The benefits of using bankruptcy to handle medical debt.
How Chapters 7 and 13 uniquely address medical debt.
How an attentive, caring attorney can be of help while navigating bankruptcy.
How Common Is Medical Debt As A Factor For A Bankruptcy In Texas?
It is a significant cause. I help many clients who have large medical debt and feel overwhelmed. This anxiety ultimately leads them to pursue bankruptcy to get relief from that debt. For the most part, a typical client comes to our office with some amount of medical debt that is creating financial problems for them, and bankruptcy helps mitigate those difficulties.
What Are The Benefits For Filing For Bankruptcy To Address Medical Debt?
The greatest benefit is that you are now discharging that debt, similarly to how you might be discharged from credit card debt. You have no responsibility going forward to pay that medical debt. This relieves you of that former financial burden and allows you to move forward less financially constrained and less worried.
What Are The Negatives For Filing For Bankruptcy To Address Medical Debt?
The only negative that I’ve seen in my nearly 20 years of practice is that filing for bankruptcy can make a future relationship with that medical provider to whom you were in debt rocky especially in a Chapter 7. The medical provider wants to be sure that you will pay them in the future. If you plan to continue to use that doctor or dentist, it would be advantageous to work out a payment plan with them. Whether you are successful or not will totally be dependent on the policies of that office.
Attorney Mike Wallace is a seasoned bankruptcy attorney serving Texas. For nearly 20 years, he’s helped men and women just like you get out of medical debt using Chapter 7 and 13 bankruptcies and served his clients with compassion and diligence.
Have questions about medical debt and getting debt relief? Reach out to Mike Wallace, P.C., at (888) 402-5557 for an initial consultation today!
How Do Chapters 7 and 13 Bankruptcy Differently Address Medical Debt?
In Chapter 7 bankruptcy, the medical provider is not going to receive any additional money from you. In Chapter 13 bankruptcy, if you have disposable income, medical providers will be receiving some money from you based on that disposable income if they file a Proof of Claim.
What Are The Alternatives To Bankruptcy For Managing Large Medical Bills?
You can often negotiate with a provider through their billing department to reduce the bill, and many debtors take that route. Some hospitals will allow you to make payment plans over time or as a lump sum that can be negotiated based on income level.
How Do You Navigate These Cases As An Attorney In A Way That Protects Your Mental Health?
It can be difficult to help clients navigate a very stressful, intense debt situation without causing stress on one’s self. These negative stress levels are often offset by the immensely positive outcomes that I can obtain for my clients.
As a bankruptcy lawyer, I get tremendous satisfaction by helping people navigate the bankruptcy system and get them financial relief. For those who seem to be in a very difficult, stressful situation, I work all the harder to help steer them through that challenge with success.
That effort can be stressful, especially for an attorney. Getting outside, being physically active, and working out are all ways that help me relieve stress, burn off tension, and continue to work at my best.
Why We Approach Client Service The Way We Do
Years ago, I had to seek bankruptcy protection myself – long before I even filed my first bankruptcy case as a lawyer. I can empathize deeply with clients who come into my office for help because I’ve been in their shoes. I understand first-hand the stresses that people in debt are trying to juggle, and my experience as a lawyer allows me to find tailored solutions that best address their problems.
If you’re seeking relief from medical debt through bankruptcy, give my law office a call. My staff and I will listen compassionately to your background, worries, and needs and get you the help you need to put your financial world back together.
Still Have Questions? Ready To Get Started?
For more information on Bankruptcy For Medical Debt, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (888) 402-5557 today.
Whether a plan can be modified if your financial situation changes.
What Is A Chapter 13 Repayment Plan?
When you file Chapter 13, you create a plan to reorganize your debt. What might this look like?
Let’s say you’re $10,000 behind on your mortgage payments. In the Chapter 13 plan of reorganization, we put that $10,000 in your plan to be paid to a Chapter 13 trustee over the course of a commitment period.
A commitment period for Chapter 13 bankruptcy must be at least 36 months but not longer than 60 months. If you are behind on car payments, this plan can incorporate those missed payments into the balance, helping you keep your house and your vehicle.
What Factors Determine The Length Of Your Chapter 13 Repayment Plan?
Income levels are a significant factor. If you go above the median income for your household size in the United States, you are obligated to be in a Chapter 13 plan for 60 months. If you’re below the median income for your household size, you can be in a Chapter 13 plan for as little as 36 months.
In many cases, regardless of your income level, you’ll be put on a 60-month plan. This helps keep your payments more affordable and easier for you and your family to manage in the long run.
How Are Debts Prioritized In A Chapter 13 Repayment Plan?
Secured creditors are typically paid first in a plan, followed by protection payments to a car creditor, attorneys fees, and administrative fees for the trustee every time a payment is made. Finally, general unsecured creditors will be paid.
Attorney Mike Wallace is an insightful attorney serving Texas. For nearly 20 years, he’s helped clients just like you understand their Chapter 13 repayment plans and efficiently get out from under debt.
Have questions about Chapter 13 bankruptcy? Interested in learning more about your options? Reach out to Mike Wallace, P.C., at (888) 402-5557 for an initial consultation today.
Can A Chapter 13 Repayment Plan Be Modified If My Financial Situation Changes?
Most repayment plans can be modified, and there are circumstances where that is appropriate. Reasons for modifying a plan may include a reduction of your income, leaving you with less money to make payments. In cases such as this, your attorney may be able to work out a modification that lowers your monthly payments.
What Are The Common Challenges People Face With Chapter 13 Repayment Plans?
One of the most important things to do is to stay disciplined in making sure that planned payments are made on time and in full. Some clients struggle with this, but part of a successful repayment plan involves being on top of payments and making paying them on time a top priority.
Insights From Years Of Practice
In my nearly 20 years of Chapter 13 bankruptcy work, I’ve learned that there are a myriad of different financial situations where someone can benefit significantly from Chapter 13 bankruptcy.
One very specific thing that I have learned is that there are instances where we can save someone a significant amount of money by using Chapter 13 to pay a car creditor what the vehicle is worth rather than what is owed on the vehicle at the time of filing.
This is known as a “cram down”, and it’s quite useful. I’ve guided many clients through this process. You can cram down vehicles and manufactured homes as long as they are still personal property and have not been made part of the real estate.
Still Have Questions? Ready To Get Started?
For more information on Understanding The Chapter 13 Repayment Plan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (888) 402-5557 today.
Whether a new mortgage can be negotiated through Chapter 13 bankruptcy.
Common pitfalls to avoid when filing for Chapter 13 bankruptcy.
What Is Automatic Stay, And How Does It Prevent Foreclosure?
Immediately upon filing the bankruptcy petition, an automatic stay is put in place, meaning that no creditor can take any action related to you without going through the bankruptcy process. This has an extremely helpful and immediate impact on foreclosure proceedings as well, stopping the process in its tracks.
There are a great many people who need to stop foreclosure immediately, but they can not get current on mortgage payments, and the entire balance may now be due. Filing Chapter 13 bankruptcy puts that automatic stay in place and stops the foreclosure, allowing you to restart mortgage payments at a rate you can manage.
What Is The Process For Including Mortgage Arrears In A Chapter 13 Plan?
If you are $5,000 behind on payments to a mortgage company, that $5,000 is what we refer to as an arrearage. As you make plan payments for that amount to the Chapter 13 trustee, the trustee, in turn, pays the mortgage company.
However, our Chapter 13 trustee is not a pass-through trustee in the Eastern District of Texas. In other words, all payments due after filing the bankruptcy petition are made directly to the mortgage company, not our trustee.
Can You Negotiate New Mortgage Terms Through Chapter 13 Bankruptcy?
Yes, you can. You can still seek a modification of your mortgage while you’re in Chapter 13. While obtaining that modification comes with some challenges, it’s not an uncommon practice, and a seasoned bankruptcy attorney can help you navigate that process and negotiate new terms.
What Are The Potential Pitfalls To Avoid When Using Chapter 13 To Stop Foreclosure?
Chapter 13 bankruptcy is meant to help you get current on payments and keep your home, not delay foreclosure. Using Chapter 13 to delay foreclosure puts the cart before the horse. Ideally, you should be filing for Chapter 13 bankruptcy if you are behind on mortgage payments and are already facing foreclosure. Now, you can put those arrearages in the Chapter 13 plan and repay them over time.
What Are The Long-Term Effects Of A Chapter 13 Bankruptcy On Homeownership?
If you’ve been clear of a bankruptcy discharge for two and a half years and have maintained creditworthiness, you may fully qualify for a federally guaranteed mortgage.
On the other hand, failing to comply with the Chapter 13 repayment plan can cause your case to be dismissed. At that point, you will no longer have the protection of automatic stay in place, and the mortgage company can restart the foreclosure process.
It is very important to maintain your payments under the repayment plan; if you don’t, you could wind up right back where you started and face foreclosure all over again.
For more information on How Chapter 13 Bankruptcy Can Help Stop Foreclosure, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (888) 402-5557 today.
Common errors to avoid when filing for Chapter 7 bankruptcy.
The consequences of not listing all creditors as you file.
The importance of documents and deadlines when filing for Chapter 7 bankruptcy.
How Can Failing To Complete The Means Test Correctly Affect Your Chapter 7 Bankruptcy Case?
Failing to correctly fill out the means test could lead to two different outcomes. In one scenario, you could believe that you qualify for Chapter 7 bankruptcy, but you don’t, as a deduction or stream of income was not properly reported in the means test.
In another situation, you may incorrectly believe you don’t qualify because you have failed to take deductions that would not have counted against you. Understanding the means test and filling it out correctly is crucial, so reviewing the document with a bankruptcy lawyer beforehand is important.
Why Is It Important To Disclose All Assets When Filing For Chapter 7 Bankruptcy?
First and foremost, you’re swearing under oath that you have disclosed all of your assets. That could have serious consequences if it is discovered that you own assets that were not disclosed in the schedules. From an ethical point of view, you have an absolute obligation to disclose all of your assets.
Can Transferring Assets Before Filing For Chapter 7 Bankruptcy Lead To Problems?
Potentially, yes. If you transfer assets before filing for bankruptcy, you must still disclose those transfers in a statement of financial affairs. This documents who the asset was transferred to and the consideration that paid for the transfer. Transferring assets will still raise the question of what you did with the money associated with that transfer, and those questions will need to be answered.
You can’t simply transfer assets into someone else’s name. But you do have the right to, for example, transfer a car by selling it. This simply needs to be disclosed when filing for bankruptcy.
Attorney Mike Wallace is a focused bankruptcy lawyer serving Texas. For nearly 20 years, he’s helped clients just like you navigate Chapter 7 bankruptcy, making the process simpler to understand and avoiding the serious mistakes that could lead to a dismissal.
Have questions or concerns about Chapter 7 bankruptcy? Reach out to Mike Wallace, P.C., at (888) 402-5557 today!
What Are The Consequences Of Running Up Debt Before Filing For Chapter 7 Bankruptcy?
Running up debt makes that debt non-dischargeable, meaning the debt run up before filing will still be there, waiting to be paid off after you come out of bankruptcy.
This can have negative consequences, and it’s best not to run up debt before filing.
What Are The Risks Of Not Listing All Creditors In Your Bankruptcy Petition?
You may realize that you owe money to a creditor, but you don’t have enough information from them to properly list them. You may have simply gotten a phone call and not yet received their contact and other information.
Fortunately, the current law states that if you file a no-asset Chapter 7 bankruptcy and fail to list a creditor, that creditor still gets discharged as long as the debt was incurred before the bankruptcy petition was filed.
Why Is It Crucial To File All Required Documents Accurately And On Time?
When you file bankruptcy, you swear under oath that your schedules are accurate. If they’re not and someone learns that they’re not accurate, then it could have such serious consequences that your bankruptcy could be dismissed.
There are time frames in which certain documents must be filed and information disclosed to the bankruptcy trustee. If this isn’t done, it can lead to certain documents being dismissed by the court or the whole bankruptcy petition being dismissed.
It is very important that the information in all documents is accurate and that they are submitted on time. To this end, having a knowledgeable attorney review and file all documents with you is central to ensuring your petition is filed correctly and that past creditors are discharged.
For more information on Mistakes To Avoid When Filing Chapter 7 Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (888) 402-5557 today.
Attorney Mike Wallace is a focused bankruptcy lawyer serving Texas. For nearly 20 years, he’s helped clients just like you navigate Chapter 7 bankruptcy, making the process simpler to understand and avoiding the serious mistakes that could lead to a dismissal.
Have questions or concerns about Chapter 7 bankruptcy? Reach out to Mike Wallace, P.C., at (888) 402-5557 today!
Consequence in Bankruptcy for Not Timely Filing Tax Returns
We fear the Internal Revenue Service because of their power over our lives. Therefore, clients come to our office that have failed to file an income tax return for certain tax years. Significant consequences can arise from not filing or late filing a tax return.
What to expect if contemplating bankruptcy and you have unfiled tax returns?
Courts have concluded that failing to file a timely return, by the due date or pursuant to an extension, can result in the following:
IRS can treat the late filed return as no return at all;
IRS can prepare what is known as a “substituted return; and
Taxes that might otherwise have been dischargeable in bankruptcy potentially become non-dischargeable.
Nothing good comes from failing to file an income tax return in a timely manner. I often find that bankruptcy clients have failed to file a return because they owe taxes that they cannot pay. Or, the Department of the Treasury is garnishing tax refunds that are due to the taxpayer. File your tax returns in a timely manner, no matter the consequences. File the tax return even if you are not paying the tax liability that is due.
So, the passage of time benefits taxpayers. If enough time passes, tax liability may be dischargeable in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy the tax liability may be a general unsecured claim. This results in the IRS having no priority over a credit card company.
You can determine if there are unfiled tax returns by going to www.irs.gov and clicking on “Get Your Tax Record.” Once you have established an online account you can obtain “Record of Account Transcripts.” Our firm is now an authorized paid tax preparer with the Internal Revenue Service, so please let us know if you have any questions regarding the preparation of overdue returns.
WHEN IT COMES TO CONSUMER BANKRUPTCY CHAPTER 13 IS OFTEN THE BEST CHOICE
Even though Chapter 7 bankruptcy can have many benefits for the Debtor who qualifies and has mainly unsecured debt they are seeking relief from, Chapter 13 bankruptcy has many advantages over Chapter 7. Chapter 13 has the following advantages:
If a Debtor is behind on mortgage payments and wants to save their home from foreclosure, Chapter 7 can prevent a foreclosure, but only for a temporary time. Chapter 13 allows for the restructuring of the arrearages to be paid over time.
An unsecured mortgage lien can be stripped off in a situation where the Debtor is underwater on their mortgage.
Chapter 13 bankruptcy allows a Debtor to keep their options open. The Debtor can most of the time dismiss and refile, can voluntarily dismiss the Chapter 13 or can convert to a Chapter 7 bankruptcy.
Mortgage holders are generally willing to work with a Chapter 13 Debtor related to loan modifications.
For a short period of time a Debtor can get a vehicle back after repossession.
If a motor vehicle was financed more than 910 days prior to a Chapter 13 bankruptcy, the creditor can be paid the value of the vehicle instead of what is owed on the vehicle. Additionally, Debtors who have a clear title to a vehicle and then borrow against that vehicle can pay the lender the value instead of what is owed.
Debtors can avoid the Reaffirmation Agreement process in Chapter 13 and avoid the risks associated with reaffirming the contract on a vehicle.
Debtors do not surrender non-exempt property in a Chapter 13.
Debtors maintain control over the disposition of non-exempt assets in Chapter 13 and can benefit from creditors not filing a claim in their Chapter 13.
Ability to deal with tax problems in Chapter 13.
Flexibility in the payment of attorney’s fees.
This is in no way an exhaustive list of the advantages of Chapter13, but it is some of the more common advantages. Please give me a call at (800) 867-1583 if you are considering filing a Chapter 13 bankruptcy and we can talk about your specific situation.
As always, any opinions expressed on this website are just that, opinions. Your individual situation might be different than outlined above, so it is probably best that you give me a call to discuss your individual situation. I pride myself on giving you the answers to your questions that are based on your individual circumstances.
