Brownsville Texas Bankruptcy Legal Blog

Being overwhelmed by debt creates a constant struggle for many Texas residents. Phone calls, threats of lawsuits and more only serve to make the situation worse. For this reason, many of them decide to file for Chapter 7 bankruptcy, partly in order to take advantage of the automatic stay, which bars creditors from engaging in collection activities during the proceedings.

The problem is that some creditors fail to adhere to the automatic stay. Filers may continue to receive calls and other communications from their lenders. The question is whether these actions are deliberate or unintentional on the part of creditors.

This is not an easily answered question, but Texas residents considering their debt relief options need to understand the substantial risks involved in debt settlement. Far too many people have ended up in the same or worse financial circumstances after trying this option. In fact, many end up filing for Chapter 7 bankruptcy protection, and some admit they should have done so in the first place.

Debt settlement companies claim that they negotiate on behalf of consumers to lower the balances on the consumers' accounts. Supposedly, creditors will stop coming to the individual for payment. Moreover, a consumer will not have to face the threat of a lawsuit to collect the debt. Sounds good. Right?

Texas consumers can empathize with Paul Teutul when it comes to financial problems. In fact, the 69-year-old star of "American Chopper" filed a Chapter 13 bankruptcy back in Feb. 2018. Recently, however, the trustee on this case accused Teutul of failing to adhere to the court's and the trustee's requirements for the case.

One of the requirements of the trustee presiding over Teutul's bankruptcy case is for Teutul to provide either transcripts of his tax returns or the returns themselves. The trustee claims that Teutel failed to provide this information for the 2017 and 2018 tax years. Teutul was also required to submit a budget showing whether he could make the payments required by his Chapter 13 plan.

Financial problems are nothing unusual for consumers here in Texas and elsewhere. Debt can get extremely overwhelming and, for many people filing for Chapter 7 bankruptcy, could provide relief from the situation. What makes several of them hesitate is thinking that doing so would end their financial futures, but that is not true. In fact, it does not have to be an end, but instead, a beginning.

Rebuilding credit after a bankruptcy is entirely possible. Yes, it will lower an individual's credit score, but ordinarily, by the time someone files, the damage is already done. The bankruptcy usually stops the downward spiral and provides a chance to recover. Even so, a Texas resident dealing with these circumstances needs to approach the situation with a plan in order to take advantage of the fresh start receiving a discharge can give him or her.