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McKinney Texas Bankruptcy Lawyer

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Bankruptcy Information

1. Will I lose anything if I file for personal bankruptcy?

Generally, you may file a bankruptcy and retain all of your personal belongings, including your house, your car and all household goods. A Texas Bankruptcy Attorney will make sure that all of your personal belongings are protected. If you owe more on your car than the car is worth, the bankruptcy court will not sell your car, because after sale there would be no money left over to make a distribution to your creditors. The same goes for your home and personal property. Even if your property is worth more than what is owed on it, usually we can use the state bankruptcy exemptions to protect these items.

You may be more at risk of losing property if you don't file bankruptcy, as creditors can sue you and attach your bank accounts, garnish your wages and attach and seize your property. As a result, you may miss rent, mortgage or car payments, making it difficult to provide even your most basic necessities.

2. When do I get relief from creditor harassment?

Immediately. As soon as you come into our office, we will give you a client record number and you will then refer all future creditor calls to your bankruptcy attorney. No more credit card payments and no more harassment immediately upon retaining an attorney with our service.

3. Does my spouse have to file jointly with me?

If all or most of the debts are in your name only, your spouse may not have to file. Creditors usually cannot pursue a non-filing spouse, unless he or she is legally a co-debtor on the debt. Additionally, the bankruptcy should not be reflected on the non-filing spouse's credit report. The law does vary, however, from state to state so make sure you ask an Texas Bankruptcy Attorney about whether or not your spouse has to file.

4. Who knows about my personal bankruptcy case?

The only parties that receive notice of the bankruptcy are your creditors, the bankruptcy court and the IRS. Generally, the bankruptcy will have no effect whatsoever on your taxes. Your employer will not be notified of the bankruptcy unless your employer is also a creditor. The bankruptcy is public record, so anyone who wants to find out could determine that you had filed. Generally, however, only you, your creditors and the IRS will know about the bankruptcy.

5. Will I be able to rent after I file personal bankruptcy?

There were over 1 million bankruptcies filed in the United States last year alone. Common sense will tell you that these people are not all living on the street. If you are presently renting a home or apartment, usually your present landlord will renew your lease without running an updated credit report, and will have no knowledge that you even filed a bankruptcy.

If you are applying for a new lease, there could be some slight difficulties that can easily be overcome. We have found that larger leasing companies usually have stricter policies regarding leasing to applicants with blemished credit. Remember that it is the blemished credit report, not necessarily the bankruptcy that is reflecting poorly on your application. Also, with no outstanding debt, you may appear to be a better risk than other applicants who have outstanding debt and blemished credit reports. We find that a good faith gesture, such as offering an extra month security deposit, may be enough for a potential lessor to overcome her concerns about your blemished credit.

6. How do I know if I should file personal bankruptcy?

*Are you calling because you are being sued??If you are being sued, and you own a home, we strongly urge you to speak with a legal professional immediately about filing a bankruptcy. A bankruptcy will stop a lawsuit immediately and prevent your creditors from placing a lien on your home or garnishing your hard-earned wages.

*Is your home being foreclosed or is your car about to be repossessed? If it is, very often bankruptcy may prevent the foreclosure action or repossession from proceeding and allow you to consolidate your mortgage arrears or automobile balance and make payments on those debts over time through a payment plan designed by us with your help. If your house is being foreclosed or your car is about to be repossessed, Chapter 7 bankruptcy may not be an option. Chapter 13 bankruptcy may save your house and your car.

*Do credit cards or medical bills have you so deep in debt that it is hard for you to save for the future? If you are only paying the minimum payment on the credit card bills from month to month (generally from two to three percent of the outstanding balance), and the interest rate is only 15%, you will take about 20 years to pay off a $10,000 debt. Do you really want to be in the same financial situation in twenty years? Chapter 7 bankruptcy can provide you with a fresh start that you are entitled to under the law and get you out of debt NOW.

7. Is filing personal bankruptcy immoral or does it make me a bad person?

Everyone is entitled to a fresh start. Many times, events occur in people's lives that cannot be expected. You may have had a sudden loss in income, a family medical catastrophe, a work injury, or any one of numerous other difficulties that would have been almost impossible for which to plan. Most of the people that we represent are good people who have encountered unfortunate circumstances and just want to get a fresh start. We understand that for most of our clients bankruptcy is the last resort. Many of our clients have a very difficult time determining if personal bankruptcy is the right decision for them.

You must ask yourself? Are the credit card companies concerned about your financial difficulties? Are you paying your creditors instead of saving for your children's education or your retirement? When is the last time you took a vacation? We believe that it is very important for an attorney to provide both bankruptcy and non-bankruptcy alternatives. We believe in giving you our honest opinion as to what will put you in the best possible financial condition now and into your future. The client always comes first. Please search through our listings of available attorneys to find one in your area, don't let creditors ruin your life.

8. How do I choose a Texas Bankruptcy Attorney?

When considering filing a personal bankruptcy, you want to be advised by someone who is familiar and experienced with all of the "ins and outs" of bankruptcy law. Especially when you own a home or car or have other assets that you are trying to protect, you do not want your advice from an attorney who knows a little bit about a lot of different areas of law, but not a lot about bankruptcy. We spend almost all of our time on bankruptcy and getting people just like you out of debt. Educate yourself about your options, but be educated by someone who is qualified.

A Texas Bankruptcy Attorney will provide you with a range of fair fees right over the phone. Beware of any bankruptcy attorney who refuses to give you a fee quote over the phone.

9. Can I get rid of student loans or tax debts?

Any New York bankruptcy attorney must have a sophisticated understanding of bankruptcy law to deal with student loans and tax debts. Until October 1998, student loans were discharged through Chapter 7 bankruptcy if the first payment on the loan became due more than seven years prior to the date of filing. In October 1998, President Clinton signed a new law into effect that disqualified all student loans from discharge. A Texas Bankruptcy Attorney can still help you obtain relief from your student loan debts through the use of Chapter 13 bankruptcy. Under Chapter 13 bankruptcy, our attorneys can consolidate your student loan debt, along with any other outstanding bills, and arrange an interest free repayment plan, so that you do not have to suffer through the burden of garnishments, harassment and other collection efforts by student loan agencies. We may even be able to reduce the amount paid to the student loan agency during the course of your Chapter 13 bankruptcy so that your consolidation payment is as low as possible. If you would like to find out more about how a Texas Bankruptcy Attorney can ease the burden of student loan debts through the use of Chapter 13, search our site for a firm in your area or fill out the free evaluation form.

Tax debts are generally subject to discharge only if you file personal bankruptcy more than three years after you file a timely, truthful tax return. If your return is filed late, the taxes are generally discharged only if you file bankruptcy more than two years after filing a truthful tax return. Of course, these are general rules and you should speak with us, who will perform a detailed analysis of these issues.

10. Can I get credit after filing personal bankruptcy?

Although bankruptcy may legally be reported to your credit report for up to 10 years, you can begin to reestablish your credit immediately. Remember that "credit" is your ability to borrow money. Lenders consider many factors while determining whether to loan you money, but most importantly, they consider your debt-to-income ratio. You are probably visiting this site because you already have more outstanding debt than you have the ability to pay. So, arguably, you do not have credit.

Filing eliminates most, if not all of your debts, therefore reducing your debt-to-income ratio, potentially improving your ability to borrow money in the future. Some financial institutions actively solicit business from people who have filed. Lenders are in business to make money by lending you money and charging you interest. Lenders know that once you have filed, you will not be able to file again for 6 years.

Many of our clients have purchased cars immediately upon receiving their discharge orders. Many lenders have programs that provide for post-bankruptcy borrows to obtain home financing within a year or two after a discharge. Many of our clients even receive solicitations for unsecured credit cards almost immediately upon receiving their discharge. Texas Bankruptcy Lawyers just want to advise you to be careful not to get back into the credit card "trap".

Bankruptcy Articles

Twelve Myths About Bankruptcy
Sometimes, a fresh start makes sense -- if you can get past what you think you know. Here's how bankruptcy affects your credit, your possessions and your karma. Like most big, bad, scary things, bankruptcy has a reputation based on a few tidbits of truth and lots of embellishment. And like most creepy crawlies, it's not nearly as frightening once you know the truth. I'll lose everything I have. This is the misconception that keeps people who really should file for bankruptcy from doing it, says Chris Viale, chief operating officer of Massachusetts-based Cambridge Credit Counseling. "They think the government will sell everything they have and they'll have to start over in a cardboard box," Viale says. With a mind toward declawing the monster, here are a dozen misconceptions about bankruptcy: Everyone will know I've filed for bankruptcy. Unless you're a prominent person or a major corporation and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors. While it's true that bankruptcy is a public legal proceeding, the numbers of people filing are so massive, very few publications have the space, the manpower or the inclination to run all of them. All debts are wiped out in Chapter 7 bankruptcy. You wish. Certain types of debts cannot be erased. They include child support and alimony, student loans and debts incurred as the result of fraud. If you've defrauded someone and a judgment has been made against you, that won't be erased either. While the bankruptcy laws vary from state to state, every state has exemptions that protect certain kinds of assets, such as your house, your car (up to a certain value), money in qualified retirement plans, household goods and clothing. "For most people, they'll pass through a bankruptcy case and keep everything they have," says John Hargrave, a bankruptcy trustee in New Jersey. If you have a mortgage or a car loan, you can keep those as long as you keep making the payments (like the rest of us). I'll never get credit again. Quite the contrary. It won't be long before you're getting credit card offers again. They'll just be from subprime lenders that will charge very high interest rates. "There are innumerable companies that will provide credit to you," says California bankruptcy attorney and trustee Howard Ehrenberg. "I don't advise any of my clients to run out and run up the bills again, but if someone does need an automobile, they can go and will be able to get credit. You don't have to go underground or something to get money." However, if you're planning to buy a house or a car, you might want to do that before you file. Those loans will be tough to get, and the higher interest rate on such a large purchase would make a significant impact on your payments. Also, if you have a credit card with a zero balance on the day you file for bankruptcy, you don't have to list it as a creditor since you don't owe any money on it. That means you might be able to keep that card even after the bankruptcy. If you're married, both spouses have to file for bankruptcy. Not necessarily. "It's not uncommon for one spouse to have a significant amount of debt in their name only," Hargrave says. However, if spouses have debts they want to discharge that they're both liable for, they should file together. Otherwise, the creditor will simply demand payment for the entire amount from the spouse who didn't file. It's really hard to file for bankruptcy. It's really not. You don't even technically need an attorney. However, it's not recommended to go through the procedure without one. Only deadbeats file for bankruptcy. Most people file for bankruptcy after a life-changing experience, such as a divorce, the loss of a job or a serious illness. They've struggled to pay their bills for months and just keep falling further behind. I don't want to include certain creditors in my filing because it's important to me to pay them back someday and if the debt is discharged, I can't ever repay them. Bless you for even thinking about such a thing. You're no longer obligated to repay them, but you always have that opportunity. If your conscience won't let you sleep nights because you didn't pay your debts, there's nothing in the bankruptcy code that prevents you from doing that once you're back on your feet. But bankruptcy is an all-or-nothing deal, so you have to include all your creditors in the petition. Filing for bankruptcy will improve my credit rating because all those debts will be gone. That sounds like an ad for a bankruptcy lawyer trolling for clients. Filing for bankruptcy is the worst 'negative' you can have on your credit report. Unlike other negatives, which stay on your report for seven years, bankruptcy can be there for 10 years. You can't get rid of back taxes through bankruptcy. Generally speaking, this is true. However, there is such a thing as tax bankruptcy, says tax educator Eva Rosenberg, known on the Web as Tax Mama. To get a shot at it, you have to file all your returns and the taxes owed need to be at least three years old. You can only file for bankruptcy once. The truth is, you can only file for Chapter 7 bankruptcy once every eight years, Hargrave says. (Before the new bankruptcy law passed in 2005, you could file every six years.) For Chapter 13 reorganization, you can file more often than that, but you can't have more than one case open at the same time, he says. Of course, that doesn't make it a good idea. "Multiple bankruptcies are really bad," Rosenberg says. "Many people get into the habit of once they've done it, it becomes a way of life. This is not good for your karma." Or your credit rating. I can max out all my credit cards, file for bankruptcy, and never pay for the things I bought. That's called fraud, and bankruptcy judges can get really cranky about it. The trustee in your case will review all your purchases right before your filing. He knows what to look for.
Life After Bankruptcy
by Mark P. Cussen,CFP, CMFC
Valerie looked at the pile of bills on her desk and sighed. She realized that at this point, there was no chance that she would be able to pay off the debts that she had accumulated over the last few years. Between her medical problems and losing her job, she had depleted all of her savings and maxed out all of her credit cards, and could no longer even make the minimum monthly payments on them. Her rent and car loan were past due, and the temporary job that she was working would hardly cover her current expenses. She pushes the bills to the side and decides to talk to a bankruptcy attorney about her situation. One week later, Valerie finds herself filling out the Chapter 7 paperwork. Unfortunately, Valerie's situation is all too common - in fact, Mark Twain, Walt Disney, Donald Trump and Henry J. Heinz all filed for bankruptcy at some point in their lives. If you think bankruptcy could be looming for you as well, read on to discover what you can expect and what to watch out for after filing for personal bankruptcy. You've Filed - Now What? For the individuals who have declared bankruptcy, the recovery process is long and difficult. The first step comes when you and your bankruptcy trustee meet with your creditors to inform them of the bankruptcy, at which time any non-exempt assets that you have must be liquidated. You will be allowed to keep your furniture, your car and your personal belongings up to a certain value, but any non-exempt liquid assets such as cash or certificates of deposit (CDs) must be turned over to a court-appointed trustee. But liquidating your assets is only the first of many issues that must be dealt with as the consequences of your bankruptcy begin to unfold. Getting a loan of any kind will be extremely difficult for the next couple years, although it is possible to regain a better score and even some types of loans after only a year. However, the lenders that will finance you will probably be from finance companies that charge exorbitant rates of interest. In some cases, it may not be possible to get credit at all for major purchases, such as a car or home. These issues will remain for the next 10 years under a Chapter 7 bankruptcy. If you file a Chapter 13 bankruptcy instead, this kind of bankruptcy will often disappear from your credit report after only seven years. However, this type of bankruptcy also requires that you pay back all of your debt within three to five years according to a set payment plan. Because there are six types of bankruptcy filings, it is important to contact your lawyer to make that you file the one that best suits your financial position. Take Back Control Here are a few steps that you can take to help regain control of your situation: * Maintain a Job: It is vitally important that you get - and keep - a job as soon as possible, if you don't have one already. Finding a good place to live ranks a close second, if this is an issue as well. A stable residential and employment history is necessary because it shows creditors that you are reliable. Unfortunately, a growing number of landlords are starting to check credit references as a means of screening out possible unreliable tenants. If you are not able to rent an apartment to your liking, then you may have to room with a friend or relative until your credit improves. Furthermore, employers may also request credit scores and histories of their potential applicants as a measure of personal responsibility. Therefore, a little bit of bad luck can fuel a vicious cycle that may prevent you from getting a job that pays enough for you to pay off your debts. * Pay Your Bills: It is imperative that you stay current on all of your monthly bills and other payments so that your post-bankruptcy credit record stays clean. * Keep a Bank Balance: Opening and maintaining a checking and/or savings account is also necessary. But more banks and insurance companies are evaluating their customers' credit records before taking on their business. After declaring bankruptcy, insurance companies may feel that you are at risk of being unable to pay your premiums, just like having a history of charged-off bank accounts could hinder your ability to open a new checking account. Fortunately, many banks offer some sort of second-chance program for people in this situation. Keeping a positive balance in all accounts at all times will show employers and creditors that you now have a reliable cash flow. * Start to Rebuild your Credit: During bankruptcy, it is important to start to build up what you so quickly tore down. To rebuild your credit you may need to obtain a credit card. If you learn how to use it wisely it will demonstrate to lenders that you can manage your money and that you are determined to slowly rebuild your flawed credit history. This is only a viable option if you can control the credit and not let it control you. If you find yourself racking up debt again, you should cancel your card immediately and start a repayment plan. Fixing your credit rating is a good thing only when you can handle the credit itself. Keep in mind that the interest rate on any card you are eligible for will likely be higher than the average credit card. When the time comes to buy something larger with debt (such as a car or house), you may need to have another party, such as your parents, co-sign the loan. Without this, you may not be able to obtain financing at all; with it, you may be able to get something resembling decent terms on your loan (depending on the credit score of the co-signer). However, if credit is not available, then you may simply have to wait until you can pay for a car with cash or consider a personal loan from your relatives and/or friends. Conclusion Although recent legislation has made it more difficult for Americans to declare bankruptcy, bankruptcy is still far too common. Using your post-bankruptcy income and credit wisely is the key toward rebuilding your rating and standing on your own two financial feet again. If you can prove to lenders and employers that your post-bankruptcy life is in order, then this obstacle, too, will pass. Remember, Mark Twain, Walt Disney, Donald Trump and Henry J. Heinz all went on to have prosperous futures - and if you can put your bankruptcy behind you, so can you. by Mark P. Cussen,CFP, CMFC (Contact Author | Biography) Mark P. Cussen has more than 15 years of experience in the financial industry, which includes working with investments, insurance, mortgages, taxes and financial planning. He has two years of experience in writing and editing insurance and securities test training manuals, as well as other financial topics. He has also worked in retail, discount and bank brokerage systems and been involved in a venture capital enterprise in the oil and gas sector. Cussen has a Bachelor of Science in English from the University of Kansas and completed his CFP coursework at the Bloch School of Business at the University of Missouri-Kansas City in August of 2001.

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