How To Decide If Bankruptcy Is Right For You

Is Filing for Bankruptcy Right For Me?

Making the decision to file bankruptcy can seem daunting, but remember that you don’t have to go this alone. In addition to reading about this procedure online, you should get candid and clear recommendations from experts in the field, and know that you don’t have to spend a lot of money to make this decision. Remember to take the time you need to decide whether this is something that will relieve you of financial pressure. Here are a few recommendations:

Calculate your household income and compare it to your monthly expenses. Take time to write this down. Calculate what realistic options you have to cutting back on expenses. Is it realistic to count on overtime at work to make your budget feasible? If you believe you could test your resolve for a month, then make a plan and begin. It may take a few months to remove things like extra cable channels, subscriptions, and reduce your discretionary spending.

If you are no longer able to make minimum payments on your bills, Bankruptcy is something worth examining. If the question has escalated from, “will I be able to pay all this back”, to, “how do I best go about not paying all this back” then you should consider a bankruptcy as a serious option. If you are falling behind on your car or house payments, which are necessary for work, and basic needs, then you should look at a bankruptcy possibility.

If you are considering filing for bankruptcy, give us a call at 210-340-8877 today for a free consultation to find out if it is right for you.

Can I Keep My Property?

Remember: There are powerful laws in effect that protect your homestead and your vehicle, along with other important assets. Even if you are purchasing your car or home, and you’re behind on your payments, the law has been designed to enable folks who can afford to pay in the future an opportunity to not forfeit their equity.

If the big issue you are facing is credit card debt or signature loan debt, a Chapter 7 offers immediate and permanent relief to many people. Although called “liquidation,” a Chapter 7 bankruptcy rarely results in the loss of your assets here in San Antonio, because the exemptions here in Texas are exceedingly broad, and they cover most things that folks own. What’s more is that you will be able to know in advance whether anything you own is at risk, because you will visit with experienced legal counsel and you will have an accurate picture of whether you will be able to keep your real estate and personal property. This means that there’s nothing that the trustee will take and sell to pay your creditors.

Individuals and couples considering a Chapter 7 will use the “means test” to determine whether their income is at a level to qualify. This means test will help you know whether, after your monthly living expenses, there would be enough disposable income to pay their creditors back in any meaningful way. David Packard’s team at the Packard Law Firm can let you know if a Chapter 7 is right for you during your free consultation.

On the other hand, Chapter 13 bankruptcies are plans that “reorganize” your debts into consolidated monthly payments. This gives you a chance to catch up on missed mortgage payments, car payments, or any collateralized item while protecting them from immediate threats like foreclosure or repossession. It protects from lawsuits for credit card balances or possible judgements or liens. If your bankruptcy is successfully completed, the remaining balance of your unsecured debt is wiped out.

The Means Test

The means test has two main parts: First it compares your income over the past 6 months to the median income in Texas. If you’re below that amount, then you already pass! If your household makes more than the median level income in Texas, then the “means test” is used to see what percentage of your debt you can reasonably afford to pay back to your creditors. Your bankruptcy monthly payment is calculated based (in part) on the amount of debt you are paying back, both secured and unsecured.

Applicable Median Household Income in Texas on or after 4/1/2017

Understanding the Means Test for Ch 7 Bankruptcies

Household Size Gross Monthly Income 6 Month Total Annual Income
1 $3,892 $23,252 $46,704
2 $5,142 $30,852 $61,704
3 $5,476 $32,852 $65,704
4 $6,403 $38,418 $76,836
5 $7,103 $42,618 $85,236
6 $7,803 $46,818 $93,636
7 $8,503 $51,018 $102,036


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