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How to Legally Maximize Your Bankruptcy Exemptions
If you are considering bankruptcy, you will want to determine how to receive relief from your debts while retaining as much of your money, property, or other assets as possible. If you are planning to file for Chapter 7 bankruptcy, certain assets may be subject to liquidation, meaning that you will need to surrender them so they can be sold to repay some of the debts you owe. However, certain types of exemptions will apply, and you will not be required to surrender assets that are exempt. When planning for bankruptcy, it is important to know how to maximize your exemptions while also avoiding any fraudulent actions that could affect your case.
Making the Most of Bankruptcy Exemptions in Texas
Debtors who file for bankruptcy in Texas will use the state's laws to determine what assets will be exempt from liquidation. It is important to understand what types of property will be exempt. Texas has some very generous exemptions, including a homestead exemption that allows property owners to keep the full value of the equity they own in their family home. Exemptions are also available for personal property, including one vehicle for each member of a family who has a driver's license, household items, clothing, family heirlooms, athletic equipment, bicycles, tools of the trade, two firearms, jewelry (as long as it does not make up more than 25 percent of the total value of exempt assets), and family pets. Retirement savings accounts will also generally be exempt.
Can I Refinance My Home to Avoid Foreclosure?
If you are a homeowner who may potentially be at risk of foreclosure, you may be wondering about your options. If you have encountered financial difficulties that have caused you to miss one or more mortgage payments, you may be concerned about your ability to pay what is owed, including any late fees or penalties, while also making ongoing monthly payments in the future. In this situation, refinancing your mortgage may seem like a good idea, since it could potentially lower your monthly payments. However, there are some risks associated with refinancing, and you will want to explore all of your options to determine the best approach to take.
How Refinancing Works
When you refinance your home, you replace your current mortgage with a new one. This new mortgage will have different terms than your old mortgage, and they could include a lower interest rate, a different loan term, or other changes. Depending on the specifics of your new mortgage, this could reduce your monthly payments and make it easier for you to stay current on your loan. For example, if you have a 30-year fixed-rate mortgage with an interest rate of 6 percent, refinancing to a new 30-year fixed-rate mortgage with an interest rate of 5 percent will allow you to save money on interest each month.
5 Things You Should Avoid Doing Before Filing for Bankruptcy
If you are experiencing financial problems, or if you are struggling to repay large debts, you may be considering filing for bankruptcy. This is a solution that is available to most people in the United States, and it will allow you to receive relief from your debts. This can often be the best way to end harassment by creditors and ensure that you will be able to put the money you earn toward meeting your family's ongoing needs and saving for the future. However, when preparing to file for bankruptcy, there are a few things you should avoid doing. Failure to follow the laws that affect the bankruptcy process could result in your case being dismissed, and you may be unable to discharge your debts and receive the financial relief you need.
1. Do Not Put Off Bankruptcy Longer Than Necessary
If you are struggling to make ends meet, you should not ignore the warning signs that you may need to file for bankruptcy. The sooner you seek help, the better off you will be. Putting off the inevitable will only make your situation worse, and it will put even more stress on you and your family. Delaying bankruptcy could lead to creditors obtaining a legal judgment against you, the garnishment of your wages, the repossession of one or more vehicles, or a home foreclosure. These issues can complicate the bankruptcy process and make it more difficult to address the debts you owe. If bankruptcy is the best option for dealing with your debt, you should be ready to take that step before your problems get worse.
Can I File for Bankruptcy After Moving to Texas From Another State?
People can encounter issues related to debt in a variety of situations, and when debts become overwhelming, or when financial problems affect their ability to repay what is owed, bankruptcy may be the best option. Filing for bankruptcy can be a confusing and overwhelming process, and different bankruptcy laws may apply in each state. For those who recently moved to Texas from another state, it is important to understand how this will affect their ability to file for bankruptcy and receive relief from their debts.
The 180-Day Rule and the 730-Day Rule
The venue where a person may file for bankruptcy will depend on where they have lived during the previous six months. A person must file for bankruptcy in the state where they lived for the majority of the 180 days before the date they file. That is, if a person recently moved to Texas, they may file for bankruptcy in Texas as long as they have lived in the state for at least 91 days during the six months before they file. Otherwise, they will be required to file for bankruptcy in the state where they previously lived.
What Are the Most Common Financial Issues That Lead to Bankruptcy?
Every year, millions of Americans find themselves struggling to make ends meet. For many, this struggle eventually leads to a decision to file for bankruptcy. This decision is never an easy one, and bankruptcy is often the last resort after a person or family has tried everything else to get their finances under control. In many cases, people are hesitant to pursue bankruptcy because they believe that they will be seen as financially irresponsible. However, understanding the reasons that people most commonly file for bankruptcy can provide insight into the situations where debt relief may be needed.
The Most Common Reasons People File for Bankruptcy
While financial mismanagement is one reason why people may choose to file for bankruptcy, it is far from the most common issue that families in the United States experience. In actuality, the causes of financial problems that often lead to bankruptcy include:
When Can a Chapter 13 Bankruptcy Be Severed During Divorce?
Debt can be a significant issue for many couples, and in many cases, spouses may choose to pursue bankruptcy so that they can eliminate certain debts and regain financial stability. Chapter 13 bankruptcy is the preferred option in some cases, and it may allow various types of debts to be discharged while avoiding a home foreclosure or the loss of other property. This type of bankruptcy will require a couple to make ongoing payments for several years, ensuring that some of their debts will be paid off and allowing them to get caught up on missed payments, interest, and late fees. However, if a couple chooses to get a divorce prior to the completion of their Chapter 13 repayment plan, they may need to determine how this will affect their bankruptcy case. One option in these situations involves dividing a joint bankruptcy into two separate bankruptcy cases. By understanding the option to sever or bifurcate a Chapter 13 case, a couple can determine whether this is the right solution for their situation.
How Is My Credit Score Affected by Medical Debts?
Debt can affect people in multiple ways. Those who have struggled to repay their debts due to financial issues have a number of options for debt relief, including filing for bankruptcy. However, those who have eliminated debts through bankruptcy or who have used other methods to address the amounts owed will want to understand how their credit scores may be affected by this issue. For those who have medical debts, it is important to understand how these debts are reported to credit agencies. Fortunately, some recent policy changes may benefit people with medical debts and reduce the negative impact on their credit scores.
Changes to Reporting of Medical Debts
Medical debt is often a significant concern for people who are experiencing financial difficulties. Medical treatment may be necessary in certain situations, such as when a person requires treatment for a serious injury or when care is needed for an illness such as cancer. Medical treatment can be very expensive, and a person may be required to pay large medical bills, even when they have health insurance coverage. As a result, many people end up with medical debt, and this can have a significant impact on their credit scores.
What Happens if I Miss Payments in a Chapter 13 Repayment Plan?
While debtors have multiple options for addressing debts through bankruptcy, many people may choose a Chapter 13 bankruptcy, which will allow them to avoid the loss of certain types of property. In a Chapter 13 case, the debtor proposes a repayment plan to the bankruptcy court that details how they will repay some of their debts over a three- to five-year period. However, even though a repayment plan may make sense at the time a person files for bankruptcy, financial difficulties may arise in the future that can affect their ability to make ongoing payments. In these situations, debtors will need to understand what will happen if they fail to make the required payments.
Addressing Late or Missed Payments in a Chapter 13 Case
During a Chapter 13 bankruptcy, a debtor will be required to make all payments in their repayment plan on a monthly basis. If payments are late, or if the debtor misses one or more payments, the bankruptcy trustee may take action to address this issue. In some cases, the bankruptcy case may be dismissed. This means that the bankruptcy protection that the debtor was enjoying will be ended, and creditors may resume seeking collection of debts. In addition, if a foreclosure was halted by the bankruptcy, the mortgage lender may resume the foreclosure process.
What Are the Pros and Cons of Filing for Bankruptcy? (Part 2)
While bankruptcy is an option that can help people who have encountered financial difficulties address debts and regain financial stability, if you are considering bankruptcy, you will need to understand both the pros and cons of this legal process. In our most recent blog, we looked at some of the benefits that bankruptcy can provide. However, we also want to make sure you are aware of the ways you may be negatively affected by taking action to pursue this form of debt relief.
Potential Drawbacks of Filing for Bankruptcy
The bankruptcy process can be complicated, and you will be required to compile a variety of financial information, fill out forms, and appear during court proceedings. Some of the potential drawbacks that you may face if you choose to file for bankruptcy include:
What Are the Pros and Cons of Filing for Bankruptcy? (Part 1)
Millions of Americans struggle with debt. In many cases, debts are necessary, and they can ensure that a person will be able to buy a home, vehicle, or other important items. Other debts may come about because of unforeseen financial difficulties, such as credit card balances that may become impossible to repay because a person lost their job after making a large purchase. If you have significant debts, you may be looking at your options, including the possibility of filing for bankruptcy. As you review your finances and consider the path ahead, it is important to understand the potential benefits and drawbacks of pursuing debt relief through bankruptcy.
Benefits of Bankruptcy
While the primary reason to pursue bankruptcy is that it may allow you to eliminate your debts, there are a number of other benefits that you may also be able to realize. These include:
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