Dallas Bankruptcy Blog

If you are considering bankruptcy, one of your main concerns may be your car loan, especially if it is worth considerably less than you owe. This is where a concept known as ‘auto lien stripping’ can benefit you.

When you first purchased your car, the entire loan was secured; but, now that you have made a few payments and depreciation has set in, changes can be made to how much you owe on your car during bankruptcy proceedings, provided that you purchased your car more then 910 days prior. For example, let’s say your car was worth $40,000 when you purchased it and that was the value of your car loan. So far, you have been able to pay it down to $35,000, but now the vehicle is only valued at $25,000 — a full $10,000 less than you owe. To remedy this situation, the judge can allow your lender to keep the $25,000 as a secured claim and convert the remaining $10,000 to an unsecured claim.

While the entire secured portion ($25,000) must be paid back, the unsecured portion ($10,000) can be reduced or even completely forgiven depending on the circumstances of your bankruptcy, your other debts, and the discretion of both the judge and your lender. You may even get a break on your current interest rate.

If you are considering bankruptcy, contact the offices of Allmand and Lee at (214) 265-0123 to discuss your options. They have helped other good people through bad times and they can do the same for you, too.

There are many reasons why debtors choose to file bankruptcy, but when it comes to choosing the type of bankruptcy they want to file for, there is usually little leniency involved. Most prefer to file for a Chapter 7 bankruptcy, if possible; but there are certain criteria laid out for both types of bankruptcy that make Chapter 13 bankruptcy a better choice for some. These situations may include:

• When you have assets that you want to keep that are worth more than the exemptions allowed under a Chapter 7 bankruptcy. This may include your home, car, boat, or anything else of substantial value.
• The bulk of your debt includes recent taxes, and child support, which are not dischargeable under Chapter 7. Either way, these debts have to be paid. Also, if you haven’t filed taxes in several years, you will likely have a lot of back-owed taxes that will not be discharged under a Chapter 7.

Even if you are not able to file for Chapter 7 due to these guidelines, Chapter 13 can still help you reorganize your debt, possibly lower some of it, and get on a payment schedule that gets the creditors off your back.

If you are considering bankruptcy, contact the offices of Allmand and Lee at (214) 265-0123 to discuss your options. They have helped other good people through bad times and they can do the same for you, too.

When lenders wanted tougher criteria for those filing Chapter 7 bankruptcy, in an effort to steer people towards Chapter 13 bankruptcy instead, they got their wish. However, that wish may now be helping to fuel the current subprime mortgage foreclosure rates. Since many of these debtors feel that they cannot afford to repay their current debts within 5 years anyway, as they would be required to under Chapter 13, they are instead deciding to stay current on their credit card debts to avoid bankruptcy and allowing their homes to go into foreclosure. This is backed by the fact that, according to Capital One Financial Corp., 70% of consumers who are at least 3 months late on their mortgage repayments are current on their credit card bills.

But losing your home does not have to be your only solution. Sitting down with a good bankruptcy lawyer will help you determine if you can qualify for Chapter 7 bankruptcy and, if not, the best plan to help you complete a Chapter 13 bankruptcy within the 3 to 5 years allowed. Allowing your home, the place where your family sleeps, to be taken away should be your absolute last option, after a bankruptcy lawyer has confirmed that neither a Chapter 7 or a Chapter 13 bankruptcy will work for you.

If you are considering bankruptcy, contact the offices of Allmand and Lee at (214) 265-0123 to discuss your options. They have helped other good people through bad times and they can do the same for you, too.