Brownsville Texas Bankruptcy Legal Blog

For some Texas residents, tax season is a stressful time. For others, however, the tax return they receive is a much appreciated boost to their finances. For many people in Texas and throughout the United States, using part or all of a tax return to pay down credit card debt is a popular choice.

According to a recent survey of 1,000 Americans carrying a credit card balance, 70.4 percent those receiving a tax refund plan to use it to pay down credit card debt. An additional 8.91 percent say they are unsure, but may use their refund for debt repayment purposes. Of the respondents who expected a tax refund, the average refund was $3,119.43 and they expected to use an average of 64.98 percent of the refund to pay down credit card debt.

You saw how your best friend’s family lived, going from paycheck to paycheck without gaining any savings and adding a mountain of debt. They often ate at restaurants, succumbed to impulse buys, overdid it with credit card spending, and just made poor financial decisions.

If you were in their shoes, you’d realize that it was time to reevaluate a number of things in your life, namely about your spending habits. It’s time for a turnaround: Get out of debt, and sock away some emergency savings in case of a job loss, medical situation or some other life event.

When Texas residents feel that the time has come to face their financial struggles, it can be frightening. However, individuals should feel proud that they are willing to address their problems rather than allowing them to get worse. For some, Chapter 13 bankruptcy may be the avenue that helps them get back on track with their finances.

When considering bankruptcy, it is important to know about the different types for consumers. With Chapter 13, qualifying individuals generally have the ability to generate an income, and rather than liquidating assets, a repayment plan is used that allows parties to address their outstanding balances over the course of three to five years. Some people may want to put off following this route, but in reality, taking action sooner rather than later may help avoid additional difficulties.

Facing the ups and down of financial instability can be beyond stressful. Any type of expense can suddenly send already limited funds even further into the red. Having to live this way can result in substantial stress and other negative impacts on Texas residents' health. Though some may be considering Chapter 7 bankruptcy, they may not know whether it is truly right for them.

There are other ways that people may be able to address their outstanding debts. For instance, some creditors may be willing to negotiate outstanding balances because they would rather receive at least some of what they are owed rather than having the entire balance forgiven during bankruptcy. Of course, creditors may not be willing to come to a settlement even when the subject is broached.