Posted on October 06, 2014 in Chapter 13

For most people who file bankruptcy, the process is very unfamiliar. Many filers focus on the negative aspects of bankruptcy: its effects on credit, potential loss of assets, and others. What is important to understand, however, is that bankruptcy is not financial suicide; it is an opportunity to save your home, reduce monthly payments, and end harassment from creditors.

Unlike Chapter 7 bankruptcy, which involves the liquidation of assets to pay off debts, Chapter 13 involves the restructuring of debt. The debtor pays “priority debts” first. These include taxes, alimony, child support and any owed wages. After these, car loans and mortgages are usually next. These debts are scheduled into an approved payment plan that takes income and overall debt into account.

Unsecured debts, such as credit cards or medical bills, are often handled last. Depending on whether these can be paid in full, there may be restructuring options available.

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 Posted on September 24, 2014 in Bankruptcy

All of us struggle with finances at one time or another. However, for many people, that struggle may become overwhelming and feel as if it is never-ending. For those people, bankruptcy can often be the first step to gain control over their financial future.

There are certain signs that financial advisors point to as red flags that your debt has become unmanageable and bankruptcy should be considered. These signs include:

• The balance of your credit card debt continues to increase, yet your monthly income is either staying the same or has decreased;
• You pay only the minimum amount due on your credit cards. Some months, you pay even less than the minimum or completely miss the payment;
• You have multiple credit cards and they all have balances on them;

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 Posted on September 22, 2014 in Chapter 7

Let’s face it: bankruptcy is a daunting prospect. Many first-time filers feel stressed, anxious and even overwhelmed at the idea. The truth, however, is that bankruptcy comes with many benefits: no more calls from creditors and no more worrying about losing your home, to name two.

When most individuals think of bankruptcy, Chapter 7 comes to mind. That is because it is the most common type of bankruptcy.

According to UScourts.gov, Chapter 7 allows for an immediate stop of wage garnishments, home foreclosure, phone calls from creditors and repossessions. A trustee will evaluate your assets to see if liquidation is an option, but in most cases, filers can keep their properties.

Ultimately, very few creditors appeal the results of creditors’ meetings. The bankruptcy process ends with the court wiping away or discharging eligible debts.

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 Posted on September 10, 2014 in Chapter 7

All Chapter 7 bankruptcy petitioners are required to attend a creditors meeting. This is typically the only “formal” meeting the petitioner will be required to attend. This meeting is also known as a 341 meeting, named after the section of the bankruptcy code that addresses it. A 341 meeting is most often held at the office of the trustee who is overseeing the bankruptcy.

Some of the documents that your bankruptcy attorney will have you prepare ahead of time to bring to the meeting include:

• Paycheck stubs,
• Federal and state tax returns for the past four years,
• Any bank or other financial account statements, and
• Property deeds and titles.

The petitioner is required to answer, under oath, questions that the trustee or any creditors may have.  One of the purposes of the meeting is to make sure the petitioner is not lying about or hiding any assets that could be used to pay off creditors. In most cases, the meeting itself does not last any longer than 15 minutes.

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 Posted on September 04, 2014 in Chapter 7

In order to qualify for Chapter 7 bankruptcy, the U.S. Bankruptcy Court requires a person to pass a “means test.” This means test will determine if your Chapter 7 bankruptcy should be dismissed or if you should actually be filing for Chapter 13 bankruptcy.

In order to pass the means test, the courts look at your income for the prior six months before you filed for bankruptcy and then doubles that figure. That amount must be below the median level for the state you live in. In Texas, the annual median income is as follows:

• Single person household: $41,960
• Two person household: $57,121
• Three person household: $60,440
• Four person household: $69,570
• Add $8,100 per person over four

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 Posted on August 29, 2014 in Bankruptcy

Neither a tax lien nor a tax levy from the Internal Revenue Service is a positive situation, and can certainly have dire consequences for you as a consumer and a taxpayer. A lien simply assigns the government’s right to your assets before any private creditor and is normally a result of unpaid income taxes and can be more than an inconvenience for anyone. In contrast, a levy is much more serious. Fortunately, there are remedies for both scenarios. A tax lien can result in high bills owed, a public filing of the tax lien, as well as attaching the label to every type of property you own.

Although selling the property can certainly help the situation in some cases, it is important to remember that all proceeds will go towards paying the lien, often leaving you in even more hardships. There are other ways to get rid of a tax lien, however, and use of a Texas attorney can make all the difference in how your case is resolved.

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 Posted on August 22, 2014 in Bankruptcy

The minimum wage was a concept put in place to protect workers from the past tyranny of their employers. Larger companies can hold a lot of sway over the heads of individuals depending on a paycheck to put food on their tables and provide themselves and their families with the basic living necessities. This system also prevents businesses and business owners from auctioning off jobs, until men and women are forced to work for cents on the hour.

The problem with Texas minimum wage is exactly what it describes--the smallest amount an employer can legally pay his or her employees. Over the last few years in particular, many people are beginning to ask themselves and their legislatures whether the minimum wage laws are progressive enough to have evolved with society.

The current minimum wage in the State of Texas is only $7.25 per hour, the federally mandated minimum wage. While many other states have their own minimum wage laws that increase this rate, Texas is not one of them. The following statistics about the cost of living in Texas can be startling compared with its already low minimum wage:

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 Posted on August 13, 2014 in Bankruptcy

It is not uncommon for a person to find themselves behind on their income taxes, and many across Texas and the rest of the country suffer from this same problem. Everyone has seen the proverbial person walking through the door of his or her accountant's office with years worth of paperwork in hand. However, this only generally occurs when they receive notices from the Internal Revenue Service or simply have all of their money frozen.

In many cases, filing for bankruptcy can assist you in your financial predicament with the government. First, you should consult a Texas bankruptcy attorney to assess what is really going on and to find the best way to remedy the problem. In this way, it is critical to understand the key differences between a tax levy and a tax lien.

Consider the following deviations between a tax levy and a lien, and why one is more critical than the other to your short and long term financial health:

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 Posted on July 26, 2014 in Bankruptcy

Millions of people across the country have been living under the auspices that securing funds in 401(k)’s, IRA’s, and other long term accounts will ensure the financial stability of both themselves and their loved ones. These accounts are structured to prevent the need for a bankruptcy attorney, especially in the case of an inheritance. However, due to a recent Supreme Court ruling regarding inherited IRA accounts, this may no longer be the case.

Traditionally, companies can offer incentives to employees for the purposes of retention as well as stability including benefits such as pension plans, 401(k)’s, and Individual Retirement Accounts (IRA). Often, these accounts are used for retirement purposes, with many employers matching personal contributions into the account to a certain percentage. These accounts generally have beneficiaries in the event of the death of the policyholder.

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 Posted on July 16, 2014 in Bankruptcy

Americans file for bankruptcy each year as the result of owing more money to creditors than can actually be paid. While often times the term “bankruptcy” is stigmatized and correlated with poor spending habits and large credit card bills, the truth is it is a necessary practice for economic relief in dire times.

Most people who file for bankruptcy are not irresponsible, nor are they trying to use the process as a means of simply walking away from their debt. US News stated in an article, citing a study by The Bureau of Labor Statistics, that as of April 2012 more than 5.2 million people across the country had been unemployed for six months or more. In addition to unemployment as a factor, money lost due to divorce is also a large contributor to outstanding debt, as well as medical expenses.

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