Call Today for a FREE Consultation
210-342-3400
Recent Blog Posts
How Does Chapter 13 Bankruptcy Work in Texas?
When debts snowball beyond control, Chapter 13 bankruptcy restructures finances, offering three to five-year repayment plans capped at what you can afford. This path preserves assets while discharging remaining balances upon completion. A Texas bankruptcy lawyer can help you structure the most ideal process for your situation.
Filing the Petition
Everything begins by submitting your voluntary Chapter 13 bankruptcy petition to the bankruptcy court, documenting assets, debts, income, and expenses. This triggers an automatic stay halting foreclosure, repossessions, utility shut-offs, wage garnishment, and most collection harassment during proceedings. You keep property like cars and homes while the case wraps up.
Creating Your Repayment Plan
Next, you propose a repayment plan tailored to disposable income levels, assisted by your attorney. This lays out affordable monthly installments toward outstanding debts like credit cards, medical bills, personal loans, and past taxes. Payments are distributed to each creditor until the respective principal balances are reached, or the payments are completed—whichever happens first.
Filing for Bankruptcy as a Small Business Owner
As a small business owner, facing severe financial struggles can feel overwhelming and stressful. You may reach a breaking point where bankruptcy starts to seem like the only way out from crippling debt obligations and creditor threats. Filing can provide temporary relief and protection. However, bankruptcy is not a cure-all solution and carries significant downsides as well.
Carefully evaluating both the potential benefits and drawbacks and considering all alternative options first enables you to make the most informed choice for your business. A Texas lawyer can help you weigh the decision and help you.
The Financial Benefits of Filing for Bankruptcy
Filing for bankruptcy can provide financial relief for small business owners who are shouldering overwhelming company debt. It gives you time to reorganize your finances, catch up on debt, and create a plan to start paying it down going forward. Chapter 11 bankruptcy allows you to continue operating your business under the protection of an "automatic stay," so you do not have to worry about creditors seizing assets or filing lawsuits while working to get back on track.
Can You Save Your Assets During Bankruptcy in Texas?
Filing for bankruptcy may seem scary because it requires you to surrender property to pay debts. However, Texas bankruptcy law allows the protection of certain assets through exemptions. Proper pre-bankruptcy planning will enable you to minimize liquidations and lawfully keep more of your wealth. A Texas lawyer can help you follow the proper steps for the best outcome for you.
Texas Offers Generous Exemptions
The key to saving assets in bankruptcy relies on claiming all available exemptions. Exemptions remove eligible property from liquidation during the proceedings so creditors cannot seize and sell the assets. Luckily, Texas legislation provides more generous exemptions compared to most other states.
Going Through with a Short Sale When Facing Bankruptcy in Texas
If you are struggling with making mortgage payments and considering bankruptcy, a short sale of your home can be a favorable option. A Texas lawyer can help you determine how you can properly have a short sale for your situation.
Make Sure You Qualify for a Short Sale
You must have sufficient equity in the home and valid financial hardship to convince the lender to allow a short sale. Hardship examples include job loss, divorce, unaffordable mortgage rate resets, or heavy medical debts. The lender will typically require a current appraisal showing you are underwater.
Gather All Required Documentation
Lenders will request extensive financial records from you, such as tax returns, bank statements, income documentation, hardship evidence, and past-due mortgage notices. Organize everything thoroughly. Missing paperwork can torpedo the short sale approval.
What Are My Options When Facing a Debt Collection Lawsuit?
Being served with a lawsuit from a debt collector can be alarming. However, it does not necessarily mean you are out of options. There are different ways a Texas lawyer can respond when faced with debt litigation.
Evaluate the Claims in the Lawsuit
Read the lawsuit paperwork carefully. Do you recognize the debt being claimed? Is the amount accurate? Is it still within the statute of limitations? Be aware that debts can be bought and sold multiple times, so the plaintiff may not be the original creditor. If you dispute the main details of the lawsuit, make sure to contact a lawyer about possible defenses.
Negotiate Directly if Appropriate
If you do not contest the validity or amount of the debt, you may be able to negotiate directly with the plaintiff or their attorney. They may agree to a payment plan or lump sum settlement for less than the amount owed. Get any deal in writing before paying or admitting liability. However, be cautious about negotiating without guidance.
The Potential Benefits of Declaring Bankruptcy
Filing for bankruptcy is a major decision with long-term consequences. However, for some individuals facing extreme financial distress, it can provide much-needed relief and a chance to rebuild. When weighed carefully, there are scenarios where the benefits of bankruptcy outweigh the drawbacks. A Texas lawyer can help you decide if bankruptcy is in your best interest.
Gain Immediate Protection from Creditor Harassment
Once you file, you receive an automatic stay that legally forces creditors to stop all collection efforts immediately. You will no longer have to worry about threatening calls or lawsuits. This period lets you focus on getting back on your feet financially.
Pause Foreclosures and Wage Garnishments
Along with halting collections, filing stops imminent foreclosures, repossessions, utility shut-offs, and court-ordered wage garnishments in their tracks. Your assets and income are shielded so you can work toward recovery.
Can Bankruptcy Help You Avoid Foreclosure in Texas?
Facing home foreclosure can be emotionally and financially devastating. If you have fallen behind on mortgage payments, you may be wondering - can filing for bankruptcy stop the foreclosure process and let you keep your home? A Texas lawyer could likely provide some ways to keep you in your home, depending on your specific circumstances.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows you to restructure debts like mortgage arrears over three to five years. You will make monthly payments to a trustee who disperses payment to creditors. A Chapter 13 bankruptcy will halt a foreclosure while you get caught up on payments through your repayment plan. But staying current on the plan is essential. If you default, the lender can resume foreclosure proceedings.
Type of Texas Bankruptcy If You Do Not Want to Lose Property
Bankruptcy can seem like a daunting thing even to consider. However, there are some situations in which it would be best to apply for bankruptcy so you can move on with your life. Thankfully, there are better options than others if you want to make sure you keep your assets. A Texas lawyer can ensure you are going down the right path with the type of bankruptcy.
Chapter 13 Allows Keeping Property By Repaying Debts
If you face overwhelming debts but want to keep your home and other assets, Chapter 13 bankruptcy is usually the best option. Unlike Chapter 7, which requires liquidating non-exempt property, Chapter 13 allows you to keep your assets under a repayment plan.
Benefits of Chapter 13 in Texas
A major benefit of filing Chapter 13 bankruptcy in Texas is the state’s very generous exemptions that allow for the protection of substantial assets from creditors. For example, Texas has a homestead exemption allowing you to shield up to 10 acres of home equity in urban areas or up to 100 acres in rural areas.
What Should You Know About Bankruptcy and Divorce in Texas?
Going through a divorce while also facing bankruptcy can add extra layers of complexity to an already difficult situation. If you find yourself in this position, you should know some key things about bankruptcy and divorce. A Texas lawyer can help you with this process.
File Divorce First
It is usually recommended to file for divorce before filing for bankruptcy when possible. This allows you more flexibility in structuring debt division in the divorce settlement. Marital debts can be divided equitably before bankruptcy discharges them.
Joint Bankruptcy Has Pros and Cons
Filing a joint bankruptcy petition with your spouse has some potential advantages. Your combined assets and debts are considered, potentially yielding a faster discharge of debt. However, this requires a high level of cooperation and trust with your soon-to-be ex-spouse, which may not be realistic.
What Happens to Medical Debt With Bankruptcy in Texas
As the medical debt piles up, bankruptcy may seem like your only option. But how do medical bills get handled in bankruptcy? It depends on the chapter you file. Understanding the nuances allows the strategic use of bankruptcy to find relief. A Texas lawyer can help you determine if this is the best option for you and how it can affect your situation.
Navigating Medical Debt in Chapter 7
Chapter 7 bankruptcy fully discharges many unsecured debts, including medical bills, credit cards, personal loans, and similar loans. Discharge legally eliminates your obligation to pay. However, not all medical debt can be discharged. Bills owed to government entities like Medicare are considered priority debts and remain payable. Ongoing obligations like child support also still must be paid. Before filing Chapter 7, categorize your medical debts to understand which could be erased so you can evaluate if liquidation bankruptcy suits your situation. An attorney can help thoroughly assess discharge-ability.
Contact Our Firm
The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.
I have read and understand the Disclaimer and Privacy Policy.
Call Today for a FREE Consultation
210-342-3400
