Declaring Bankruptcy in Texas: The Truth


 

Consumers face many financial challenges in today’s economy.  If you are struggling with high credit card debt, or other unsecured debts, let me tell you something.  You’re not alone.  This may not make you feel any better, but the fact is this.  We are dealing with a perfect storm that has converged on many fronts.  Job losses, denied medical insurance claims, deflated home values, rising food costs, outsourced labor, and general economic instability have resulted in many people turning to credit to bridge the gap.  Many people know this is not the answer, but they were faced with no other choice.  They are good people that are desperately seeking the best way out.

Declaring Bankruptcy in Texas:  Right or Wrong Decision?

After many months of compounding interest you may feel backed into a corner.  If you’re like many, your concerns are more for your family than for your own personal well being.  That’s commendable.  But if you are considering declaring bankruptcy in Texas, you must consider the implied consequences before you pull that trigger.  I’d like to highlight a few truths that you may not be aware of.

Being sued for Credit Card Debt

If you find yourself being sued for credit card debt as a Texas resident, you have options to remedy yourself outside of bankruptcy.  Texas has some very consumer friendly provisions that make it very difficult for creditors to collect any judgments they are awarded. The national Fair Debt Collection Practices Act (FDCPA) offers one layer of protection against aggressive debt collectors.  But we have additional laws here as well.  This makes collection laws in Texas very strict.  Most states afford creditors ample tools to collect their debts, such as wage garnishment.  This pushes most people to declaring bankruptcy in order to protect their wages. But Texas judgment collection is very regulated, and so declaring bankruptcy in Texas is often not necessary.  You have protection from these creditor actions in our state without a Chapter 7 or Chapter 13 bankruptcy being filed.

Judgments in Texas

Even if your creditors obtain a judgment against you, we have broad exemption statutes which make it virtually impossible for a judgment creditor to ever collect anything unless you have non-exempt property such as a stock or bond account or real estate other than your homestead. A judgment stays on your credit report for seven (7) years and exists for ten (10) years, unless renewed, which rarely occurs Now, many Texans may not be aware of some of the rules and loopholes, and so it’s very important that you make sure you proceed carefully. Judgment  creditors are able to garnish a bank account, but I have some tried and true strategies and instruct my clients how to avoid this.  If you have just received a letter informing you of a judgment obtained against you, it’s vital you call me today before your bank account funds are compromised.

Exempt Property in Texas

Another benefit to facing financial challenges as a Texan is additional protection of your property.  Exempt property in Texas extends to your personal homestead, personal property, jewelry, retirement accounts and certain insurance products as well.  These are a very generous provision in our laws, and my clients are often surprised how this affords them a viable alternative to declaring bankruptcy in Texas.  If you are from another state, you may be used to very low and strict limits on exempt property.  Again, this is why most people assume they must run to bankruptcy for refuge when a creditor becomes hostile.  My preference is that people call me first to explore my bankruptcy alternative.  I do recommend chapter 7 or 13, but for about one percent of the people I speak with.  Most Texans are better served by utilizing my advice, and avoiding bankruptcy for consumer, unsecured debts.

Final Thoughts on Declaring Bankruptcy in Texas

As set forth above, filing bankruptcy is often not the best option for consumers in Texas. Bankruptcy is a permanent, public record, lasting a lifetime. Since the 2005 amendments, debtors must receive credit counseling before filing and another round before a discharge. If they make too much money, they will not pass the “means test” and be forced to file a Chapter 13, rather than the preferred Chapter 7. If they file a Chapter 13, it will probably never be completed as less than 2% of all Chapter 13 filings in the United States ever receive a discharge.  Even if you are being sued for credit card debt, Texas garnishment laws are very strict.  I can help you navigate through the collection laws in Texas, and mitigate your debt burdens without turning to a lifeline bankruptcy blemish on your credit report.  People often avoid dealing with their financial burdens, and neglect gathering the correct information about their options.  Then, in a moment of fear they hastily rush to declare bankruptcy assuming it is their only option.  Don’t fall into this trap.  While bankruptcy may be right for you, it usually is not.  Even so, a rushed or botched bankruptcy filing with the wrong attorney can create more problems than you ever imagined.  So what can you instead do?

Get Free Advice

I’ve been a Texas Mayor and Judge, and have practiced law my whole life. I enjoy serving people in Texas by offering them sound advice.  You’ll never feel pressure from me, and I charge nothing when we have our initial phone consultation.  You can tell me what you’re facing, and I’ll explain the laws and tell you the options.  If you choose to work with me, my fees are fair. It’s that simple.  When we’re finished talking, you’ll gain clarity about how to make the best decision possible, and you’ll fully understand the implications of the routes I recommend to you.  You have nothing to lose.

Call Me Today and Sleep Well Tonight

 1-888-982-8609 for your FREE consultation.

 

by Jed Shaw

 

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