Filing for bankruptcy can be a daunting and complex process, with various chapters offering different solutions to financial challenges. For people struggling with overwhelming debts and the fear of losing their vehicle through a repossession, Chapter 13 bankruptcy might provide a potential solution. If your car has been taken away in the last ten days or you are concerned that it may be taken and you live in Texas, our lawyers can help you file for Chapter 13 so that you can get your car back. Here is how. 

Understanding Chapter 13 Bankruptcy

Chapter 13 Bankruptcy, also known as a wage earner’s plan, allows people with regular income to restructure their debts and create a manageable repayment plan. Unlike Chapter 7 bankruptcy, which involves liquidating assets, Chapter 13 focuses on debt reorganization and repayment over three to five years. 

Car Repossession and Chapter 13 Bankruptcy 

If your car has been repossessed or you fear it might be in the near future, Chapter 13 bankruptcy can help you regain possession and prevent further repossession attempts. When you file for Chapter 13, an automatic stay is immediately implemented, halting all collection efforts, including car repossession. 

Bankruptcy is a legal process that provides individuals and businesses with a fresh start by eliminating and restructuring their debts. When navigating bankruptcy, it is essential to understand the distinction between secured and unsecured debt. If you are involved in bankruptcy proceedings in Texas, contact a lawyer to ensure your rights are protected as you move through the bankruptcy process in Texas.

Definition of Unsecured Debt

Unsecured debt refers to any debt that is not supported by collateral or a specific asset. Unlike secured debt, which is tied to a specific property (such as a mortgage or car loan), unsecured debt is not directly linked to any particular asset. Examples of common unsecured debts include credit card debt, medical bills, personal loans, and certain types of student loans. 

Treatment of Unsecured Debt in Bankruptcy

In bankruptcy proceedings, unsecured debt is typically treated differently from secured debt. When a debtor files for bankruptcy, the court will prioritize the repayment of secured debts over unsecured debts. This is because secured debts have collateral that can be repossessed or sold to satisfy debt. On the other hand, unsecured debt does not have such collateral, making it a lower priority in the repayment hierarchy.

Fast cash needs may make payday loans look like a quick fix. But these short-term loans' high fees and interest rates can spell trouble for borrowers. Repaying on time gets harder when extra costs pile up, starting a debt cycle that is a struggle to escape.

What Rules Exist for Payday Loans in Texas?

Texas regulates payday lending but does not cap fees or interest. With no limits, costs can soar and make repayment within the loan term tougher for borrowers. Payday loans typically range from $100 to $1,000 and are due when the borrower's next paycheck arrives. Failing to repay on time can mean extra fees to extend the loan or taking out a new one to cover the old debt. This can quickly add up and lead to an unmanageable situation.

Seeing the Risks of Payday Loans

The steep fees and rates on payday loans can prevent borrowers from paying them off by the due date. This starts a cycle of borrowing and debt that's hard to break.

Bankruptcy proceedings, often seen as a last resort during severe financial adversity for individuals and businesses, can paradoxically offer a lifeline and the opportunity for a fresh start if managed correctly. Here are eight common mistakes to avoid if you need to file for bankruptcy in Texas.

Dismissing Bankruptcy as a Potential Debt Management Solution

Bankruptcy can strike fear in many, given its stigma and possible repercussions on your credit record, deterring you from exploring this avenue. However, outright refusal to consider bankruptcy a potential solution could prolong your financial difficulties. Bankruptcy can allow the restructuring or even eliminate some debts, marking it as a feasible strategy in numerous scenarios.

Procrastinating and Hesitating

A recurring error is waiting too long or deferring the choice to file for bankruptcy. This often leads to people incurring late charges, penalties, and accrued interest, which compounds their financial plight. It is imperative to consult a legal expert promptly when your debts appear unmanageable to circumvent the problem's escalation.

Divorce and bankruptcy can be overwhelming experiences. Specific rules regarding the division of assets, debts, and other financial matters must be considered when going through a divorce or filing for bankruptcy in Texas. It is essential to understand these laws to protect your financial future.

Understanding the Connection Between Divorce and Bankruptcy

In the United States, financial problems are a major reason for divorce. Dividing assets, paying legal fees, and adjusting to living on a single income during a divorce can create financial strain, leading to bankruptcy. On the other hand, bankruptcy can also stress a marriage and divorce.

When to File for Bankruptcy and Divorce

Filing for bankruptcy and divorce simultaneously can cause complications and negatively affect both processes. It is recommended to keep them separate unless there is a significant joint debt situation. If this is the case, filing for bankruptcy before the divorce can simplify the division and distribution of marital property by discharging debts.

Managing healthcare expenses, as well as medical bills, can be difficult. But there are ways to decrease these expenses and potentially reduce your medical debt. Here are some important factors to consider when dealing with medical debt in Texas.

Understanding the Medical Bill

To avoid confusion, it is crucial to know why you are being charged in medical bills. These bills can contain complex codes and language that might not be familiar to you. You can ask for a detailed bill that explains the cost of each service. This can help you identify mistakes or repeated charges that you can question.

Insurance Verification

Ensure that your healthcare provider has all the correct insurance information. Miscommunications between the provider and the insurance company can sometimes result in charges that should have been covered. Review your insurance policy to understand what is covered, and cross-check it with your bill. This will help you identify any discrepancies that need to be addressed.

Managing credit card debt can be a challenging endeavor for many individuals. It is crucial to be aware of the specific laws and protections in your state to effectively navigate this financial burden. This blog post will cover the significant Texas statutes and defenses that you should keep in mind when dealing with credit card debt.. The laws on credit card debt can change with time, though, so be sure to connect with a lawyer.

Statute of Limitations on Credit Card Debt in Texas

In Texas, there is a statute of limitations for credit card debt which means creditors have four years from the date of the last payment or acknowledgment of the debt to file a lawsuit and collect the debt. After this time, they cannot sue to collect the debt. It’s important to be aware that making a payment or acknowledgment could restart the statute of limitations, so it’s best to seek legal advice before taking any action.

Exemptions for Credit Card Debt in Texas

There are certain exemptions under Texas law that prevent creditors from taking certain kinds of property to pay off credit card debt. Examples of such exempt property include:

Facing the possibility of foreclosure can be an incredibly stressful and overwhelming experience. However, if you are a homeowner in Texas, legal avenues are available to help you protect your home and avoid foreclosure. While not every option is available to each person, knowing what is out there for resources is beneficial.

Understanding the Texas Homestead Exemption

In Texas, homeowners are fortunate to have strong homestead protections. The Texas Homestead Exemption safeguards a portion of the equity in your home from creditors. When filing for bankruptcy, this exemption can be instrumental in helping you retain your home. However, it is important to consult with an experienced bankruptcy attorney to ensure you understand the specific limits and requirements of the homestead exemption based on your unique circumstances.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is often an effective strategy for homeowners seeking to prevent foreclosure. This type of bankruptcy allows you to reorganize your debts and establish a repayment plan. By filing for Chapter 13 bankruptcy, you can halt the foreclosure process and develop a manageable repayment plan to catch up on missed mortgage payments over three to five years. Working closely with a bankruptcy attorney who can guide you through the Chapter 13 process and help you craft a feasible repayment plan that suits your financial situation is crucial.

Filing for bankruptcy can be a complex and overwhelming process, but it can also provide relief and protection for those struggling with debt. If you’ve recently filed for bankruptcy in Texas, it is essential to understand your legal rights and protections to ensure you’re taking advantage of all the benefits available. This blog post will explore the key legal rights and protections available to Texans after bankruptcy, including the automatic stay, discharge of debts, exemptions, reaffirmation agreements, and credit reporting.

The Automatic Stay

After filing for bankruptcy, Texans can benefit from an essential legal protection called the automatic stay. It is a court order that prevents most creditor actions against you. This includes collection activities such as calls, letters, and lawsuits, which creditors must stop immediately.

The automatic stay is helpful to debtors harassed or threatened by creditors. It can also stop creditors from taking actions like wage garnishment, home foreclosure, or car repossession while in bankruptcy. However, it is important to remember that the automatic stay is not permanent and can be lifted if a creditor asks the court to lift it.

Student loan debt can be overwhelming and stressful, especially for those struggling to make monthly payments. Not to mention, when you are confident you qualify for student loan debt relief but cannot figure out why you got denied.

In Texas, several options are available to help individuals manage their student loan debts and get back on track. It is not uncommon to be wrongly denied when you apply for one of the topics. First, we will cover your options and then go over what you can do if you find yourself in this situation.

Income-driven repayment plans

Enrolling in an income-driven repayment plan is one of Texas’s most popular options for student loan debt relief. These plans link your monthly loan payment amount to your income and can offer much-needed help for those having difficulty making ends meet. Income-Based Repayment (IBR), Revised Pay As You Earn (REPAYE), and Pay As You Earn (PAYE) are some of the different types of income-driven repayment plans available.

Payday loans are a prevalent form of short-term borrowing in Texas, often sought after due to their ease of access and quick approval process. However, disputes can arise, and understanding your rights and seeking legal help can be crucial in resolving such issues.

Texas Payday Loan Regulations

Key regulatory bodies and laws governing payday loans. In Texas, payday loans are regulated by the Texas Office of Consumer Credit Commissioner (OCCC) and the Texas Finance Code. The OCCC enforces state laws and ensures lenders comply with the regulations designed to protect borrowers.

Borrower's rights under Texas law

Under Texas law, payday lenders must hold a valid license and adhere to the following restrictions:

At the end of a successful bankruptcy case, a filer’s qualifying unsecured debt load is discharged by the court. After a specific debt balance has been discharged, the filer is no longer responsible for its repayment and creditors can no longer ask that it be repaid. Although not all unsecured debts are dischargeable in bankruptcy, two of the most common sources of financial anxiety for American families – credit card debt and outstanding medical bills – are dischargeable upon the conclusion of a successful bankruptcy case.

There are two primary reasons why eliminating credit card and medical debt via bankruptcy is often so beneficial for families. First, alleviating the pressure of paying these accounts every month can dramatically impact the stress level within a household for the better. Second, freeing up the funds that would ordinarily be used to pay these accounts means that they can be directed elsewhere.

The Benefits of Having More Liquid Income

According to a recent Bankrate survey, more than one out of every three Americans has more credit card debt than savings to be utilized only in the event of an emergency. What is particularly striking about that statistic is that it reflects more than an 11% increase from the number of Americans who were struggling with these circumstances only one year ago.

Per the requirements of Executive Order 12968, an applicant for security clearance must consent to the review of their financial records and consumer reports. As a result, when an applicant submits a security clearance application, those who are investigating their fitness for this access will see if the applicant has recently filed for bankruptcy. This can be a tough reality to swallow for someone who is eager to leave the consequences of their debt relief needs behind them.

There are so many benefits that bankruptcy filers experience when they take advantage of this personal debt relief opportunity. Yet, it is undeniable that filing for bankruptcy can lead to some challenges under certain circumstances too. For instance, while filing for bankruptcy is not likely to impact the outcome of an applicant’s security clearance investigation, it could if aggravating circumstances apply to an individual’s situation.

The Subjectivity of the Security Clearance Application Process

When individuals apply for employment within a federal government agency, they are generally subjected to a suitability determination in order to better ensure that they meet the criteria set forth in Executive Order 10450. This EO explicitly insists that those who are employed by the federal government must not only be loyal to the U.S., but they must also be trustworthy, of solid conduct and character, and they must be reliable.

Homeownership can be very rewarding, and a home is often one of the best financial investments an individual or married couple can make. Unfortunately, a family can encounter financial setbacks that may affect their ability to make ongoing mortgage payments. Defaulting on a mortgage may put a homeowner at risk of foreclosure, and in addition to potential financial losses, they may be concerned about their family's ability to continue living in their home. However, there are options available for homeowners who are facing these difficult situations. Filing for bankruptcy is one such option, and it can provide a family with some much-needed protection from creditors while providing them with options that will allow them to maintain ownership of their home.

Understanding Bankruptcy

Bankruptcy is a legal process in which an individual or married couple declares that they are unable to pay back their debts. Depending on the type of bankruptcy filed, a debtor may be able to completely eliminate some or all of their debts, or their debts may be reorganized to ensure that they can make affordable ongoing payments.

If you are considering filing for bankruptcy, you have multiple options. Chapter 13 bankruptcy may be the preferred choice in situations where you want to avoid the loss of your assets or where you wish to avoid foreclosure and maintain ownership of your home. In a Chapter 13 bankruptcy, a repayment plan will be created, and you will make ongoing payments toward this plan for several years. If your income is below the median income in your state, your repayment plan will last for three years. If your income is above the median, you will be required to make payments for five years. The amount you will be required to pay will be based on your disposable income. However, the process of calculating your disposable income can be complicated, and you will need to understand the factors that may affect the amount you will pay and your ongoing financial concerns.

How Disposable Income Is Calculated

Disposable income is the money that you have left over after you pay your essential living expenses. You should be able to make sure you will have sufficient financial resources to support yourself and your dependents during a Chapter 13 bankruptcy. After calculating the amount you earn and setting aside reasonable amounts that are necessary to meet your own needs and those of your family, the remaining amount may be put toward your Chapter 13 repayment plan.

If you are considering bankruptcy, you may have multiple different types of debts, and it is important to know how these debts will be handled during your case. Specifically, if you are planning to file for Chapter 7 bankruptcy, you will want to understand how your unsecured debts will be addressed. This can ensure that you will be able to eliminate your debts successfully and achieve a fresh financial start. 

What Are Unsecured Debts? 

A debt is considered to be unsecured if it is not backed by collateral. That is, rather than having the assurance that they can take possession of property such as a car or home, a creditor will rely on the promise that the amount owed will be repaid. The most common types of unsecured debts include medical bills, credit cards, payday loans, utility bills, and personal loans. These debts do not have an asset attached to them that can be repossessed and sold off if the debt goes unpaid; instead, creditors may take legal action against you if you fail to make payments on your unsecured debt, and they may attempt to recover the amount owed through a judgment in court. 

New laws are passed regularly, and in many cases, they go into effect on the first day of the following year. However, keeping up with changes to the law can be difficult, especially for members of the general public who are not well-versed in legal issues. It can be important to be aware of these changes, because they can affect people's lives in many ways. One Texas law that took effect on January 1, 2023 may play a role in cases involving bankruptcy or other debt-related issues. This law gives debtors more options for preventing creditors from seizing their assets following a legal judgment.

New Procedures for Claiming Exemptions to the Seizure of Personal Property by Creditors

HB 3774 made a number of changes to the justice system in Texas, but one of the most important changes involved the rules that will be followed when debtors assert exemptions to asset seizure. This may be an issue in cases where creditors pursue lawsuits against debtors in an attempt to recover unpaid debts. After a creditor obtains a judgment against a debtor, they may then take action to seize the debtor's assets, including funds in bank accounts, vehicles, or other personal property. However, certain assets are exempt from seizure under the law, and HB 3774 required the Texas Supreme Court to implement new rules that will allow debtors to claim these exemptions and prevent the loss of their property.

Until November of 2022, student loans were nearly impossible to discharge in bankruptcy. The previous standard to discharge student loans required a total inability to repay student loan debt. In practice, this meant a debtor needed to be unable to ever work or earn a living.

Now, the Department of Justice, in close coordination with the Department of Education, is implementing a new process at the outset of adversary proceedings in which debtors seek to discharge federal student loans in bankruptcy. While the bankruptcy judge makes the final decision on whether to grant a discharge, the Justice Department can play an important role in that decision by supporting discharge in appropriate cases. The new process will help ensure transparent and consistent expectations for the discharge of student loan debt in bankruptcy; reduce the burden on debtors of pursuing such proceedings; and make it easier for Justice Department attorneys to identify cases where discharge is appropriate.

Under the Justice Department’s new process, debtors will complete an attestation form to assist the government in assessing the discharge request. The Justice Department, in consultation with the Department of Education, will review the information provided, apply the factors that courts consider relevant to the undue-hardship inquiry, and determine whether to recommend discharge. Even where the applicable factors may not support a complete discharge, where appropriate, the Justice Department will consider supporting a partial discharge. Justice Department attorneys will assess the undue-hardship factors in the following manner:

Being in debt can be a difficult experience, and debtors may not only face financial difficulties, but they may need to deal with harassment by creditors or concerns about foreclosure, repossession, or legal judgments. Filing for bankruptcy is often the best way to rectify these concerns, and the completion of the bankruptcy process will allow certain debts to be eliminated. However, debtors will need to be aware of the possibility that their bankruptcy case could be dismissed. By understanding why this might happen, debtors can take the proper steps to avoid any issues that could affect their ability to receive relief from their debts.

When Can a Chapter 7 Bankruptcy Be Dismissed?

Chapter 7 involves selling some of the debtor’s assets in order to pay off creditors, and it allows debts to be discharged relatively quickly. A Chapter 7 case can be dismissed if the debtor fails to complete the required credit counseling, does not provide full and accurate financial information, or fails to appear at any court hearings or meetings with creditors. In addition, a case can also be dismissed if the debtor intentionally tries to hide assets or commits any type of fraud during the bankruptcy process. 

When Can a Chapter 13 Bankruptcy Be Dismissed?

Chapter 13 is known as “reorganization bankruptcy” because it allows debtors to keep their property while reorganizing their debts into an affordable payment plan that will last for several years. A petition for this type of bankruptcy must include proof that the debtor has enough disposable income to make payments toward their debts over time. Therefore, if a debtor fails to comply with this requirement or fails to make payments on time under their repayment plan, then their case may be dismissed. In addition, the circumstances described above that may affect a Chapter 7 case may also lead to dismissal in a Chapter 13 filing.