Smith County Bankruptcy Blog

Having financial difficulties is often emotionally draining. When you have more debt than you think you can reasonably handle, you should look into the possibility of filing for bankruptcy. This enables you to take legal action that will help you to get your money situation back on track.

You must consider the different types of bankruptcies that are possible for consumers. There are two primary chapters that individuals use – 7 and 13. These are two distinctly different options, so you have to find out which one meets your needs.

When Texans are facing overwhelming debt, they are frequently unaware of what to do next. Many might be reluctant to consider personal bankruptcy. There are common misconceptions about the process. It is imperative to know that it can be a useful strategy to clear debt and start over.

Chapter 7 bankruptcy is a liquidation bankruptcy. There are key points to understand before deciding to file for Chapter 7. The assets and income are foundational parts of the process. If a person owes around $25,000 with an income leaving them in the middle class, it can be difficult to catch up and pay that debt. Bankruptcy could be beneficial for individuals who face these circumstances.

Cannabis has been a difficult topic for companies seeking protection in Texas and across the country. As cannabis is legalized for recreational or medical use in a growing number of states and decriminalized in many more, the number of businesses associated with cannabis has grown. At the same time, some of these companies have failed and sought protection in bankruptcy courts. Overall, these companies have had a difficult time with many courts holding that the continuing federal criminalization of marijuana means that these companies can find no relief in the bankruptcy laws.

One Chapter 13 bankruptcy case involves the issue of medical marijuana but in a personal bankruptcy rather than in a corporate filing. Chapter 13 bankruptcy is an option that can help people to keep their assets while they pay off their debts in a court-approved payment plan. For people who make too much money to be eligible for Chapter 7 bankruptcy but still face crushing debt, Chapter 13 can be an important step toward debt relief. In order to construct the plan, the court will deduct monthly expenses to determine how much disposable income the debtor has.

A research study from the American Bankruptcy Institute indicates that people in Texas and across the country have double the likelihood of filing for bankruptcy if they have had a gap in health insurance coverage of at least two years. The study included information from the Bureau of Labor Statistics for more than 12,000 people and found a strong link between consumer bankruptcy filings and health insurance coverage interruptions.

The statistical link was present even when researchers controlled for things like debt-to-income ratio and earnings overall. Health insurance coverage interruptions were often related to other factors that can cause bankruptcy, like divorce, health issues and lower annual incomes. It is common for people who have health insurance to get coverage via their jobs, so an interruption of employment might interrupt both income and health insurance coverage. Moreover, health problems can sometimes lead to instability in employment. Prior studies have shown that more than 66% of bankruptcy filings are linked to medical problems.