Texas Bankruptcy Blog : Texas Bankruptcy Lawyer & Attorney : Fears Nachawati law Firm : Chapter 7, Chapter 13, Consumer Bankrutpcy : Dallas, Fort Worth, Austin, Houston, San Antonio

Here are five situations that should tell you that your finances are in desperate shape and may need federal bankruptcy relief:

You regularly ask for payroll advances from your employer, take cash advances from credit cards, or borrow from payday loan companies.

Once a person is borrowing next month’s paycheck to pay this month’s bills, the situation is very grim. Taking constant payroll advances can jeopardize your job; credit card cash advances carry very high fees and interest; and payday loans have high interest rates. All of these advances have the same effect on your paycheck: there is less money next month to pay bills. This often creates an endless cycle of debt.

You are constantly late on paying basic monthly obligations including rent or mortgage, car payment, or utilities.

Late penalties can consume a paycheck very quickly. Late payments can also place your property at risk. For instance, if you are consistently late on your car payment, not only will you incur late fees, but at some point your lender may decide to repossess your vehicle.

You have stopped paying creditors and are ignoring collectors.

People who are unable to pay monthly bills often compound the problem by ignoring their creditors. Late notices turn into harassing phone calls which turn into court summonses which turn into wage garnishments. Nothing good can come from ignoring your debts.

Your paycheck is being garnished or your bank account is frozen.

People unable to pay their debts often wind up with court judgments and wage garnishments. Bankruptcy attorneys regularly receive desperate phone calls from people who have just discovered a wage garnishment or bank levy.

You are consistently depressed by a hopeless debt situation and contemplate illegal acts or suicide.

Individuals in debt often become depressed and feel that their situation is hopeless. Not so! The federal bankruptcy laws were written by Congress to give hope to those overwhelmed by debt. You can have a fresh financial start and a different future. There is no reason to commit an illegal act to solve a debt problem that can be fixed legally.

If you are experiencing any of the above warning signs, talk to an experienced bankruptcy attorney and consider your legal remedies. Don’t let debt control your life or your future. Take charge today!

Bankruptcy is the process by which a person legally declares themselves unable to pay their creditors for their outstanding debts. In general, bankruptcy proceedings are governed by federal law, but there are some aspects of bankruptcy that are governed by state law.

These state laws can vary considerably from one another, so it is important that you speak with an experienced Texas bankruptcy attorney to be sure you understand Texas’s bankruptcy laws.

A person can go into bankruptcy in one of two ways. One way is for the debtor’s creditors to petition the court to have the debtor declared bankrupt. The more common way is for a person to voluntarily file for bankruptcy.

There are several types of bankruptcy, and which type you file for depends on many factors, including whether you are a business or an individual, the amount of debt you have, the amount of income you have and your personal financial goals.

For individuals, the two most common types of bankruptcy are Chapter 7 and Chapter 13. Chapter 7 “wipes the slate clean,” so to speak. Most, if not all, of your debts are discharged, and you get a chance to start fresh.

Chapter 13 is a debt repayment plan. You get to keep all of your property in exchange for committing to a plan whereby you repay some or all of your debt over the course of 3 to 5 years.

For free legal advice from a Texas bankruptcy attorney, contact Fears | Nachawati today. You can email us or phone us toll free at 1.866.705.7584.

There are two basic types of bankruptcy: liquidation and reorganization.

Chapter 7 falls into the liquidation category. It is referred to as a liquidation bankruptcy because any of your property that isn’t exempt can be sold (“liquidated”) and the proceeds used to pay back your creditors.

Chapter 13 is a reorganization bankruptcy. Under a Chapter 13 bankruptcy, you get to keep all of your property. Rather than wiping out your debts completely, a Chapter 13 bankruptcy “reorganizes” your debts, and a monthly payment plan is created by which you repay all or some of your debt over the course of 3 to 5 years.

Whether liquidation or reorganization bankruptcy is right for you depends on your financial situation and other individual circumstances. An experienced Texas bankruptcy attorney can advise you on the most beneficial course of action.

For free legal advice on Chapter 7 and Chapter 13 bankruptcy, contact the Texas bankruptcy law firm of Fears | Nachawati today. To speak with a Texas bankruptcy lawyer at no charge, simply email us or phone us toll free at 1.866.705.7584.

Bankruptcies are reported by credit reporting agencies. The number of years for which a bankruptcy will stay on your credit report depends on the type of bankruptcy you filed. A Chapter 7 bankruptcy, for example, will stay on your credit report for 10 years, while a Chapter 13 bankruptcy will be reported for 7 years.

Your credit report is used by credit card companies and lenders to determine your creditworthiness. However, having a bankruptcy on your credit report does not automatically mean that you can’t obtain credit.

Some credit card companies are willing to extend credit to people who have filed bankruptcy. Typically, though, you will have a higher interest rate and/or lower credit limit than someone who has not filed bankruptcy.

It is also worth noting that some creditors will see a person as a better credit risk after they have filed for bankruptcy because they have less debt, they are in a better position to repay new debt and they can’t file a Chapter 7 bankruptcy again for another 8 years. If you filed a Chapter 13 bankruptcy, then you have shown that you can manage regular payments.

If you take the proper steps to responsibly rebuild your credit after you file for bankruptcy, you can improve your credit standing within a few years.

For free legal advice on Texas bankruptcy, contact the law firm of Fears | Nachawati today. To receive free legal assistance from a Texas bankruptcy lawyer, email us or phone us on our toll free number at 1.866.705.7584.

There is no requirement that married couples have to file for bankruptcy together. A husband or a wife can file bankruptcy separately.

If most of the debts belong to only one spouse, then it may be the best choice for that spouse to file for bankruptcy alone.

However, most spouses own at least some property jointly and have the same debts. In these cases, the creditors can still go after the non-filing spouse for repayment of the debt.

The precise effect that bankruptcy will have on the non-filing spouse depends on the marital property laws in the state where you live.

For free legal advice on bankruptcy, contact Fears | Nachawati. To speak with one of our experienced Texas bankruptcy lawyers, email us or phone us toll free at 1.866.705.7584.

Many professionals, including bankruptcy attorneys, will advise a debtor who is unable to pay monthly debts to “investigate your options.” So how many “options” does a person have when there is not enough money to pay the bills? The answer is: three. 

The first is the “Do Nothing” option. Debtors who engage in this option hope that by avoiding phone calls and collection letters the debt will somehow just disappear. That is the same magic that makes a two year old become invisible when she closes her eyes. Obviously if you won’t see it, the collection companies can’t see it.

The “Do Nothing” option is the worst option of all because the debt does not disappear. In fact, the debt becomes bigger with increased fees and interest. Additionally, the debt collection efforts become more aggressive and may result in harassing telephone calls to family, neighbors, or your employer. Finally, you will likely be sued, your property seized or your income garnished.

The second option is “Negotiation.” Many debtors have had positive experience with this option which may include direct negotiation with the creditor for better terms, or help through a third party like a credit counselor or an attorney. Unfortunately, many people do not realize the consequences of negotiation which may include a resulting tax debt, negative items on a credit report, increased debt through fees and default interest rates, and substantial third party fees. It is well documented by the media and state attorney generals that many debtors that attempt the Negotiation option (e.g. credit counseling, debt settlement, debt negotiation, etc.) end up in worse financial shape because they opted for debt negotiation. If you elect the Negotiation option, hire a qualified and experienced professional.

The final option is “Bankruptcy.” Many professionals describe Bankruptcy as the “final option,” but in truth it may be the best option when you cannot pay your bills. Bankruptcy can give an honest debtor breathing room to reorganize debt without the pressures from collection agencies. Bankruptcy can also legally discharge debt without increased fees or tax consequences. At the end of a bankruptcy case the debtor can go forward with a “fresh start” and new financial beginning.

If your family is struggling with more month than money, it is time to examine your options. In the end, choose the option that is best for your family. Speaking with a qualified bankruptcy attorney can answer many of your debt questions.

For free legal advice from a Texas bankruptcy lawyer, contact Fears | Nachawati today. You can email us, or phone us toll free at 1.866.705.7584.

A creditor is sometimes forgotten or overlooked when preparing the debtor’s bankruptcy schedules. Even the most diligent individual can occasionally forget a past debt. When this happens, the bankruptcy law offers several remedies:

First, if the debt is remembered during the bankruptcy, the debtor is required to file amended schedules and identify the creditor. It is important to ensure that your schedules are honest and accurate, so let your bankruptcy attorney know immediately if you remember an old debt.

Second, sometimes a debtor will discover a pre-bankruptcy debt after the bankruptcy case has closed. How this omitted debt is handled depends on the court and the circumstances. In some cases it may be prudent to ask the bankruptcy court to reopen the bankruptcy case and discharge the debt. In other cases the debt may be considered discharged as a matter of law - in other words, the bankruptcy discharge took care of that debt even though it wasn’t listed in the schedules. Finally, in some rare cases the debt cannot be discharged and the debtor is simply stuck with it.

The bankruptcy courts expect the debtor to be open and honest in describing assets and debts. Failure to list a creditor means that the creditor did not receive notice of the bankruptcy case and was not given an opportunity to protect its interests during the case. In cases where there are no assets for creditors, inadvertent omission of a creditor will not matter much. On the other hand, an omission matters a great deal in cases where creditors are paid. An intentional failure to list a creditor can cause that debt to be declared non-dischargeable and survive the bankruptcy. In extreme cases courts have denied a bankruptcy discharge because of the debtor’s intentional failure to list all debts.

In bankruptcy, honesty is the best policy. Fully disclose all of your assets, debts, income, and expenses to your bankruptcy attorney. If you forget something, let your attorney know as soon as possible. Your attorney can advise you on the best course of action.

To receive free expert bankruptcy advice, contact the law firm of Fears | Nachawati. Simply email us at info@fnlawfirm.com or call our toll-free number at 1.866.705.7584.

Residents living in Texas are subject to wage garnishment by the IRS. The IRS commonly uses wage garnishment as a way to collect taxes and penalties that are owed. A wage garnishment requires an individual’s employer to withhold a portion of the taxpayer's pay each period and send it to the IRS. In most cases, the individual is not left with enough money each month to pay basic living expenses. A wage garnishment will remain in effect until the taxes and penalties owed are paid in full or until a wage garnishment release is issued.

The only other time the wage garnishment can be stopped for a debt to the IRS (or any  other creditor) is to file for bankruptcy. When you file for bankruptcy, an automatic stay is put in effect. This means that all garnishments, liens or other collection activity by the IRS and creditors will stop immediately. In some cases, you may even be able to get back some of the wages that were garnished.

For more information on how a bankruptcy can help you put an end to wage garnishment, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com.

Benefits of Chapter 7 Bankruptcy

When you file for a Chapter 7 bankruptcy, an automatic stay is placed on your debts. This means that your creditors must stop collection activity, including liens, and attempts to foreclose and repossess your property.

Contrary to what some creditors or collection agencies may tell you, there is nothing illegal about filing for bankruptcy. In fact, it is your right to file for bankruptcy.

Court fees

The court fee to file a Chapter 7 bankruptcy in Texas is approximately $299. For more information go to: www.txnb.uscourts.gov/Clerks-Office/Filing-Fees.

Bankruptcy attorney fees

Many bankruptcy attorneys are willing to work out a reasonable payment plan so you
can file for a Chapter 7 bankruptcy as soon as possible to avoid a lien on your paycheck, a foreclosure on your home or repossession of your vehicle. Additionally, most bankruptcy attorneys offer a free consultation to discuss your specific financial situation and to determine if a Chapter 7 bankruptcy is the best choice for you.

Contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or by e-mail at info@fnlawfirm.com  for more information on what bankruptcy can do for you.