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Brownsville Texas Bankruptcy Legal Blog

Chapter 7 bankruptcy doesn't have the same stigma it once did

The financial struggles that Texas residents go through often lead them to a variety of debt relief options. Sadly, many of them will not work for everyone, and those individuals may consider filing Chapter 7 bankruptcy, but worry about how it will look to others. Fortunately, the stigma that used to surround this legally protected process has virtually vanished.

People who do worry about how it will look if they file bankruptcy often consider how friends and family will react. The truth of the matter is that no one really has to know. Yes, a bankruptcy may be part of the public record, but it is not something most people go actively looking for about people they know. It may come up in an employment or housing search, but those results should not be made public.

What does the foreclosure process entail?

Brownsville residents who get behind on their mortgage loan payments could face legal ramifications from their lenders. Upon purchasing a home, it becomes collateral for the loan, which means that failing to make the agreed-upon payments could mean the lender will initiate foreclosure proceedings. During this process, the lender attempts to take possession of the loan's collateral -- the home.

Seizing the property is the short version of what a foreclosure entails. In reality, the lender must go through a legal process. Most foreclosures go through the "judicial foreclosure" process in which the lender files a lawsuit against the homeowner, demanding payment of the remaining balance of the loan or surrender of the home. If the borrower fails to pay within the prescribed amount of time and the court rules in favor of the lender, the home could be sold at auction. Texas law allows for both judicial and nonjudicial foreclosures.

Did Texas contribute to high medical debt for some residents?

States had the option to opt into the expansion of Medicaid offered by the Affordable Care Act or not. Texas decided not to do so. It appears that millions of dollars in medical debt across the state was the result.

According to recent data compiled by the Center for Public Policy Priorities, approximately 23 percent of white residents received calls from medical debt collectors while around 29 percent of those in the same situation were of color. This disproportionate amount of debt is blamed on the fact that many of families of color could not afford or did not have access to medical insurance. Latinos in the state were also in the same position.

Care planning for the future is important for you and your family

Do you know what will happen if you if you are no longer able to speak for yourself and express your own wishes regarding your medical care? Who will take care of you if you become sick and unable to care for yourself? These are only a few of the most serious questions that people must ask themselves when drafting complete and thorough estate plans.

Care planning is one of the most important aspects of having a complete plan in place, yet many people overlook this step. You may understand why, as it is not pleasant to think about what could happen in the event that you become incapacitated. You may also understand that many people simply fail to see the need to take this step as they are currently healthy and young.

Credit card debt surpasses student loans for millennials

Without a doubt, many people throughout the country, including here in Texas, owe tens of thousands of dollars in student loans. However, a recent report indicates this type of debt is not necessarily the highest that numerous millennials have. Instead, student loans take a back seat to credit card debt for about 25% of those who participated in the survey.

To clarify, the study used the definition of millennial from the Pew Research Center, which included people ranging in age from 23 to 38 as of 2019. This generation of Americans tends to believe they will not be able to retire debt free and carries more debt than their parents did when they were within the same age range. To make matters worse, around 22% of those with significant credit card debt do not even know what the interest rate is on their cards.

Sometimes creditors commit violations in a Chapter 7 bankruptcy

When searching for a debt relief option, Texas consumers often search for relief from the calls, texts, emails and other communications from creditors. Those struggling with overwhelming debt do not need the constant reminders of what they already know -- they are unable to pay their debts. Filing for Chapter 7 bankruptcy stops this activity through the automatic stay. Creditors are required to adhere to the law that states that they cannot continue to pursue payment as long as the stay is in effect.

Sometimes, creditors fail to stop collection efforts despite this mandate. In the first days after filing, a Texas consumer could continue to receive communications from creditors, but this is often blamed on the fact that news has not yet reached them. Filers are encouraged to keep their case number and other important information with them in order to advise creditors that continue to call of the filing.

The repayment plan is at the heart of a Chapter 13 bankruptcy

When Texas residents find themselves in a precarious financial position, they have numerous options for debt relief, depending on their overall circumstances. One option available to many is the filing of a Chapter 13 bankruptcy. Before embarking on this debt relief path, it might help to better understand the role of the repayment plan in this process.

Unlike a Chapter 7 bankruptcy, a Chapter 13 gives the filer time to repay debts on a certain schedule. Unsecured debts remaining at the end of that period could be discharged by the court. Individuals often do not have to worry about giving up property and can emerge from the process in a better financial position.

Should you get a secured credit card after Chapter 7 bankruptcy?

Financial issues are nothing new to residents of Texas. Whether they come about through sudden events such as a job loss, a divorce, or an illness or injury, or through other means, they end result is the same -- calls from debt collectors, struggling to stay afloat and looking for debt relief options. Many of them file for Chapter 7 bankruptcy and then wonder how to rebuild their credit afterward.

One option is to obtain a secured credit card, but they are not for everyone. An individual can use the card for purchases just as any other credit card. However, the credit limit is based on a deposit made by the person to whom is issued. Some companies allow the user to spend up to the credit limit while others restrict usage to a certain percentage.

Not every Chapter 7 bankruptcy ends with a discharge

Overwhelming debt can be a major source of stress and frustration for Texas residents. Many of them turn to Chapter 7 bankruptcy for relief from these obligations, and look forward to the day when they receive their discharge and get to move forward with a fresh financial start. However, if filers are not careful, their cases could result in a dismissal instead of a discharge.

The bankruptcy process requires filers to comply with numerous rules and regulations. The failure to complete all of the necessary steps could result in an unpleasant outcome. For instance, this process is paperwork intensive. If a Texas consumer does not provide all of the required documentation, the court could dismiss the case.

New legislation protects veterans’ benefits after bankruptcy

The President recently signed a bill that allows veterans to receive disability benefits after filing for bankruptcy. The Honoring American Veterans in Extreme Need (HAVEN) Act, now protects veterans’ disability income so it cannot be seized during bankruptcy.

Disability payments, or income, will no longer be considered disposable income that is subject to creditors.

Office Location

Limon Law Office
890 W Price Rd
Brownsville, TX 78520

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