Posted on July 22, 2024 in Bankruptcy

Navigating the complex intersection of bankruptcy and student loans can be challenging, especially in Texas. A Texas lawyer can explain how bankruptcy impacts student loans and what options are available when facing financial difficulties.

What to Know About Bankruptcy and Student Loans

The purpose of bankruptcy is to provide individuals and businesses with a legal avenue to eliminate or repay debts, protected by the bankruptcy court. However, the rules regarding student loans differ from those for other types of debt.

Generally, student loans are not dischargeable in bankruptcy unless the borrower can prove "undue hardship." This standard applies nationwide, including in Texas, making discharging student loans through bankruptcy extremely difficult.

The Brunner Test in Texas

Texas falls under the jurisdiction of the Fifth Circuit Court of Appeals, which uses the Brunner test to determine undue hardship. To discharge student loans in bankruptcy, a borrower must prove all three of the following:

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 Posted on July 08, 2024 in Bankruptcy

Are you struggling with payday loan debt in Texas? You are not alone. Many people find themselves trapped in a cycle of borrowing and repaying these high-interest, short-term loans. However, there is hope. Bankruptcy can offer a path to financial relief and a fresh start. A Texas lawyer can help you explore how bankruptcy can help you break free from payday loan debt and regain control of your finances.

Payday Loans are Dischargeable in Bankruptcy

One of the most important things to understand is that payday loans are generally dischargeable in bankruptcy. This means that when you file for bankruptcy, you may be able to eliminate your obligation to repay these loans. Both Chapter 7 and Chapter 13 bankruptcy can offer assistance with payday loan debt.

In a Chapter 7 bankruptcy, also known as "liquidation bankruptcy," your payday loan debt can be completely wiped out along with other unsecured debts. This process typically takes 3-4 months and allows you to start fresh without the burden of these high-interest loans.

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 Posted on June 19, 2024 in Bankruptcy

Filing for bankruptcy can provide much-needed relief for individuals struggling with overwhelming debts, including tax debts. However, it is essential to understand that not all tax debts can be discharged through bankruptcy. A Texas lawyer can help you understand what happens to your tax debt when you file for bankruptcy and the specific requirements that must be met for tax debts to be eligible for discharge.

Types of Bankruptcy and Tax Debt

There are two primary types of bankruptcy that individuals can file in Texas: Chapter 7 and Chapter 13. The treatment of tax debt varies depending on the type of bankruptcy filed.

Chapter 7 Bankruptcy and Tax Debt

In a Chapter 7 bankruptcy, certain types of tax debt may be discharged, provided they meet specific criteria. To be eligible for discharge, the tax debt must be income tax debt, and the following conditions must be satisfied:

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 Posted on June 06, 2024 in Bankruptcy

When it comes to managing your credit report, you must stay vigilant and address any discrepancies that may arise. In Texas, consumers can dispute inaccurate or incomplete information on their credit reports. However, the question remains for many about whether you should always dispute a debt on your credit report. A Texas lawyer can help you determine if you should be disputing a specific debt on your credit report.

Be Sure You Understand the Dispute Process

Under the Fair Credit Reporting Act (FCRA), credit reporting agencies (CRAs) in Texas are required to investigate disputes filed by consumers. When you file a dispute, the CRA must contact the creditor or information provider to verify the accuracy of the reported debt. If the creditor fails to respond or cannot substantiate the debt, the CRA must remove the disputed item from your credit report.

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 Posted on May 28, 2024 in Bankruptcy

When faced with overwhelming debt, many people look into bankruptcy as a means of obtaining a fresh financial start. However, before filing for bankruptcy, ensure that all debts are valid and accurately reported. If a creditor refuses to provide validation of a debt upon request, it can create a complex situation for the debtor. A Texas lawyer can help you explore the legal implications and potential courses of action when a creditor fails to confirm a debt under the law.

What You Should First Know About Debt Validation

Debt validation is when a creditor proves that a debt is legitimate and belongs to the individual being pursued for payment. Under the Fair Debt Collection Practices Act (FDCPA), a federal law in Texas, consumers have the right to request debt validation from creditors or collectors within 30 days of being contacted about a debt. The creditor must then provide written verification of the debt, including the original creditor’s name, the amount owed, and proof that the debt belongs to the consumer.

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 Posted on May 08, 2024 in Bankruptcy

Dealing with debt can be a massive headache. You are probably all too familiar with the relentless calls from debt collectors demanding payment and using aggressive tactics to pressure you into paying up. It is an incredibly stressful situation that leaves many feeling overwhelmed and hopeless. A Texas lawyer can help you figure out what to do if you are in this situation.

Know What You Are Paying

One of the primary reasons for requesting debt validation is to confirm the legitimacy and accuracy of the debt. Debt collectors may provide incomplete or misleading information, making it difficult to determine if the debt is valid. By requesting validation, you can receive documentation that proves the debt’s existence, the amount owed, and the creditor’s right to collect.

Prevent Paying Expired Debts

There is a statute of limitations on debt collection in Texas, which varies depending on the type of debt. For example, the statute of limitations is four years for credit card debt. You can dispute if a debt collector tries to collect on an expired debt. Requesting validation can help identify whether the debt is still legally collectible or the statute of limitations has passed.

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 Posted on April 25, 2024 in Bankruptcy

Filing for bankruptcy can have significant implications on your tax obligations. You must understand how bankruptcy impacts your tax filings to ensure compliance with state and federal tax laws. A Texas lawyer can help you learn how bankruptcy will affect your tax filings for your specific situation.

Income Tax Debt

In Texas, income tax debt may be dischargeable in bankruptcy, depending on specific criteria. Generally, income tax debt that meets the following conditions can be eliminated through bankruptcy:

• The debt relates to a tax return filed at least three years before the bankruptcy filing date
• The tax return was due at least two years before the bankruptcy filing, including extensions
• The tax assessment occurred at least 240 days before the bankruptcy filing

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 Posted on April 08, 2024 in Bankruptcy

Are you considering filing for bankruptcy in Texas? If so, you will need to understand the bankruptcy means test and how it applies to your unique financial situation. The means test is crucial in determining whether you qualify for Chapter 7 bankruptcy or must file for Chapter 13 instead. A Texas lawyer can guide you through the process of the bankruptcy means test.

The Purpose of the Means Test

The bankruptcy means test was introduced as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Its primary purpose is to prevent individuals with higher incomes from filing for Chapter 7 bankruptcy, which allows for the discharge of most unsecured debts. Instead, these individuals may be required to file for Chapter 13 bankruptcy, which involves a repayment plan lasting three to five years.

Step 1: Determine Your Average Monthly Income

To begin the means test, calculate your average monthly income for the six months prior to filing for bankruptcy. Include all sources of income, such as wages, salaries, bonuses, commissions, and any other regular income you receive. If you are married and filing jointly, include your spouse’s income as well.

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 Posted on March 27, 2024 in Bankruptcy

Filing for bankruptcy can be a long, drawn-out process, especially if you are unfamiliar with the ins and outs of Texas law. It is easy to make mistakes that could otherwise be avoided with the right information and guidance. Having a Texas lawyer on your side can make a significant difference. There are too many mistakes that can be made easily.

Mistake #1: Not Understanding the Different Types of Bankruptcy

In Texas, individuals primarily opt for two types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7, also known as “liquidation” bankruptcy, involves selling non-exempt assets to settle debts. Chapter 13 bankruptcy, alternatively, is a type of “reorganization” bankruptcy designed to let you retain your assets while you pay down your debts over a period of three to five years. Understanding the differences between the two types of bankruptcy is crucial to determining which suits your situation.

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 Posted on March 05, 2024 in Bankruptcy

Divorce and bankruptcy are two of life’s most challenging experiences, and they often go hand in hand. If you are considering filing for bankruptcy and are also going through a divorce, it is essential to understand how these two legal processes can impact each other. A Texas lawyer can help you determine how you could be affected in your specific situation.

The Timing of Your Bankruptcy Filing Matters

If you file for bankruptcy before your divorce is finalized, your bankruptcy case will include all of your marital assets and debts. This means that any property you and your spouse own together and any joint debts will be subject to bankruptcy proceedings.

On the other hand, if you wait until after your divorce is finalized to file for bankruptcy, only your assets and debts will be included in the bankruptcy case. This can be advantageous if you want to protect certain assets or have significant individual debt you wish to discharge through bankruptcy.

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