pleadings with the court and paying, or providing for the payment of, the filing fee.
- Attending the meeting of creditors, the confirmation hearing, and any other court hearings required in the case.
- Assisting the debtor in obtaining court approval of a chapter 13 plan.
- Checking the claims filed in the case, filing objections to improper claims, and attending court hearings thereon.
- Assisting the debtor in overcoming any legal obstacles that may arise during the course of the case.
- Assisting the debtor in obtaining a discharge upon the completion or termination of the plan.
The fee charged by an attorney for representing a debtor in a chapter 13 case must be reviewed and approved by the bankruptcy court. This rule is followed whether the fee is paid to the attorney prior to or after the filing of the case, and whether it is paid to the attorney directly by the debtor or by the chapter 13 trustee. The court will approve only a fee that it finds to be reasonable.
May a self-employed person file under chapter 13?
March 28, 2008
Yes. A self-employed person meeting the eligibility requirements listed in the answer to Question 18 above may file under chapter 13. A debtor engaged in business may continue to operate the business during the chapter 13 case.