Smith County Bankruptcy Blog

Bankruptcy is a powerful financial tool for people in Texas who have burdensome debt, but they aren't a magic shield that protects from future financial woes. Many individuals find themselves in a situation where they may want to file for bankruptcy a second time. While getting a second bankruptcy has certain limitations and waiting periods, it is possible for some. For many, however, there may be other ways to relieve debt.

For a previous Chapter 7 filer, there is a waiting period of at least eight years before another Chapter 7 petition can be filed. To file Chapter 13 bankruptcy, which restructures rather than discharges debt, a person must wait four years after having filed for Chapter 7. People who previously filed for Chapter 13 only need to wait two years before filing for Chapter 13 again. These bankruptcy wait times were introduced in 2015.

Student loans enable Texas residents to attain their educational goals. However, students often struggle to pay these loans back. Nationwide, borrowers owe $1.5 trillion in student loan debts, and bankruptcy law specifically prohibits the discharge of student loans unless a borrower can show undue hardship.

The federal court system has not established a standard way to assess undue hardship, but courts typically apply the Brunner test when considering factors. Essentially, this test looks at extenuating circumstances and a person's good faith attempts to resolve the debt. If payments make the maintenance of a minimum standard of living impossible and the person has tried to make payments, then a court might view the situation as an undue hardship. Age, income and health could influence this decision.

Credit card debt can be a source of difficulty and anxiety for people in Texas. Those who are dealing with financial problems might even miss payments. Ideally, for the sake of the person's credit rating, he or she should continue to make at least the minimum payments on the cards. Sometimes that isn't possible though, and so payments are missed. Failure to make credit card payments has different, increasing consequences depending on how long the payment is behind.

A payment on a credit card is considered late once it is more than 30 days past due. Credit bureaus typically categorize late payments as between 30 and 59 days, 60 and 89 days, 90 and 119 days, 120 and 149 days, 150 and 179 days or 180 days or more. When a payment is 30 days late, the credit card company will typically charge a late fee. Sometimes, these late fees can be waived if the person calls the company and explains the situation. The late payment will likely be reported to the credit bureaus though.