Life after bankruptcy can be both exhilarating and terrifying. With the help of your Chapter 7 bankruptcy attorney in San Antonio, you are in the midst of a fresh start in the wake of your debt relief. Even if you filed for Chapter 13 bankruptcy with an attorney in San Antonio, you can see light at the end of the tunnel when you complete your payment plan for lower monthly payments at the end of 3 to 5 years.
You San Antonio bankruptcy attorney will assure you that it is a myth that it will be impossible for you to buy a home or a car as you rebuild your credit. This is true, but as you start your new life, it is crucial to make a plan and change your lifestyle in order to avoid falling into the old routines that brought on bankruptcy.
Chapter 7 or Chapter 13 bankruptcy will remain on your credit report for 10 years. During that time, you must demonstrate that you have learned from your mistakes and are working to rebuild a better lifestyle. Even while your bankruptcy is on your credit report, there are many steps that you can take to reestablish your good credit.
How To Regain Good Credit Scores
The first step that you must take is to develop a reasonable budget and then stick to it. Your bankruptcy lawyer will be able to assist you in finding wise counsel in regards to your budget. Cut out any unnecessary expenses and avoid making large purchases. It is essential to develop a barebones lifestyle for the time being so that your resources can go towards improving your credit. In addition, reducing expenses allows you to build up your savings in order to avoid future catastrophe.
Be smart about opening new credit accounts. You may find the process of obtaining credit cards challenging and expensive in the aftermath of your bankruptcy case. No matter what, make your credit card payments on time. You might find it easier to live on cash in order to more closely monitor your budget.
Most importantly, make all payments on time, whether they are for your credit card, your mortgage, or your electrical expenses. Focus on diverting money towards savings and consider utilizing a secured credit card. Finally, maintain a positive attitude – however challenging the current circumstances may seem, they are massively improved from where you were before you filed for bankruptcy.
The choice to file with a Chapter 13 bankruptcy attorney in San Antonio allows you to begin a journey towards debt relief. Chapter 7 bankruptcy attorneys in San Antonio are able to help you get a completely fresh start, but deciding to go with Chapter 13 lets you continue to repay your debts with lower monthly payments. Although a Chapter 13 bankruptcy remains on your credit report for 10 years, it still demonstrates that you were committed to repaying your debt as opposed to simply erasing it.
How The Payment Plan Works
When you file for Chapter 13 bankruptcy, your San Antonio bankruptcy attorney will assist you in developing a repayment plan. The resulting plan will detail a certain amount that you must pay monthly to a bankruptcy trustee, who will in turn begin to repay your debts. Certain debts must continue to be paid in full, which will affect the amount of your monthly payments. The debts that must be paid at a rate of 100% include:
- Administrative costs: the fees that pay your bankruptcy trustee and lawyer
- Priority debts: obligations that cannot be dismissed, such as taxes, alimony, and child support
- Mortgage expenses: the default on your mortgage that must be paid in order to keep your house
Unsecured debts may be adjusted to ensure that you owe lower monthly payments going forward. Expect to negotiate with your lawyer and the court to determine the amount of your disposable income that must be directed towards your debts. The point of a Chapter 13 payment plan is to institute monthly fees that are manageable, so that when you complete the plan you are ready for the fresh start offered by Chapter 7 bankruptcy.
The Chapter 13 Plan Timeline
In order to allow you a clean slate at some point, there is a cutoff time for Chapter 13 payment plans. At that point, all remaining debts are forgiven and you are free from all monthly payments. The length of your plan is determined by the size of your income. Debtors with income that exceed the median income for households of a similar size are required to continue payments for a period of 5 years in order to more fully repay their debts. However, individuals with an income that is less than the median income must only persist with their monthly payments for 3 years.
Ask your Chapter 13 bankruptcy attorney in San Antonio for assistance in developing a payment plan that will help you erase your debts.
In considering a Chapter 7 or Chapter 13 bankruptcy attorney in San Antonio, it is important to understand the differences between the two cases. Either option will give you immediate debt relief, as a court order bans all creditor harassment once you file. A San Antonio bankruptcy attorney can clarify for you the expectations and results of a bankruptcy case, whether is it Chapter 7 or Chapter 13.
Chapter 7 considerations
If you file for Chapter 7 bankruptcy with an attorney in San Antonio, your debts will be discharged and assets that are not exempt will be liquidated to repay those debts. Eligibility for Chapter 7 is determined through a “means test.” Debtors with an income higher than the state median income are generally disqualified.
What are the advantages of filing for Chapter 7 bankruptcy? Most importantly, the majority of debts are completely forgiven. Debt collectors must stop harassing you and your family. In Texas, further advantages come from the state’s liberal exemption laws.
However, there are many negative repercussions to be considered as well. Although most debts are forgiven, certain financial obligations cannot be discharged, such as student loans, taxes, and child support. Bankruptcy remains on your credit score for ten years. A Chapter 7 San Antonio bankruptcy attorney can help you decide if a Chapter 7 case is appropriate for you.
Chapter 13 issues
A Chapter 13 bankruptcy attorney in San Antonio will explain to you the benefits of choosing debt consolidation as opposed to a discharge with Chapter 7. When you file Chapter 13 bankruptcy, you are granted lower monthly payments in order to achieve your debt relief. A repayment proposal must be submitted to the court that suggests a reasonable plan for repayment of your debts based on your income.
The pros of a Chapter 13 bankruptcy case include the protection of your assets under the Texas exemption laws. These exemptions will reduce the amount of money that the court deems you must repay. Choosing Chapter 13 allows you to continue with lower monthly payments in your plan. A lawyer can assist you in understanding how the Chapter 13 laws apply to you.
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If you are facing bankruptcy, a San Antonio bankruptcy attorney can help you to understand your rights. A Chapter 7 bankruptcy attorney in San Antonio can help get you debt relief and lower monthly payments. These lawyers will explain Texas exemption laws, which are generous. With a Chapter 7 or a Chapter 13 bankruptcy attorney in San Antonio, you can claim a fresh start.
Texas Exemption Advantages
A San Antonio bankruptcy attorney will explain that you can choose between claiming federal exemptions or state exemptions. Texas exemptions are some of the most liberal in the nation, so Texans filing bankruptcy rarely choose federal exemptions. Generous exemptions allow you to reduce the figures that must be repaid in a Chapter 13 bankruptcy, meaning lower monthly payments.
Texas laws offer debt relief through a generous Homestead Exemption. If you own no more than 10 acres in a town or city, or no more than 100 acres in the country, Texas exemptions entitle you to keep your home, no matter the value. However, if your homestead is worth more than $146,450, you must be able to prove at least 40 months of residence. One caveat could be that if you have recently moved to Texas, you are likely beholden to the exemption laws of your former state of residence. A San Antonio bankruptcy attorney can be of assistance in determining how the Texas property exemption laws apply to you.
When filing for bankruptcy, an individual with a driver’s license can claim an exemption for one car. If you have a family, each member with a valid license is entitled to protect the worth of one car. A lawyer can help you to claim this form of debt relief.
Personal property exemptions
Again, a Chapter 7 bankruptcy attorney in San Antonio will assure you that the Texas personal property exemption laws are extremely generous. An individual can protect up to $30,000 worth of personal property, while a family is entitled to protect as much as $60,000. These exemptions are often enough to allow total asset protection.
Contact us for expert advice from a San Antonio Bankruptcy Attorney.
There are certain types of debts including credit card debt listed in your bankruptcy that may be discharged whenever you file for Chapter 7 or 13 bankruptcy. When a debt is discharged in bankruptcy the debt is forgiven. Whenever a particular debt in discharged, you are relieved of legal responsibility for the debtor and can never be forced to pay it back. Your creditors will be prohibited from suing you or taking legal action to enforce the debt. They are also prohibited from calling you, sending your demand letters, or harassing you in any way.
From a legal standpoint, the term "discharge in bankruptcy" refers to a permanent order issued by a federal bankruptcy judge that forbids credit card companies and other nonexempt creditors from collecting on an existing debt that were listing in your bankruptcy. The term "discharge in debt" actually refers to one or all of the debts covered by the order.
The timing of the discharge will depend on the chapter under which a debtor files. With a Chapter 7 Bankruptcy, the court typically grants a discharge relatively fast. Generally around 4 months after the petition is filed. Chapter 13 grants debtors a temporary reprieve from creditor harassment and may also allow them to keep their home or car. Under this chapter, you must pay back credit card debt and other nonexempt debts within a certain period of time than ranges between 3 to 5 years. After this specified time period and repayment schedule, the debt is considered discharges.
Usually the biggest detriment of bankruptcy is its negative impact on your credit score. However, this may not be an issue for many people because they already have bad credit or they soon will because they lack the ability to stay current on their debts. If a person has suffered, or will soon suffer from, a home foreclosure, a vehicle repossession, or extended credit card delinquencies or write-offs, a bankruptcy will probably not make his credit any worse. Additionally, having a poor credit score doesn't mean you can’t get credit. It just means that some loans will be tougher to get and you may have to pay higher interest rates on large purchases like furniture, cars and homes.
There comes a time when bankruptcy is unavoidable. You may need to file to save your home or your bills are consistently higher than your income. Whatever the reason, filing bankruptcy can be a new beginning. You credit score may be hurt for a time, but if you use that time properly, you can start on the road to a new financial future and a better credit score.
To see if filing bankruptcy is for you, call a bankruptcy attorney. Most provide an free initial consultation.