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Law Office of Gordon Mosley
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Tyler Texas Bankruptcy Law Blog

Help with medical debt through bankruptcy options

Unexpected life challenges such as the loss of a job or medical expenses can result in debt that only adds stress to the lives of individuals who may already be struggling. Relief from debt and a fresh financial start can be available through bankruptcy options. There are two primary personal bankruptcy options to consider including Chapter 7 liquidation bankruptcy and Chapter 13 reorganization bankruptcy.

Mounting medical expenses can leave an individual who is struggling with their health behind and in a position that can feel hopeless and as though they may never be able to catch up on the medical bills they face. Chapter 7 bankruptcy is one bankruptcy option to consider which allows the filing party to liquidate assets to repay creditors, while protecting certain categories of property referred to as exempt property. Medical debt is considered unsecured debt which can likely be discharged during the Chapter 7 bankruptcy process.

Bankruptcy's automatic stay: what it can and cannot do (Part 1)

When Tyler residents file for bankruptcy - whether Chapter 7, Chapter 13 or another form of protection - they gain the immediate benefit of the automatic stay. The automatic stay halts efforts to collect on your debt while the bankruptcy proceeds through the court. This is a powerful tool for consumers, but it's important to understand the limitations of the automatic stay as well as creditors' rights with regards to the automatic stay.

First, let's look in some detail as just what the automatic stay can do to help a borrower filing for bankruptcy. It can stop a bank's attempt to foreclose on your home: a particularly important factor for those using Chapter 13 as a way to keep their homes after bankruptcy. In many cases, the automatic stay can at least delay a landlord's attempt to evict you from your apartment, although a landlord may still be able to evict if he or she has a judgment against you from before the automatic stay took effect, or if there's evidence that you are violating your lease in other ways.

Chapter 7 can help eliminate debt that you did not sign up for

Public school teachers in Tyler, like their colleagues throughout the country, are accustomed to earning a modest salary. In many cases, salaries would rightly be called "low," especially for those working in schools in low-income areas.

The federal government often provides grants to young college graduates to help encourage them to take these jobs, but it turns out that some of these grants are getting converted into thousands of dollars in debt. Known as TEACH Grants, they are available for teachers who commit to teaching approved subjects in approved low-income schools for a period of four years. The grants can provide as much as $16,000 over the term of the commitment. If a teacher breaks the commitment, the government can require that the sum be paid back, effectively turning it into a loan instead of a grant.

Facing garnishment, lawsuits? Bankruptcy may be able to help.

During the day, you may have the ability to keep your financial worries somewhat at bay by concentrating on other tasks. However, when the time comes to get in bed for the night, those thoughts that stayed at the edge of your mind all day may come flooding forward. How will you make your next credit card payment? When will the next creditor call? What can you do about your garnished wages?

These concerns affect numerous people who must contend with overwhelming debt. No matter what led to your debt, you do have options for effectively addressing those liabilities. In particular, bankruptcy may act as a significant step toward a fresh financial start. However, you may wonder whether taking this action really suits your circumstances.

How do debt relief companies, credit counselors work? (Part 2)

We'll pick up this week where we left off from our discussion of debt relief companies and credit counseling services. Tyler residents searching for debt relief options are likely to encounter these two types of entities, and it's important to understand the difference between the two as well as their limitations.

Unlike a credit counseling program, which will offer financial advice and may be able to help you reduce your monthly payments (but not the total amount you owe), a debt relief or debt settlement company will offer to negotiate with your creditors to reduce your actual debt in exchange for a lump-sum payment by you for the remaining balance. You may need to save up a certain amount of funds in a dedicated account first. Then, the debt relief company will use the funds in that account to pay off the reduced balances that it negotiates on your behalf.

How do debt relief companies, credit counselors work? (Part 1)

Tyler residents burdened with debt and seeking some debt relief have a number of options. Credit counseling (usually offered by a non-profit organization) is one common option; another is debt settlement through a private company. The two are similar, which may leave consumers wondering: just what is the difference between debt settlement and credit counseling services?

First, let's look at credit counseling organizations. As the name suggests, these entities offer information on money management, including how to handle significant debt. Consumers can meet with a credit counselor for one or more counseling sessions. A credit counseling organization will typically offer a debt management plan as one way to get ahead on your debts.

Have you been sued by a creditor over your consumer debt?

The professionals at the Law Office of Gordon Mosley have decades of experience protecting the legal rights of Tyler residents struggling with consumer debt. During this time we have seen all manner of collection techniques, among the most concerning of which can be creditor lawsuits.

A creditor lawsuit can completely blindside a consumer. You may be doing everything you can to make enough money to at least send some small payment to your creditors each month. Then, suddenly, you receive a legal complaint regarding your unpaid debts along with a summons to appear in court. You find yourself anxious, stressed, perhaps even fearful at the thought of having to face your creditors and their attorneys in court and explain to a judge the intimate details of your financial situation. And you know that a judgment against you could be ruinous.

Chapter 11 filings in Texas up over 40 percent in 2017

Like many cities in Texas, Tyler has a proud history of entrepreneurship and small business development. While that environment always comes with its ups and down, business owners can be forgiven if it felt like 2017 packed a harder punch than usual.

The fact is that almost as many Texas businesses filed for Chapter 11 bankruptcy in 2017 as did during the height of the recession following the housing market collapse: more than one thousand businesses. That was a spike of over 40 percent above the 2016 filing rate. This is in spite of a relatively strong economy and steady gas prices.

Seeking debt relief does not make you a bad person

No matter what you do, you just can't seem to get your head above water financially. In the last little while you've experienced loss of income, or you've had unexpected emergency expenses that you had to put on credit cards, or you or a loved one may have suffered a serious medical event, costing your family a small fortune. Maybe it was a combination of these or other hardships. Now you need help, but feel you are a bad person for seeking debt relief.

There is and always has been a certain stigma surrounding bankruptcy in the United States. The truth of the matter is, Texas residents who need financial help are not bad people and no one should make them feel bad for asking for help. It is their right to pursue bankruptcy if it is what will best serve their interests.

Interested in eliminating debt from medical expenses?

We've spent some time over the past few weeks on our Tyler bankruptcy law blog discussing medical expenses, including the unexpected kind from out-of-network providers that many people fear even more than a serious illness itself. Even Tyler residents who understand that filing for Chapter 7 bankruptcy can eliminate debt like this may resist out of a fear of the unknown, or a fear of how bankruptcy will change their lives.

The professionals at the Law Office of Gordon Mosley have been helping clients understand the changes that come with Chapter 7 bankruptcy for more than two decades. Of course, in Chapter 7, it's true that assets not owned outright may have to be liquidated. But some medical debts can easily run from the tens into even the hundreds of thousands of dollars. If you sold off some assets on your own, would you be able to come up with enough to erase 100 percent of that debt, as Chapter 7 does? It's important to analyze your situation carefully before making a decision.

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