William H. Lively, Jr

Smith County Bankruptcy Blog

What to know about bankruptcy

Individuals in Texas may be able to erase some or all of their debts by filing for bankruptcy. The two most common forms of bankruptcy are Chapter 7 and Chapter 13. A Chapter 7 proceeding is often referred to as a liquidation bankruptcy. To qualify for this type of protection, an individual must pass a means test that seeks to determine if he or she has the ability to repay creditors.

A Chapter 13 case is generally referred to as a wage earner's plan. Debts are repaid over a period of three or five years, and any remaining unpaid balances are discharged at the end of the repayment period. Furthermore, debtors generally get to keep their property during this period. Anyone who files for bankruptcy may experience a variety of negative consequences. In some cases, debtors could see their credit scores fall up to 200 points after filing.

Choosing the right type of personal bankruptcy

Many people in Texas are struggling with insurmountable debt burdens, annoying or harassing collection calls and difficult financial circumstances. They may be looking for an exit to a new financial future that can offer significant debt relief. People who are unable to pay their debts may turn to personal bankruptcy as a solution that helps them move forward with their lives. There are two major types of personal bankruptcy: Chapter 7 and Chapter 13. The right type of bankruptcy for each person may vary depending on financial circumstances, property ownership and other issues.

A Chapter 7 bankruptcy involves liquidating assets and selling them to pay off creditors in part. After the bankruptcy is completed, all eligible debts will be eliminated. Not all debts can be addressed in bankruptcy, including student loans and child support obligations. However, people must generally liquidate their property beyond the exceptions allowed under law. In addition, there is a means test to determine eligibility for Chapter 7 bankruptcy. Only people who make the median income in their state or below are eligible to file for this type of bankruptcy, making it unsuitable for high earners who also have unsustainable debts.

Credit card debt a long-term burden

Many Texas residents struggle to make ends meet, especially if they are drowning in credit card debt. It can be all too easy for credit card obligations to add up, especially as interest rates climb. While many people intend to pay off their balances every month, it can be difficult to do so, especially if people needed to use their cards to pay for a large purchase. In other cases, people lost their jobs or faced other changes to their financial circumstances that made it much more difficult to pay their bills. Still, many financial experts advise avoiding rolling credit card debt as much as possible.

However, according to reports, 82% of all credit card balances are carried past a month and often turn into long-time debt. This is true not only for people struggling with bad credit but also for those with high credit scores. Most of this debt remains for some time; around 70% of these balances revolve for at least a year and 55% of these balances remain for at least two years. Many people are inspired to open a credit card, make a large purchase or transfer a balance by a low introductory interest rate. However, the rate can soon rise to as much as 28%.

How Chapter 13 bankruptcy can help you stay in your house

Far too many people conflate bankruptcy with poverty. It is possible for individuals with successful careers and high income to wind up over their heads and struggling to make ends meet. You can be a homeowner with a stable source of income and still find yourself precariously close to foreclosure because of your debt.

The good news for people struggling to stay afloat financially is that bankruptcy protections can often make all the difference when they fall behind on mortgage payments. Chapter 13 bankruptcy allows you unique opportunities to protect your equity in your home and take control of the debt that is causing your current issues.

Dealing with a debt collection lawsuit

People in Texas may be deeply concerned about what to do if they receive a letter from a debt collector threatening a lawsuit. Their concerns may escalate if they learn that a case has been filed against them. This situation adds stress to the lives of people who are already struggling to pay their bills and facing calls from collection agencies. Over 70 million people across the country have dealt with collectors, and a full one-fourth of those felt threatened during their dealings.

As a result, people may be confused about what they can do to protect themselves and want to avoid the situation altogether. However, being aware of their rights under the law can help people to protect themselves. If people receive a summons and complaint over a debt, they should make sure to respond. Some people may feel like there is nothing they can do, but ignoring it can lead to a default judgment. People who are being sued can file an official answer by the specified deadline with the local court clerk.

Many Americans do not realize they are in debt

In Texas and across the United States, 20% of Americans do not know whether they owe money on their credit cards, and 30% have no knowledge about their credit line interest rates. A current U.S. News & World Report survey also shows that 24% of Americans have debts equaling more than $10,000. Furthermore, 25% of the survey participants indicate they have revolving balances as high as $2,000 on their credit card accounts. In addition, 16% of the participants do not know how much money they owe on their credit cards.

The majority of participants say they confine their credit card debt to one card. On the other hand, 60% of Americans taking the survey say they pay their credit card statements by the due dates and do not have any credit card debt. Yet many Americans struggle with mounting financial problems. Many workers live from paycheck to paycheck and struggle to pay their bills.

Millennials struggle with delinquent credit card payments

In Texas and across the United States, millennials are experiencing difficulties with their credit card debts. Millennials frequently become tempted by credit card perks. Consequently, many millennials are delinquent in the payments on their credit cards. The delinquency ratio was not as severe in previous generations. Many young people formerly viewed stock trading with wary eyes in the past. These individuals were previously known for their frugality. However, current studies conducted by the Federal Reserve Bank of New York shows that many young consumers have lost control over their spending habits.

Signup bonuses appeal to younger generations who seek out the best cash back offers. Others want credit cards with no interest. A typical credit card charges an 18% interest rate for consumers with good credit. However, some credit cards carry higher interest rates. Although millennials might want to save money via bonuses, young people between the ages of 18 and 29 cannot afford to pay the high interest rates.

Medical debts may hurt credit scores

A study conducted by Consumer Reports magazine found that 30 percent of Americans have at least $500 in outstanding medical bills. People in Texas who are struggling to pay medical debts might see their credit scores negatively impacted. Medical debt is handled differently than other outstanding debts when it comes to a person's credit score. It is generally reported to credit agencies later than other debts because the healthcare provider does not do the reporting directly.

If the debt is unpaid long enough, the healthcare provider may send it to a collections agency to get it paid. The collections agency, after some efforts, will report the debt to a credit agency. Additionally, the major reporting agencies will not report medical debt to the credit bureaus until 180 days after it occurred. FICO 8, which is the most commonly used model for credit rating, does not consider medical debt balances of less than $100.

Rule would allow more creditor contact

A rule proposed recently by the Consumer Financial Protection Bureau would allow debt collectors to contact consumers in Texas a lot more frequently. Collectors could make phone calls up to seven times each week and they would be allowed to send unlimited emails and text messages. Once collectors speak to the consumer though, they would not be allowed to call again for one week. This rule change would represent the first major update to the CFPB rules in 40 years.

According to an attorney who works with the National Consumer Law Center, the rule would open the door to contact through existing channels that debt collectors have not utilized. She said people should know they have the right to tell collectors how to contact them and they can revoke their consent to be contacted.

Where can they repossess your car?

You have been missing car payments. Ever since you lost your job, you just cannot find a way to make those payments on time. You have to make paying rent and keeping food on the table a priority; you have kids, after all, and you need to care for them.

However, as much as you know that you're making the right decision, you feel worried that they're going to come and repossess your car. You have been out going to interviews, turning in applications, handing out resumes and trying to get another job in Gregg County. You can't do that without your car. It's a serious worry for you and your family.

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William H. Lively, Jr


William H. Lively, Jr
432 S Bonner
Tyler, TX 75702

Phone: 903-920-0008
Phone: 903-593-3001
Fax: 903-595-3715
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