Dallas Bankruptcy Blog

When it comes to bankruptcy, the number 13 is definitely luckier than number 7, since filing for bankruptcy under chapter 13 ensures that you can hold onto assets such as your home and car.

You will still have to pay part of your future income to your creditors to clear off your outstanding debts, depending on the value of your property, your income and your expenses.

Depending on your particular circumstances, your repayment period could stretch from anywhere between 3 to 5 years. An experienced bankruptcy attorney can advise you on your particular case.

Chapter 13 vs. Chapter 7

Using chapter 13, your bankruptcy attorney will submit a plan to repay your creditors within the specified period, and the court will supervise this plan. Secured creditors have a much better chance of recovering their money than non-secured creditors.

Once the court approves the plan, it will then prevent your creditors from harassing you in any way regarding overdue payments. The difference between filing Chapter 7 and Chapter 13 is that with chapter 7, your assets are taken by the court and disposed of to make payments to your creditors; but with chapter 13, you will have to reorganize your payments to your creditors over a longer period of time.

So while Chapter 7 will your debts in one stroke by selling your assets, Chapter 13 will safeguard your assets, but take away a part of your income slowly but surely for the next 3 to 5 years.

In a nutshell, when your bankruptcy attorney files Chapter 13, you get to keep your assets and have some control over your financial life as you pay off your debts in installments.

Income and Property Matters

If you are an individual with regular income that is more than your expenses, and you have secured debts not more than $1,010,650 or unsecured, liquidated debts of not more than $336,900 dollars, then you are eligible to file for chapter 13.

The advantage you have after filing Chapter 13 is that even though the sword of debt hangs over your head, you now have a viable, concrete plan to slowly pay it off - without worrying about creditors harassing you.

In most bankruptcy cases, consumers have been unable to meet their mortgage payments and the lender has initiated foreclosure proceedings against them. Having a bankruptcy attorney file Chapter 13 will ensure that the proceedings against you are stopped and that you stay in the home that you’ve worked so hard for. However, you will have to make future payments on time.

With Chapter 13, your future payments might also be restructured into smaller ones so that you are able to pay them off easily. You will also have to attend credit counseling classes before filing for bankruptcy.

By consulting a knowledgeable bankruptcy attorney who is familiar with bankruptcy laws, you can decide whether Chapter 13 is best for your situation. If you are earning a regular income, but have just spent too much money at one time, then filing under chapter 13 can solve your repayment problems in the long run.

Being affected by bankruptcy is certainly not easy or comfortable to handle. The thought of it and the distress that it may cause can be shattering both financially and psychologically.

The biggest drawback is that it immediately affects your credit, although it will get significantly better over time. And unless you have all the facts about bankruptcy and how it will affect your financial life, you could also be ashamed and embarrassed.

What Does Bankruptcy Mean?

The record of a bankruptcy can remain on your record for as long as ten years – this length of time will vary according to the law of the state that you live in. The effects, however, generally start to decline after the end of the proceedings.

Many consumers find that after they file for bankruptcy, they have a weight lifted off their shoulders. Months down the line, their financial situation is usually much better than it was before the bankruptcy. If you have any questions about how bankruptcy will affect your particular situation, you could probably benefit by consulting a competent bankruptcy attorney.

How to Deal With Bankruptcy

Money management is the answer to this. You will need to figure out and plan on a course of action, to reduce the effects of the bankruptcy and improve your credit. A bankruptcy attorney can probably help you with this. You’ll need to strictly follow your plan to be able to see your credit scores increase once again.

Another way of tackling this situation is to use your available credit judiciously and make regular and timely payments. When you’re in the process of building up your credit record, you need to make sure that all entries are being correctly reported to the credit bureaus – they are notorious for having erroneous and inaccurate information, often to the detriment of the consumer.

Once your bankruptcy is discharged, you should see to it that it has been reported.  If not you will be faced with problems and difficulties when trying to obtain new credit.

There are two ways to reestablish credit. One is to apply for an installment loan, such as an auto loan or mortgage. The other is to apply for a credit card which may not necessarily be a secured card.

Manage Your Credit Wisely

One of the best ways of reestablishing your finances after bankruptcy is to keep a close eye on any credit you are able to obtain. If you are able to get yourself a new credit card, make sure you do not use it to its limit. The best practice is to use less than 30% of the available limit and make payments regularly on a monthly basis.

If you manage to get a mortgage, which may actually be easier to get than a credit card, then make sure you take on a house that you can afford.

Everyone goes through rough financial patches in their lifetime. If you’ve filed for bankruptcy, you’ve given yourself a fresh start and the best chance at financial success. Just make sure that you make the right decisions from here on out and avoid landing yourself into another tight spot in the future.

Filing for bankruptcy is not an admission to financial failure. Rather, you should view it as the first step in redeeming yourself and getting ready for a fresh start. However, filing for bankruptcy could mean that your creditors could try to seize your assets to try to recoup their losses.

In order to declare bankruptcy, you will have to file for chapter 7 according to United States Laws. You will need the assistance of a good bankruptcy attorney, who can guide you and help you to protect your assets (legally).

Different states have different laws on protecting your assets such as your home or car. If you choose to file bankruptcy on your own, you will have to study the laws pertaining to your case. However, by engaging the services of a competent bankruptcy attorney, protecting your assets will become much easier, at least on your part.

Protecting Your Assets

One of the most basic ways to protect your belongings is to transfer your property or other assets to your spouse’s name. This is perfectly legal, depending on the situation. Taking this step on your own can get pretty sticky, so it pays to consult a bankruptcy attorney before doing so.

If you have a proprietary firm or are a partner in a firm, then you could convert it into an S-Corporation or a Limited Liability Company (LLC), which are impervious to lawsuits that would attach your personal possessions. You could also inject more money into an employee-sponsored retirement plan, since these have unlimited protection. Check the level of protection in your state on homesteads, annuities and life insurance policies, and adjust them accordingly.

You could also form a trust to protect your assets. States such as Nevada and Rhode Island now allow the setting up of asset protection trusts. You do not need to be a resident of these states to form an asset protection trust. Independent trustees manage the trusts, and you will need to study the state laws carefully before forming one, since this move is normally irrevocable.

You should employ the services of an efficient attorney with enough experience in asset protection laws, so that you do not end up with a legal problem in that state.

Consult a Bankruptcy Attorney

There are many firms on the Internet that claim to be able to solve all bankruptcy problems, but you should cross-check those companies with the Better Business Bureau and with anyone who has dealt with them before employing their services.

Also, since prevention is always better than cure, take firm and positive steps before your bankruptcy problem snowballs into an asset-snatching one.

If you have filed for bankruptcy, be sure to give all the details of your property, cars, mortgage loans and bank accounts to your bankruptcy attorney, so that these can be sorted out first and proper legal protection methods can be applied to save them.

Depending on the laws in your state and your bankruptcy attorney’s skills, your assets have a greater chance of remaining in your hands while your financial situation gets sorted out to your satisfaction.

One question that haunts most people who file for bankruptcy is whether they will be able to keep their homes or lose them in the bankruptcy process. There is no clear answer to this question, but people living Dallas, Texas should know that the state’s bankruptcy laws exempt any equity a bankruptcy petitioner may have in their home.

This means that if you are able to continue making payments on your mortgage, you are allowed to keep your home.

Also, by filing a Chapter 13 Bankruptcy, you are eligible to make a repayment plan over a period of 3 to 5 years. If you hire Dallas bankruptcy attorneys Allmand and Lee to file Chapter 13 on your behalf, you will be able to keep your home.

Unfortunately, many people wait until it is too late to file Chapter 13. If you are already several months behind in making your mortgage payments and have no reason to believe that your situation will change, contact usimmediately.

Effect of a Discharged Bankruptcy on Your Mortgage

Although a bankruptcy discharge does absolve you of your personal liabilities with respect to the mortgage on your home, it does nothing to the lien itself. Effectively, this translates to the lender’s rights in the mortgage being protected, which includes the right to foreclose on the property if the terms of the mortgage agreement are breached.

You should understand that although filing for bankruptcy or getting a discharge is not a breach of the mortgage agreement, non-payment of the loan certainly is.

Should You Keep Your House?

Although filing for Chapter 13 does allow you to keep your home, in every case it may not be a wise decision. Like many other consumers, you may have also taken out home equity loans, making the amount due on your mortgage equal to or greater than the value of your home, such that the entire value of the property is pledged to the lender.

If this is the case, depending on your particular financial situation, it may not be such a good idea to retain your house; it may be best to make a fresh start by walking away from a property that may be more of a burden than an asset.

Negotiating With Your Lender May Be the Right Step

When you file a Chapter 7 bankruptcy, are late with payments and liable for foreclosure, the filing just delays the foreclosure, but does not kill the rights of the lender in the property and they can foreclose if payment is not made.

To keep your home, you will need to make arrangements with your lender.

When you put up your home as collateral against loans other than your mortgage, the other creditors also have surviving liens (claims) on the property with the right to foreclose if payment is not made.

Sometimes, it is best to negotiate with your lender. Most lenders are open to negotiations - subject to the state of your credit history, your future financial prospects and the reasons why you missed on your payments.

However, if you are not able to negotiate successfully with your lender, bankruptcy may be your only option. Again, if you are in this situation, then time is of the essence – you should not wait until foreclosure is imminent.

Dallas bankruptcy attorneys Allmand and Lee have helped hundreds of clients keep their homes through foreclosure. We have amassed 20 years of combined experience and pride ourselves on helping our clients on the road back to financial solvency.

If you are behind in your mortgage payments, or even if foreclosure proceedings have started against you, there is still hope.

Bankruptcy is not as grim or as glum a situation as it is often made out to be. If you are in serious financial trouble, sometimes it is to your advantage to start over with a clean slate.

For many people, filing for bankruptcy can be embarrassing – that is, until they consult a qualified bankruptcy attorney and learn that they can actually keep their car, home and other possessions and drastically improve their financial lives.

If you’ve decided to file for bankruptcy, here’s how to get back on track financially, emotionally and mentally.

Seek Help

First and foremost, you’ll want to seek advice from a bankruptcy attorney. You don’t want to navigate this legal avenue on your own. This is your financial future we’re talking about.

On the home front, let your close family know what you’re planning to do. Chances are they’ll be much more supportive if they know what’s going on. Leaving them in the dark not only decreases your chances of getting help and support, but also increases your already-high stress levels.

Usually, close relatives and friends will gladly help you work out your problems with whatever big or small contributions they can make.

Be Wise

Many people are forced to file bankruptcy due to circumstances beyond their control - job loss, unexpected illness or divorce. However, there are a small minority of people that just took on more debt than they could reasonably handle, due to misinformation or simply being uninformed about the dangers of having too much credit.

Take a long, hard look at your lifestyle, wasteful spending habits or misguided investment projects. Learn to seek advice on how to manage money matters, before they get out of control the second time around.

Get a Reliable Job

Get yourself a salaried job. Having your own business is admirable, but sometimes it just doesn’t pay the bills. Make sure you update your skills, and return to school if you have to.

When you are back on your feet, then you can consider starting your own business again, if that is what you were doing originally.

Join a Credit Union

Joining a credit union organization is helpful. They normally offer the kinds of loans that a bank will not, and often with more favorable terms.

However, they will still be interested in your ability to repay; so make sure that you don’t borrow more than you can afford to.

Invest in a Retirement Plan

Many people have never created a concrete or disciplined retirement plan for themselves. Hire a financial advisor to help you with making a proper plan for your future.

Make regular contributions to help your savings grow - and resist high-risk investment vehicles.

Be Systematic

You’ll find that it is often easier to obtain new credit after the bankruptcy than before. This is when it is even more critical to make regular, monthly payments.

If you are able to obtain a mortgage, have the payments taken out of your bank account. When you get a credit card, pay more than the minimum payment to avoid getting in over your head.

Educate Yourself

Learn to look at wealth from a different perspective. Pick up relevant literature and see how you could apply it to your financial situation. Getting back on track after bankruptcy can be achieved by having discipline when it comes to your lifestyle and money matters.

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.

The financial industry in the U.S. has been battered by the sub prime mortgage crisis. It has affected everything; the stock market, home prices and people’s ability to procure mortgages. According to the Wall Street Journal, the property value of homes in the U.S. will fall by about $1.2 trillion in 2008. An estimated 1.4 million homeowners are expected to lose their properties in foreclosure proceedings this year. These are findings of a study conducted by the forecasting firm Global Insight Inc. It is being predicted that the ongoing housing market problems are going to have a deep and widespread economic impact that may stretch through 2008. Many homeowners face a choice – be ruined financially, or seek financial relief through bankruptcy.

Just the Facts, Ma’am

Although the near future seems bleak, experts feel that there is no reason to panic, although the threat to the battered housing market and a weakening economy is a reality with wide ramifications. The fact is that this situation has not happened overnight, but has been building for quite some time. In 2006, foreclosures numbered 1.2 million. Despite such a large number, the economy survived. This year it is predicted to go up to 1.4 million - which is not much more, compared to earlier figures.

Prime Borrowers also Feeling the Crunch

However, banks’ tightening their lending standards coupled with falling home prices have impacted nearly everyone. Contrary to popular belief, it isn’t only subprime borrowers that are affected - consumers having sound credit histories and good incomes are also defaulting on mortgage payments and other financial obligations in record numbers. Many prime borrowers have been forced to file for bankruptcy, as they are unable to make payments on their mortgages. These consumers are unable to afford the high payments on their variable-rate mortgages; on the other hand, they cannot sell their homes for more than the value of the mortgage debt. Refinancing has become very difficult, leaving them with no option but to file bankruptcy.

Bankruptcy and the Mortgage Industry

With proposed amendments to the Bankruptcy Code targeted to help homeowners burdened with out of control mortgage debt, it is expected that a large number of new bankruptcies will be filed this year. The proposed amendments to the bankruptcy code are bitterly opposed by the mortgage industry and other creditors. However, if the congress has its way with the proposed Emergency Home Ownership and Mortgage Equity Protection Act of 2007, it will be much easier for bankruptcy judges to restructure home mortgages for consumers that are on the brink of foreclosure. The mortgage crisis and bankruptcy situation as it stands, points to a recession in the economy. The situation remains grim overall, though not of unmanageable proportions. For consumers finding themselves in a financial catch-22, bankruptcy is a viable and realistic option.