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Brownsville Texas Bankruptcy Legal Blog

Do Chapter 7 bankruptcy filers have to give up their property?

There is one debt relief option that some Texas residents may not explore out of fear of losing their property. The myths surrounding Chapter 7 bankruptcy include a story that anyone who files will lose all of his or her property. Fortunately, this simply is not true. Depending on the circumstances, some property may be surrendered to pay creditors, but more than likely, most people's property will fall under one or more exemptions.

While bankruptcy is designed to provide filers with a clean slate and a fresh start, it does not mean that they must start over completely. Certain property will fall into several exemptions that allow it to be kept. For instance, the U.S. Bankruptcy Court does not intend to put people out of their homes if they wish to try to keep them by working out an agreement with the lender. As long as the value of a home does not exceed either the federal or Texas homestead exemption, it may be kept.

Dealing with credit card debt collectors

It is easy for expenses to sneak up on a Texas resident. A cup of coffee here, a quick lunch there and a few unplanned purchases can easily add up to a significant amount of credit card debt over time. If an individual fails to notice how much of a problem it is until it is too late, debt collectors could already be calling.

How a consumer deals with these calls matters. Avoiding them could only make matters worse. Instead, it might be more useful to make contact proactively in order to see whether an agreement can be reached regarding the balance owed. Another mistake that many people make is agreeing to pay the balance that the debt collector says is owed. It would be better to first request this information in writing to be sure that is actually the true balance, and to make sure that it is actually a debt owed by the person being called.

How to rebuild your credit after a bankruptcy

Many people worry about what filing for bankruptcy does to your credit score — but, filing can save you from the significant credit hits and financial ruin that come with foreclosure, lawsuits, repossession and wage garnishment.

If you are worried about rebuilding credit after filing for bankruptcy, here are a few tips that can help you get back on track once you’re out on the other side.

Not every debt is discharged in a Chapter 13 bankruptcy

It seems as though debt sneaks up on Texas residents. Their lives are busy, and even though it may take months for the situation to become dire, many wake up one morning to realize they are overwhelmed by their financial situations. One of the debt relief options they may pursue is the filing of a Chapter 13 bankruptcy.

Before embarking on the journey, it may be a good idea to understand that not all debts can be discharged through this or any other chapter of the Bankruptcy Code. Even so, that does not mean that it will not achieve a Texas resident's goals regarding obtaining a fresh financial start. For instance, an individual still owes alimony and child support despite bankruptcy, including back payments.

Credit card debt continues to rise

On the one hand, as consumer confidence in the economy rose, so did the amount people spent. On the other hand, as people continued to struggle financially, so did the amount of their debt. In both scenarios, the amount of credit card debt carried by consumers here in Texas and across the country began to rise again.

In fact, it has continued to rise in 2018. The other type of debt consumers continue to take on is mortgage loan debt. There is good news, however. As those types of debts go up, student loan debt has gone down.

Why do people turn to Chapter 7 bankruptcy?

The odds are that you have some sort of debt just like many other Texas residents do. You may also be like others who consistently perform the same balancing act each month just to stay above water. However, when that balancing act becomes too much to bear, you may turn to Chapter 7 bankruptcy for relief, just as many people before you.

Why do people file for bankruptcy? Obviously, they file for a variety of reasons, and in some cases, more than one reason leads to the need for the type of relief that this debt relief option provides. In other cases, one cataclysmic event leads to overwhelming debt. For instance, few people are financially prepared for a medical crisis. Not only do the medical bills pile up (even with health insurance), but the loss of income after vacation and sick days are used up, if you are fortunate enough to have them, can be devastating to a family's finances.

Chapter 7 bankruptcy issues: Changes in the debt landscape

Back in 2008, the banking and housing industries experienced a crisis that thrust the country into the Great Recession. Over the last 10 years, consumers' spending habits changed in response to it. For many Texas consumers, that meant filing for Chapter 7 bankruptcy as they experienced financial hardships.

It took several years for the country to recover, and many Texas residents learned invaluable lessons when it comes to finances. Even so, the overall amount of debt that Americans carry has not really changed that much. In fact, research indicates that people tend to have around 5 percent more debt now than when the country's financial crisis began, but the distribution of that debt has changed.

Ways to get a mortgage with bad credit

Finding out your credit is poor does not mean you suddenly turned from a good person to a bad person. The thing with bad credit is, it can make life a little more frustrating, but it is manageable. First off, with a lower credit score you will find it will be harder to be approved for loans and credit cards. If you are approved, you are faced with high interest rates and fees.

If you have this much trouble getting a credit card, then you may want to give up on the pursuit of purchasing a home. However, there is no need to turn your back on becoming a homeowner. There are ways to have bad credit and get a mortgage.

Choosing between consolidation and Chapter 7 bankruptcy

Debt is an unavoidable part of American life, as many people can attest, but sometimes, it can get away from us. For Texas residents facing serious debt problems, there are multiple solutions available to help remedy the situation. However, it is important to understand the differences between these options, including debt consolidation and Chapter 7 bankruptcy.

Debt consolidation is a good choice for people whose debts are beginning to mount but can still be affordably handled. Consolidating debts basically means rolling them into one, often setting up a single payment that handles multiple creditors at once. In some cases, this payment can even feature a lower interest rate or can be set up as a long-term payment plan that allows the debtor to pay the amounts back slowly over time. Home equity loans, personal loans and balance transfer credit cards are common tools in consolidation. 

How Chapter 7 bankruptcy works

Bankruptcy can be a complicated topic to discuss or learn about, both because of incorrect information disseminated through popular culture, and because it is a complicated process. Chapter 7 bankruptcy can help Texas residents recover from unmanageable debt, but it is critical that the individual undertaking the filing understands the process as best as possible. This is why the support of an experienced bankruptcy attorney can be so vital to a successful filing.

Before filing for bankruptcy, the first step required by law is to take credit counseling courses. This helps to weed out those who do not actually require bankruptcy services. Even those who do choose to file after these courses are required to take additional debtor education courses following the filing. Obviously, this is not something that should be undertaken lightly.

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Limon Law Office
890 W Price Rd
Brownsville, TX 78520

Phone: 956-465-2661
Fax: 956-544-4949
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