Christopher Todd Morrison, P.C.Houston Bankruptcy Attorney | Debt Relief Lawyer2024-02-12T19:29:45Zhttps://www.filebankruptcyhouston.com/feed/atom/WordPress/wp-content/uploads/sites/1402478/2021/12/cropped-site-icon-32x32.jpgOn Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=510142024-02-07T19:31:06Z2024-02-12T19:29:45ZDebt discharge
One of the primary benefits of Chapter 7 bankruptcy is the discharge of unsecured debts, such as credit card debt, medical bills and personal loans. Upon successful completion of the bankruptcy process, the debtor no longer has the obligation to repay qualifying debts.
No repayment plan
Unlike Chapter 13 bankruptcy, which involves the creation of a repayment plan to reorganize debts over a period of time, Chapter 7 does not require debtors to enter into a repayment plan. Instead, the process typically lasts a few months, offering a relatively quicker resolution for debtors.
No income threshold
Another reason for the popularity of Chapter 7 bankruptcy is that there is no income threshold for eligibility. While Chapter 13 bankruptcy requires debtors to have a steady source of income to fund the repayment plan, Chapter 7 is available to individuals regardless of their income level.
Fresh financial start
Chapter 7 bankruptcy allows debtors to achieve a fresh financial start by eliminating overwhelming debt and gaining control of their finances. It enables individuals to move forward with their lives and rebuild their credit over time.
Automatic stay
Upon filing for Chapter 7 bankruptcy, an automatic stay goes into effect, halting most collection actions and creditor harassment. This temporary relief provides debtors with breathing room to assess their financial situation and work towards a resolution without the pressure of ongoing creditor demands.
Exempt assets
Exempt assets in Chapter 7 bankruptcy are possessions that debtors can keep despite filing for bankruptcy. These may include items such as a primary residence, necessary clothing, household goods and certain retirement accounts. These assets can provide debtors with essential resources during and after bankruptcy proceedings.
Chapter 7 considerations
Deciding if Chapter 7 bankruptcy is right for you involves careful consideration of your financial situation:
Evaluate your level of debt, income, assets and financial goals.
Determine if your debts are primarily unsecured and if you qualify for Chapter 7 based on a means test.
Consider the potential impact on your credit score and future financial prospects.
Consulting with a financial advisor or bankruptcy professional can help you weigh the benefits and drawbacks of Chapter 7 bankruptcy before making a decision.
The pros and cons
Filing Chapter 7 bankruptcy has consequences but may give you a brighter future.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=509802023-12-14T21:25:32Z2023-12-15T21:24:25ZCreate a realistic budget
Begin your credit recovery journey by creating a realistic budget. Look at your monthly income and expenses and know the difference between your needs and wants. A well-structured budget helps you manage your finances effectively, ensuring that you can meet your financial obligations on time.
Establish a secured credit card
Consider getting a secured credit card as a tool for rebuilding credit. With a secured card, you provide a security deposit that becomes your credit limit. Responsible use, such as timely payments and low balances, shows financial discipline and positively impacts your credit score over time.
Make timely payments
Consistently making payments is one of the most significant ways to get a healthy credit score. Set up automatic payments or reminders to ensure that you never miss a due date. This simple habit goes a long way in rebuilding your creditworthiness.
Diversify your credit
While it is good to be cautious, responsibly diversifying your credit can benefit your credit score. This may involve obtaining a small installment loan or retail credit account. The key is to manage these additional credit lines wisely, keeping your overall debt manageable.
Regularly monitor your credit report
Stay vigilant about your credit report by obtaining regular copies from major credit bureaus. Reviewing your report allows you to identify and address any inaccuracies promptly. Monitoring your credit helps you track your progress and ensures that your financial history is accurately reflected.
Negotiate with creditors
Open communication with creditors is important. In some cases, negotiating for better terms or settling outstanding debts may be possible. Establishing a dialogue demonstrates your commitment to resolving financial issues and may lead to more favorable arrangements.
With over 386,800 personal or consumer bankruptcy petition filings happening in America in 2021 alone, this problem is a common one. Remember, each positive step contributes to rebuilding your creditworthiness.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=509452023-10-17T16:54:49Z2023-10-17T16:54:49ZYou will lose everything
One of the most common misconceptions about bankruptcy is that you lose everything you own in the process. With Chapter 13 bankruptcy, your debts get restructured into a new repayment plan. That means you keep your home, car and other assets.
It ruins your credit for life
Although bankruptcy does affect your credit when you file, that effect does not last forever. A Chapter 13 bankruptcy stays on your credit report for seven years. Its effect on your credit score diminishes with time and you can work to rebuild your credit over that period as well.
All of your debts get forgiven
Chapter 13 bankruptcy does not eliminate your debts in the same way that Chapter 7 will. Instead, your debts get restructured into a new payment plan. That means you might pay some of them in full over your repayment schedule. Not only that, but certain debts are ineligible for bankruptcy, including child support and most student loans.
According to the U.S. Federal Court, Chapter 13 bankruptcy accounted for approximately 40% of all bankruptcy cases in 2022, second only to Chapter 7 filings. When you find yourself overwhelmed by your debts, consider whether bankruptcy is right for you.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=509332023-08-15T01:05:12Z2023-08-15T01:05:12ZBankruptcy will ruin a credit score
Often, people worry about the effect that filing for bankruptcy will have on their credit score. While it is true that bankruptcy will temporarily lower a score, the filer can build their score back up over time. This is especially true since bankruptcy can make it easier for people to make their payments on time, which is one factor that greatly impacts credit scores.
Checking a credit score will lower it
When people cite this myth, they may be thinking of how credit scores can temporarily decrease when applying for something like a loan or credit card. However, simply checking on the score through a credit bureau will not lower the score. In fact, this is a good thing to do from time to time as it lets people know whether they are on the right financial path and enables them to spot any financial anomalies.
When people learn about some of the common misconceptions about credit scores and repair, especially when it comes to bankruptcy, they can make better financial decisions that increase their credit scores in the long run.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=509312023-06-22T19:17:22Z2023-06-22T19:17:22ZChapter 13 and unsecured debts
Unsecured debts are loans that a person does not back up with collateral. The most common forms of unsecured debt tend to be credit cards and medical bills.
Many Chapter 13 filings can discharge a portion of a person's unsecured debts. In some cases, a person may not have to repay unsecured debts at all, but creditors have the option of objecting to such a repayment plan.
However, the debtor could pass a disposable income test, which means the individual does not have enough money after paying for necessities and other bills to cover the unsecured debt within the repayment period. Consequently, the person could still discharge those debts.
Repayment of secured debts and priority claims
Mortgages and car loans are examples of common debts that a person secures with collateral. Under Chapter 13, the debtor must make these obligations current to avoid foreclosure or repossession. Still, the repayment plan makes it easier to catch up.
Also, debtors must repay priority claims when filing for Chapter 13. These claims include court costs, recent income taxes, spousal maintenance, child support and unpaid wages. However, some debts that resulted from divorce, older tax obligations, fines and penalties may be unsecured debts that the person can still discharge.
The optimal way to handle a bankruptcy varies by individual. Those considering filing for Chapter 13 should do significant research to make practical decisions for their financial future.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=509212023-04-18T18:40:55Z2023-04-18T18:40:55ZTell them to stop contacting you
It sounds unrealistic, but you can tell a creditor to stop calling you. Put the request in writing and specifically state that they can no longer call you to collect this debt. Keep in mind that you may still receive letters or other information from the creditor, including confirmation that they received your request. Keep a copy of the letter for yourself in case you need to reference it later.
Retain an attorney
Retaining an attorney to handle creditor communication provides the creditors with someone else to contact. As soon as you retain an attorney, send that information to your creditors and state that they must contact your attorney moving forward. This transitions the contact from you directly to your attorney.
File for bankruptcy
When you find yourself in a position where you lack the financial means to resolve your debts, bankruptcy might be your best solution. As soon as you file for bankruptcy, your creditors receive a cease and desist order and can no longer contact you to collect on that debt.
You do not have to put up with harassing creditor calls. Ask them to stop, redirect them to an attorney or file for bankruptcy to get relief.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=507052023-03-01T20:18:17Z2023-03-01T20:18:17ZHow bankruptcy affects your credit score
The higher your credit score is, the more you will see it drop from bankruptcy. Unfortunately, that means you will probably have poor credit at the end of the process. That is because bankruptcy will show on your credit history, encouraging you to become more financially responsible before reaccumulating debt.
How you can build credit after
Once you have your final discharge, you must wait 30 days to start working on your credit. At this point, your accounts will all be at zero, and creditors must stop calling you. You can rebuild your credit score when the stay prevents creditors from collecting on your debt. Chapter 7 bankruptcy remains on your report for ten years, but you will see improvements each year if you work hard.
Sometimes, your report can show inaccurate bankruptcy information. When this occurs, you must contact the reporting agencies to fix this. You may also have to deal with companies that incorrectly discharge your debt. Bankruptcies keep creditors from harassing you. Therefore, protect yourself from companies that do not follow these procedures properly.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=507032022-12-12T20:21:01Z2022-12-16T20:19:50Zan individual’s credit report for up to 10 years, making it difficult to obtain credit or loans during that time. However, over time, the effects on credit scores will improve.
Soon after bankruptcy
Initially filing for bankruptcy can have a significant negative impact on an individual’s credit score. Depending on the type of bankruptcy filed, the individual’s credit score can drop anywhere from 100 to 250 points. This can make it difficult to obtain credit or loans in the short term, as lenders will be wary of lending money to someone with a low credit score.
In the medium term, the individual’s credit score will slowly start to recover. As time passes, the bankruptcy will become less of a factor in the individual’s credit score.
In the far future
In the long term, the individual’s credit score will continue to rise as long as they make timely payments on their debts and maintain a good credit history. It is important to note that the individual’s credit score may never fully recover to its pre-bankruptcy level, but it can still improve over time.
Overall, bankruptcy can have a significant negative impact on an individual’s credit score in the short and medium term. However, with time and effort, the individual’s credit score can rebuild in the long term.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=506782022-10-18T19:02:27Z2022-10-18T19:02:27Z399,269 people filed for bankruptcy in 2021, according to the United States Courts. Additionally, ensure that misconceptions do not affect your choice. Three common myths include:
1. It means I’m financially reckless
Bankruptcy can happen to anyone, regardless of how much money you make. While mismanaging debt and finances may play a factor, many bankruptcies happen due to other circumstances or a combination of different factors. Common scenarios include a recent divorce, ongoing health issues or unemployment.
2. I will lose everything
Filing for bankruptcy does not equate lose everything. Many of your assets will stay exempt or your debtors may have no interest in them, such as a TV. If you own property, the situation can get more complicated, but bankruptcy laws offer protection. In many cases, the equity you have in your home or a vehicle will remain yours if you continue to make payments. If you own them outright, they stay exempt.
3. I will have bad credit for 10 years
In all likelihood, your current credit already indicates that you have some financial issues. Thus, filing for bankruptcy has a minimal effect on poor credit. Although bankruptcy stays on your credit report for up to 10 years, depending on the type of bankruptcy, it does not automatically affect your score. After filing, you have a fresh opportunity to build your credit score back up.
If considering bankruptcy, it means you have found yourself in a stressful situation. Ensure that misconceptions do not hold you back from getting back on your feet.]]>On Behalf of Christopher Todd Morrison, P.C.https://www.filebankruptcyhouston.com/?p=505952022-08-16T15:19:13Z2022-08-16T15:19:13Zdeclare bankruptcy because they fear losing everything. In truth, filing should not result in the wholesale liquidation of all you own.
What might you lose when filing for bankruptcy?
Certain belongings in bankruptcies are up for grabs. Examples include luxury vehicles, cash and jewelry. Vacation properties remain vulnerable. Losing homes is one of the greatest fears people have when filing. Rest assured, this happens only rarely.
Expect to lose your credit cards. The good news is you no longer have to pay them off. You also may apply for new ones before long.
What might you keep when filing for bankruptcy?
With an advocate by your side, you should be able to maintain control of the majority of your possessions. The aim is for you to keep everything necessary for maintaining your way of life. The car with which you commute and perform daily functions should remain. Anything that factors into your ability to work remains untouchable. For instance, you will not lose a home computer if necessary to conduct business. Should internet access be a need, you will still have that, too.
It is a myth that filing for bankruptcy causes petitioners to leave with nothing. You will be able to stay employed and maintain your current lifestyle. This knowledge should increase your comfort level with moving forward.]]>