However, debt consolidation companies are a mistake because you have no legal protection and you’re paying them to do what can be done by yourself. They are also becoming less and less honest.

You can in fact buy a new home and car again after filing bankruptcy; maybe not the next month, but soon. If you rebuild your credit, you can buy a new car too. You just may have high interest rates.

Finally, credit counseling is good, and bankruptcy requires you to take it. But learning how to save and spend money only matters after you have discharged debt. If you owe $20,000, credit counseling will not absolve you of this debt, only help with the strategy in discharging it (which then requires bankruptcy).

Now, the best person to help you successfully file bankruptcy, discharge your debts, protect your assets, and understand the process is a Texas bankruptcy lawyer. While many discount how bankruptcy works, a professional lawyer can explain whether it’s right for you.

Eligibility
In order to be eligible for Chapter 7 bankruptcy, in all 50 states you must take the means test. The means test determines if you make too much money to file. Also, if you filed Chapter 7 less than 8 years ago, you have to wait until the time you reach a full 8 years. Though second bankruptcies are not common, they do occur.

Your income as a Texas resident is how you will be considered for Chapter 7. The means test shows the current income for an individual or family on average across the state. If you make less than the average person makes, you are eligible. If you make more, you are not. A lawyer can be invaluable in helping you determine eligibility.

Documents and Proof
In order to successfully file bankruptcy, there is a lot of paperwork. A good Texas bankruptcy lawyer can help you fill out the proper documents, show proof of eligibility, show what income you have, and then show what debts you are eligible to have discharged.

Discharge Major Debts
Chapter 7 bankruptcy is not just you standing in front of a judge asking for a second chance. An experienced Texas bankruptcy lawyer is invaluable in filling out documents, handling creditors, protecting your rights, and being your voice in court.

If You’re Not Eligible
If you’re not eligible for a Chapter 7 bankruptcy, a professional Texas bankruptcy lawyer can best explain your options. Sometimes you may be eligible if you wait a few months. For example, you might have recently lost a high paying job, have a $25,000 debt, and because you were making so much you cannot discharge this debt. But, if you waited long enough to where your past six months income is less than average, not difficult if you have little to no money coming in, you can become eligible again. There are many legal tricks for doing this, just like in protecting your assets.

Protecting Property and Assets
It’s rare to have nothing of value we cannot afford to lose. You may have a car to get you from the home to work. A home you spent $50,000 rebuilding and renovating. These are understandably important to you.

A good bankruptcy lawyer can help you protect them. It may in fact be in your best interest to file for Chapter 13 bankruptcy if you have a lot of property and assets to protect. The best part about a good lawyer is that you can ask as many questions as you want. There is no limit.

Often enough, you lose nothing by filing for help. Yes, there is a chance you might lose some things. But what bankruptcy does is protect you.

How does filing bankruptcy in Texas protect you?

Home Protection in Bankruptcy
In the state of Texas, the homestead exemption protects your home. The laws on the Texas homestead exemption are some of the best in the country. But they do require some legal help as no two situations are exactly the same.

Personal property is different: you can own up to $30,000 worth as an individual or $60,000 as a family. But a bankruptcy will protect your home from being taken if you file at the right time, with the right lawyer, and with the proper guidance.

In a Chapter 13 bankruptcy, you are not giving up on your debts, and your assets can fall within the debt discharge plan lasting 3-5 years.  technically your assets can be sold by filing Chapter 7, but you have many options to protect them, including the homestead exemption.

Car Protection in Bankruptcy
First, by filing bankruptcy successfully a bankruptcy judge will put an automatic hold on all collections. This includes for your home, any medical or credit debts you might owe, and your car. They cannot take your car for some time. If you can somehow work the payments for the car into your budget, you can protect it even in a Chapter 7 bankruptcy. If on the other hand you are filing Chapter 13, you are paying on the car in installments, and you have legal protection.

Credit Card Debt
As just noted, collections against you will be put on hold for some months after filing Texas bankruptcy. Creditor harassment may entirely stop. This is likely the best news of the day.

If you file Chapter 7 bankruptcy, credit card debt falls within the debt which can be discharged. There are some laws to know. You cannot just spend thousands of dollars before filing and expect that to be discharged. But if you have a credit card debt you simply cannot pay, a common reason for filing, Chapter 7 bankruptcy can discharge it.

Credit card debt is not the most common culprit in filing bankruptcy in Texas. No, the most common reason is medical bills. These too fall within the guidelines of a Chapter 7 discharge. Even a two week stay can lead to tens of thousands in medical debt. If you’re eligible for bankruptcy, you can discharge it.

Lawyer Expertise
Should you file Chapter 7 or Chapter 13 bankruptcy? How does the homestead exemption work? What debts can be discharged? A lawyer is invaluable when you are filing. Simply put, he or she may be your best protection. An experienced Texas bankruptcy lawyer can ensure you fill out all documents correctly, that you are indeed eligible for bankruptcy, that your assets are protected, and that all your debt is discharged.

There are many scenarios where filing bankruptcy is best for you and your family. This guide gives you 4 benefits of filing for protection by using Chapter 7 or Chapter 13 bankruptcy.

You Can Have a Job
The Texas income levels do matter in Chapter 7 bankruptcy, but you are often well within the annual income levels. The means test looks at the past six months: how much you made, and how much a family of your size made on average in Texas. If you are below, you can file Chapter 7. If you are over, you might be able to wait until your income lowers, or you can file Chapter 13. If you just lost a job, it may take a few months wait before your income is low enough.

What are the income limits in Texas? For one person, the limit is $38,801. For a family of two, $55,660; three is $59,011; four is $66,145; and if you have a larger family, the income limits continue to grow. So you can often have a job and still file.

Bankruptcy Protects Your Home
Chapter 13 bankruptcy best protects your home, but in Texas, the homestead exemption in filing bankruptcy has no limit. You can only have so much personal property, but the exemption can protect your home. If you fear a foreclosure is coming, by filing for bankruptcy you buy yourself time to catch up; a judge will put an automatic stay which in effect stops all collections for several months. This can give you some legal protection. The important thing is to file before foreclosure is begun.

It Protects Your Assets and Car
You can have personal property up to $30,000. You can also work out a fair rate on your car. Even though technically you can lose a car in Chapter 7 bankruptcy, most lose nothing when they file. For families with only one car, keeping it is very important. You can pay on it outside the bankruptcy or pay installments within the bankruptcy. This depends on how much you owe on the car.

Texas Bankruptcy Can Save You Tens of Thousands
For families, perhaps the biggest fear is a son or daughter getting hurt in a car accident or to simply come down with a major illness. What is sometimes forgotten in the moment is the costs involved if you have no insurance. For families nationwide, having no medical coverage is a reality. But there is good news: Chapter 7 bankruptcy can discharge the entire debt. You can also use it to discharge family credit debt.

Creditor Harassment
While the phone can be a bearer of good news, it can also be one of bad news. You owe this much money. You get a call every day or every other day on it. Then a new creditor starts calling. Then you get even more calls off shut off notices and threats. This can be stopped outside bankruptcy, but by filing you are ensuring creditor harassment will stop. Creditors have no more reason to call you. And if they do, refer them to your lawyer.

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.

The mistakes made are not because of a lack of understanding on bankruptcy law, but general commonsense. Commonsense is about saving, not spending. And this brings us to common mistakes: spending savings, cashing out 401Ks, or tapping into a retirement fund rather than filing bankruptcy.

Why not spend your savings?
You can spend your savings. You may think it’s okay to do this before you file bankruptcy, or as a means of avoiding bankruptcy in the first place. This is wrong. Spending your savings only buys you a few months time. You might as well save the money. In a Chapter 13 filing, you need disposable income. In Chapter 7, your assets are liquidated, but most commonly Texans lose nothing in terms of money, property, or other assets.

Why not spend your 401K?
A 401K is not a fallback for avoiding bankruptcy. Just like spending your savings, it buys you months, or maybe a year, and then you are in the same position but with future money problems guaranteed. Bankruptcy is not a bad thing. Many in Texas file because it’s the right decision. Many cash out 401Ks thinking they can make the money back later. It may not be your plan, but an earlier bankruptcy instead of a later one puts you in a better position financially.

Spending Other Retirement Money
Retirement money is for retirement. Yes, if you have an incredible emergency, sometimes you do have to borrow against the future. But that puts you in danger financially.

Not Waiting to File Bankruptcy
The real decision to make is to stop the delays and consult with some legal experts. It’s recommended you consult with a lawyer, do some of your own research, and go over your finances. Bankruptcy may in fact not be your best option. But if it comes between spending money you will need later or spending it now, the obvious choice is to protect your future.

Texas Bankruptcy Help
Filing bankruptcy is not your only option. But thousands of Texas use it for the right reason: financial protection and debt discharge. A Chapter 7 bankruptcy may protect you from falling into impossible debt; delaying a Chapter 7 filing is rarely smart. A Chapter 13 bankruptcy may in fact need some funds to be possible, but it can protect your assets much better. In both Chapter 7 and Chapter 13, filing for help starts by asking for help. Don’t take the easy way out, nor make your decision based on one person. Consult with some legal and financial experts, the ones you pay because they have experience.

But sometimes bankruptcy is the very best choice to make. Bankruptcy has some major advantages. And the right Arlington bankruptcy lawyer can protect your income, your assets, your home, and your future.

When is bankruptcy right?
Bankruptcy is the right decision to make when you simply have no other debt reduction options. You may owe far too much money that, even with some time to save, you simply have no chance of making due on. Or you may have some income, some valuable property, but are facing foreclosure or about to tap into your retirement savings. These situations call for bankruptcy.

Which bankruptcy?
Chapter 7 bankruptcy may be your best option when you simply cannot pay on debts. This form of filing gives you fresh start financially. It’s the most common form of bankruptcy in Arlington Texas, simply because it has a lasting and positive impact on your economic situation.

If you feel you do have a  chance of paying this debt off and you have a lot of assets, Chapter 13 bankruptcy may best. If you want to protect your Arlington home from foreclosure, it’s a very good option. Many home owners go into bankruptcy knowing they are in danger. But the problem is waiting too long to act. If you can contact a Arlington lawyer, file the Chapter 13 papers, you can stop a foreclosure from occurring as long as you can make payments on the home.

If you have no money at all, Chapter 7 may be best. If you simply have too many debts, again Chapter 7 may be best. On the other hand, if you have a valuable home or one you simply want to keep at all costs, Chapter 13 can protect it. If you have other valuable assets, and you have enough of an income, again Chapter 13 may be best.

Should you spend retirement money?
Some avoid bankruptcy at all costs. They spend money they really shouldn’t. Then foreclosure papers are filed, wage garnishments are made, and retirement savings or 401Ks go down the drain. This is a terrible way to stay solvent. The best choice is to protect this money. If you you use this money, how long does it buy you? Is 3 months of breathing space enough to spend your 401K? The bottom line is your home, wages, savings, and retirement plans should be protected.

It Will Cost Too Much …
Not filing bankruptcy will cost you much more than filing. When you compare the numbers, you can discharge tens of thousands for thousands. You can protect a $100,000 home from foreclosure. You can stop a wage garnishment from cutting your paycheck in half. You hire an Arlington bankruptcy lawyer because he or she helps your bottom line, does not cost you everything. The good news is, an experienced bankruptcy lawyer is willing to fight to protect you, your family, and your assets.

Why delay filing?
The biggest reason to delay filing is to protect your property from being taken. If you transferred money or property to someone else, then went ahead and filed for bankruptcy, it will rarely work out. You need to delay this decision. What happens is the trustee can void this step. If you transfer property within one year of filing in order to protect it from creditors, by law this can be stopped. It makes sense: if you could just transfer a home or car to another person, then file bankruptcy, it would be  loophole in the system.

There are some other reasons to delay your filing, namely if you expect some new bills to arrive. You may be expecting a large hospital bill, for example, and want to have this discharged along with your bankruptcy. This, when within the laws, is allowed.

In either case, you should consult with your bankruptcy lawyer.

What about exemptions?
You want as much of your property to be exempt from the bankruptcy as possible. This is logical, but not always easy. However, it’s more than worth investing the time into learning. Many of your assets will in fact be exempt from being part of your discharge. You want to ensure you can claim the homestead exemption, for example, which can help you keep your property. If you are not eligible for a homestead exemption, it’s possible you may lose your home.  State laws differ on this. Texas laws are in fact some of the best in protecting your home; you have no dollar amount limit,and your property can be quite large and still be eligible.

What if you have questions?
As you can see with the laws for the homestead exemption, this can be complex. It’s natural not to understand all of it. The good news is that these laws are designed to protect, not to take. If you are unsure of when is the best time for you to file, or on how to protect your assets, it’s time to consult with a Texas bankruptcy attorney.

Why is it allowed?
The automatic stay is allowed for economic downturns we have in our country. Just as the stock market adapts to market changes in safer ways than a century ago, consumer debt protection is designed to help those who are in danger of losing everything. In other words, it’s a benefit of how our economy has evolved to better help consumers. If there were no automatic stay then foreclosures, repossessions, credit card debt, and other debts would ruin thousands of lives every year.

What can the automatic stay protect in Dallas Bankruptcy?
Perhaps most importantly, the automatic stay can protect you from foreclosure. If you are filing Dallas Chapter 7 bankruptcy, you can buy yourself time to get a new residence. However, by filing Chapter 7, you are in danger of losing the home. Chapter 13 bankruptcy may be better for Dallas residents, as you have the chance to save your home from foreclosure.

You can also stop utility disconnections for a minimum of 20 days. If you are in over your head with bills, keeping your power on can make it possible to stay in your home.

Another big point to consider is the income you have coming in, whether via public benefits or via work. If you are receiving money from the government for social security, this can be protected. If you have a job and creditors are trying to get a wage garnishment, this too can be stopped.

What can’t the automatic stay do in Dallas bankruptcy?
The automatic stay does not protect you from everything. You still have to pay your taxes, and if you don’t you can be audited. The IRS cannot take any property or income you have, however, as this is protected. Filing bankruptcy also does not protect you from having to pay child support or alimony; these still need to be paid. If you have criminal proceedings coming against you, these are considered separate from your debt rights; you still have to face criminal charges.

Best Use of Automatic Stay
While the automatic stay cannot stop all legal actions against you, it does help in some key ways. Bankruptcy does not solve all your problems, but in cases of debt, at a minimum it protects you from collections, and gives you the opportunity to protect your property, assets, and income. The biggest advantage of using the automatic stay is with Chapter 13 bankruptcy: it not only delays a foreclosure of your home, but can stop it if you file bankruptcy prior to foreclosure documents being submitted.

This blog post will answer 5 important questions on Texas bankruptcy.
Why hire a lawyer?
What can they do?
How much time will it take?
How much will it cost?
Is doing it yourself cheaper?

So why do you need a lawyer?
As noted, if you have the time and understanding of legal practices, it is possible. A lawyer is invaluable in proving eligibility for bankruptcy, in choosing the form of bankruptcy best for you, and in consulting with you in cases of problems. Say for example you want to file Texas Chapter 7 bankruptcy. Chapter 7 can eliminate thousands if not tens of thousands in major debts, including credit, medical, and mortgage. But there are factors in filing you simply will not know. What happens if you make a mistake? What happens if you are not eligible? Or if one of your creditors tries to lift the automatic stay, how can you protect your assets and property from collection?

What can a Texas bankruptcy lawyer do?
He or she can decide your best options from the beginning, saving you invaluable time and money. A lawyer can help you discharge the most debt, buy you time to pay off debts for assets you want to keep, stop creditor harassment, and save you from losing everything.

How long will it take?
Let’s go beyond hiring a Texas bankruptcy lawyer and consider the time of the process. A Chapter 7 bankruptcy typically takes a matter of months; you are then discharged of the majority of your debt. A Chapter 13 bankruptcy is much more time consuming, but beneficial in its own way; it takes 3-5 years, which is good because it buys you time to pay on debts instead of losing property and assets.

How much will filing Texas bankruptcy cost?
In comparison to how much money you save, a very small amount. Chapter 7 is $299 for a court fee, then you pay your lawyer a fee; Chapter 13 is $274, then lawyer costs. Most lawyers are willing to work with you on payment, but the general rates go from $1,000 to $2,000, depending on the complexity of your case. If you could save your home for $2,000, would you? If you could discharge $50,000 in debt for $2,500, would you?

The Do-It-Yourself Question with Bankruptcy
If you have no legal background, especially no prior experience with bankruptcy law, this is like defending yourself in court for a crime. You would not know where to begin. It costs too much time and therefore money to do it yourself. If you are considering filing bankruptcy without legal help, it may take months of study, and even then you can make mistakes. A lawyer learns a lot in law school, and his or her value is also the years experience working in and out of court.

Not Non-Profit
Just because a company says it’s non-profit does not mean they won’t charge you. Some misconceptions are that credit counseling is cheap, effective, and fast. However, credit counseling agencies do charge fees, do often pay their workers very well, and their main goal is to make money off you. Yes, bankruptcy is not free either, but it’s not in the non-profit sector.

If You Don’t Pay
If you miss a payment via a credit counseling plan, it can severely damage your credit rating. It’s like having two non-payments on your record.

The process is pretty simple: the counseling service will contact your creditors for you, try to get a reduced interest rate and lower payments so you can afford them, and then you pay them directly. But if you miss a payment, you have less legal protection than you would had this been a bankruptcy. If you miss the payment, quite often this will act as a second hit on your credit. We all get into situations where we’ll miss a payment for something, but having no legal protection is dangerous.

Dangers of Scams and Fees
Sometimes credit counseling agencies will try to get you for all they can. They charge you a fee just to be considered, sometimes a very high one. Then they make you pay a separate fee for their services. These are typically scams designed to take your money; you should pay little to nothing to start working with them, and they take any agreed fees after that.

Other Dangers and Bankruptcy
There are many other downfalls for credit counseling. It’s important to remember sometimes it may in fact work for you. Some do successfully rebuild their credit this way. There are many honest and hard-working credit counseling agencies. However, the process itself is much less effective than bankruptcy. With a Chapter 7 discharge, you lose most all your debts. With Chapter 13, you enter into a debt repayment plan protected by law. If you’re a Texas resident considering credit counseling, be weary of this route, and consult with an experienced Texas bankruptcy attorney instead.