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San Antonio Bankruptcy Options
When bills start piling up and you don't have the income to cover them, life gets complicated. Most minds turn right to bankruptcy as a last resort, but there are other options.
Simple ways to avoid going into debt from Money Management include:
1. Have sufficient insurances. Many studies show that bankruptcies are often caused by medical reasons. When something out of the ordinary comes along, such as an unexpected surgery that is not covered by medical insurance.
2. Adjusting spending according to income. There are many items that people buy that could be exchanged for less expensive items and other items may not be in a new budget that is created to pay off debts.
3. Try to settle debts. Sometimes debts can be settled for less than the full value, which could be an important step in diminishing debts.
Insured Patients and Bankruptcy
Many people assume most bankruptcy filings are due to out-of-control spending habits or poor money management. However, according to a study published in The American Journal of Medicine, one of the biggest reasons people file for bankruptcy is unpaid medical bills.
More surprising is that many who file for bankruptcy due to medical bills have health insurance. So even with the expansion of health care coverage through the Affordable Care Act, there will still be people struggling under the weight of medical bills. Understanding the expenses related to health insurance can help you be financially prepared.
Monthly Premiums
Unless you have an employer covering your full monthly premium, most people will have to pay at least part of this to have health insurance. The amount you’ll pay for your monthly premium has many variables, including the amounts set for your deductible, co-payments and co-insurance.
A 341 Meeting in Texas: Bankruptcy Basics
Deciding whether or not to file for bankruptcy can be one of the most important decisions a family makes. Some families put off the process as long as possible hoping to avoid the stigma that comes with filing for bankruptcy, but in many cases it’s the easiest, simplest, and most effective way to recover from financial insolvency. Following the financial crisis of 2008, from which many Texans are still recovering, bankruptcy became a more important option than ever.
But it’s a complicated process, one that has many different steps and processes depending on which type of bankruptcy the debtor is filing. Though local rules govern each bankruptcy court, the overall procedure of filing bankruptcy is overseen by Federal Rules under the Bankruptcy Procedure, set forth by the U.S. Court system and laid out in the U.S. Bankruptcy Code. There are two main types of personal bankruptcy: Chapter 7, in which the debtor liquidates his assets and his debts; and Chapter 13, in which the debtor goes through a debt reorganization process. In a Chapter 7 filing, the debtor never appears in court, and only sees the judge if an objection is raised in the case. In a Chapter 13 filing, the debtor will likely appear before a bankruptcy judge only at a plan confirmation hearing.
How Payment Methods Influence Consumer Spending Habits
Americans say that they are spending less money on extras like restaurants, bar tabs and the like compared to 2012. That is according to a survey conducted by the consumer research team Mintel. They surveyed Americans about consumer spending habits for thirteen different categories. The only two categories that consumers admitted to spending more on were groceries and household care items.
This might not be the case according to consumer spending data. That research has shown that spending has increased for several of the categories surveyed by Mintel by as much as five percent. This discrepancy could be caused by a small percentage of consumers who have spent more money on luxury and big ticket items.
Filing for Chapter 7 Bankruptcy
When someone files for personal bankruptcy, they typically file for either Chapter 13 bankruptcy or Chapter 7 bankruptcy. Under Chapter 13, a payment plan is set up for the debtor to pay back all of the debts, whereas, under Chapter 7, the debts are forgiven.
When a person files for Chapter 7 bankruptcy, these are some important steps to take early on:
The person in debt (debtor) must file a bankruptcy petition with the court, along with a list of assets and liabilities, a list of income and expenditures, a financial affair statement and a list of all current leases
- Once the petition has been filed, debtors must also have tax documents available to hand over to the case trustee
- If the majority of the debts are consumer debts, the debtor must also file a certificate of credit, a copy of a debt repayment plan from credit counseling if there is one, evidence of payment from employers and any interest in qualified education or tuition accounts
How Bankruptcy Affects Retirement Planning
When it comes to retirement planning, people face many questions and choices. Some wonder what types of investments are best for them. A popular retirement planning tool is an IRA, which stands for Individual Retirement Account. As the name suggests, it is an investment vehicle designed to ensure income during retirement. They were first introduced in 1974, with the passage of the Employee Retirement Income Security Act (“ERISA”). 26 U.S.C. § 7701(a)(37). Since their creation, Congress has acted to increase the contribution allowed and the protections against creditors.
Congress recognized that people work hard during to build enough savings in their 401(k)s and retirement funds to provide for retirement. As such, they thought it necessary to protect retirement money from creditors in a case of bankruptcy. Yes, persons who file for Chapter 7 or Chapter 13 bankruptcy get to keep their retirement funds.
Texas Deceptive Trade Practices Act saves bankruptcy case
While proving whether the defendant broke the law is all that must be done in most court cases, it is not always that simple. Sometimes, judges must rely on past cases to determine the outcome of a current court case, and that is exactly what had to be done in Texas not long ago in bankruptcy court.
The United States District Court for the Northern District of Texas heard Carroll v. Faroogi in February and agreed with a U.S. Bankruptcy Court’s decision that an individual has standing to pursue an action against a franchise or under the Texas Deceptive Trade Practices Act (DTPA).
The case was about an unsuccessful sale of a Salad Bowl franchise. The CEO (who is also president, chairman and CFO) of the franchise company contacted a potential buyer of his franchise and the buyer, then signed a thirty-day option contract and paid $25,000 to the CEO for the franchise fee. The buyer, unfortunately, was unable to line up suitable financing to complete the purchase and demanded that the CEO refund him his initial $25,000 fee.
Texas Congressman Ruben Hinojosa emerges from bankruptcy
When people think of bankruptcy, they often think of foreclosed homes, people with cardboard signs on the sides of highways and old raggedy clothing. That is often not the image of a bankrupt person, however; sometimes the people that file for bankruptcy are those with great jobs and just more debt than income. In Dec. of 2010, Rep. Ruben Hinojosa (D-Texas), had to file for personal bankruptcy. According to a court document, he recently emerged from the Chapter 11 bankruptcy.
The document, which was issued by the U.S. Bankruptcy Court in Southern District of Texas, provided a final decree that closes Hinojosa’s bankruptcy case.
Hinojosa has been serving in Congress since 1997, had a debt of $2.9 million at the time he declared bankruptcy, including $2.6 million claimed by Wells Fargo Bank. Hinojosa stated that his bankruptcy was due to a loan that he had secured to rescue H&H Meat Products, a slaughterhouse that was founded by his father and uncle, after the company declared bankruptcy in 2008.
In a statement at the time of the filing, Hinojosa, who, ironically, is currently sitting on the House Financial Service Committee, said, “I have done everything humanly possible to avoid filing for bankruptcy protection to no avail. The bank debt of H&H was more than I could handle financially.”
Although House members are required to disclose personal financial documents with Congress each year, nothing prevents members that are indebted to banks from serving on the House Financial Services Committee.
Hinojosa’s annual congressional salary is $174,000. His debt stood in large contrast the wealth of about 249 members of Congress, 47 percent, who were reported as millionaires in 2011.
In the five months that followed Hinojosa’s bankruptcy filing, documents revealed that the congressman spent thousands of dollars on unnecessary expenses, such as $1,800 on clothes, $680 on cleaning services and $540 in allowance to his children.
If you are considering filing for bankruptcy, contact a bankruptcy lawyer in San Antonio, Tex. today. Attorney Chance M. McGhee will help you with your bankruptcy filing now.
Photo courtesy of cooldesign/FreeDigitalPhotos.net
Determining Wants vs. Needs while Budgeting
It has been reported that unemployment rates are improving and that people are spending more money than ever. Bankruptcy filings are falling in number in many parts of the country. Even though it seems that Americans are doing better financially, you can ensure continued development by creating a budget. When preparing your budget, you have to determine what the necessities are for you.
Some basic necessities that must be included are food, shelter, utility service for that shelter, clothing, and transportation. The problem with budgeting these necessities is the degree to which each is carried out.
Everyone needs a place to live. However, a place to live must be affordable within your budget. For example, if you have a small family, you don’t need to have a large home. Instead of spending the additional money on space that you do not need, you can be setting that money aside for savings. This also means that you do not have to have 75-inch television sets in every room.
You also need to have utility service but, that does not mean that you have to have every single channel that your TV service provider offers. Considering a Netflix subscription in place of cable, or opting to open the windows and run fans instead of an air conditioner are responsible options for sticking to a utility budget.
We all need food to survive. This does not mean living on fast food or fancy restaurants is necessary. Fix just enough food to ensure that all of it will be consumed by your family instead of being wasted. You can also shop at stores that are less expensive, such as a store that doesn't have employees to remove shopping carts from the parking lot or one that does not provide plastic bags for free.
When considering clothing and transportation, again, be cost efficient. You do not have to have a Ferrari when an inexpensive car will do what you need. Secondhand clothing stores are less expensive and often have quality clothing.
The point is to live within your means. Stick to your budget and do not spend money that you do not have to spend. If you find yourself considering bankruptcy, an experienced San Antonio bankruptcy attorney can assess your situation and advise you of the options available to you.
Photo courtesy of patpitchaya/freedigitalphotos.net
Chapter 13 Bankruptcy Can Help Stop Foreclosure
The FDIC provides some troubling statistics about foreclosures. One out of every 200 homes will be foreclosed upon. Every three months, 250,000 homeowners enter foreclosure. One child in every classroom in America is at risk of losing his/her home because their parents are unable to pay their mortgage.
There are ways, however, to avoid foreclosure and work towards saving your home, even for a homeowner who has fallen so far behind that the mortgage lender has scheduled an auction. Filing for Chapter 13 bankruptcy will stop that foreclosure sale. When you file for bankruptcy, there is an automatic stay put into place that prohibits most creditors from continuing collection activities. This stay includes foreclosure sales.
Chapter 13 also allows you to cure the mortgage default and catch up with your loan. Many times, when a homeowner gets behind on their mortgage payments, the lender either won’t do a loan modification with the homeowner, or offers a repayment plan that is too high for the homeowner to keep up with, resulting in the foreclosure sale.
A Chapter 13 bankruptcy allows you to repay your debts over a three to five year period. For example, let’s look at a homeowner who is paying $1500 per month for their mortgage and they owe an arrearage of $15,000. Chapter 13 will spread that $15,000 over sixty months (five years) at $250 per month, meaning the homeowner will now be sending the mortgage company $1750 per month ($1500 for current mortgage, $250 for arrearage). If the court approves that payment plan, the mortgage company has to accept it. They cannot decline and foreclose.
If you are facing foreclosure, contact a knowledgeable Texas bankruptcy attorney to help save your family’s home. Email us today in San Antonio for a consultation. We can answer any questions you may have about how a Chapter 13 bankruptcy can help save your home from foreclosure.
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