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Brownsville Texas Bankruptcy Legal Blog

The basic steps of a Chapter 7 bankruptcy

Many Texas residents can attest to the fact that struggling with debt is no picnic. Many households reach the point where they can barely afford the necessities, let alone pay any discretionary bills. At this point, they probably attempted to deal with the overwhelming amount of debt through other means before coming to the conclusion that filing for Chapter 7 bankruptcy would be the best resolution, but the unknown could be intimidating.

Knowing what the basic process entails could make the situation less stressful. The first step is to obtain a bankruptcy counseling certificate by taking a court-approved course no more than 180 days prior to filing. Before filing the petition, it will be necessary to take the means test, which determines whether an individual qualifies to file. If so, then he or she may move on to the next step, which would be to file the petition.

Six ways to not overspend this holiday season

With the holidays in full swing, many people are eagerly hitting the stores and trying to come up with the perfect gifts for everyone on their wish list. With stores offering sales and coupons, it may seem like getting a good deal is easy to do around this time of year.

Just because everything is on sale does not mean that people do not overspend. According to The Penny Hoarder, 71 percent of people spend more than they planned to on presents. More than half of shoppers—57 percent—buy presents that were not even on their shopping lists. One could say overspending during the holidays is as American as apple pie.

No one should suffer under the weight of medical debt

No one plans to get seriously ill or suffer serious injuries. This makes it nearly impossible to plan for it financially. Many Texas residents think that since they have health insurance that they are covered if something happens. Sadly, many people find out that they still owe a great deal of medical debt even with insurance.

This type of debt can easily reach into the tens or hundreds of thousands of dollars. That kind of financial burden can easily devastate a family. The stress of owing the money is great enough, but when creditors and bill collectors start calling, emailing and otherwise harassing Texas residents, the pressure can get unbearable. At that point, it may be time to consider all of the available options.

A discharge isn't guaranteed in a Chapter 7 bankruptcy

If someone tells a Texas resident otherwise, he or she should probably run the other way. While most people do receive a discharge from a Chapter 7 bankruptcy, there is no guarantee it will happen. However, knowing the circumstances under which one may not be given could help increase the likelihood of receiving one.

First, Texas consumers contemplating filing bankruptcy should know that not all debts are eligible for discharge such as most taxes, student loans and child support. Moreover, if a filer neglects to include a debt ordinarily eligible, he or she remains responsible for it even if a discharge is received. A consumer may decide to reaffirm a debt with a creditor such as a mortgage or auto lender in order to retain an asset.

How do you know if Chapter 13 bankruptcy is the path for you?

Like other Texas residents, you recently came to the conclusion that fixing your financial situation is beyond tightening your budget or looking for more places to cut costs. You need a real solution, and you have decided that filing for Chapter 13 bankruptcy could provide you with the debt relief you need. Your only question: Is this is the right path for you to take?

In order to answer that question, you must consider numerous factors. You may have owned your home long enough that you accumulated a substantial amount of equity. If so, you could lose your home if you do not file Chapter 13 because it may not qualify for the homestead exemption. Perhaps you simply got behind on your mortgage payments and just need time to catch up so that you can keep your home.

Chapter 7 bankruptcy could save you from creditors' efforts

For whatever reason, you are no longer able to meet your financial obligations as you once were. Now, you have creditors calling you, sending you letters and making threats or following through with legal action. More than likely, you have tried everything you can think of to deal with your financial situation, but to no avail. Like other Texas residents, you probably did not automatically consider filing for Chapter 7 bankruptcy as a debt relief option, even though it could be your best option.

Upon filing a bankruptcy petition, an automatic stay goes into effect that prevents your creditors from continuing their debt collection efforts. When creditors call you for your daily dose of harassment, you can tell them you have filed for bankruptcy and give them your case number. They can no longer contact you during the course of your bankruptcy.

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.

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Limon Law Office
890 W Price Rd
Brownsville, TX 78520

Phone: 956-465-2661
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