The Cost of Waiting

You’re in debt and know you can’t pay it — ever. But the idea of bankruptcy scares, concerns, or embarasses you. So, you wait. Bills pile up, creditors start to sue you, the repo man starts sniffing around your driveway, and eventually the certified letters from the mortgage holder, collection attorneys, and IRS arrive. Your paycheck possibly gets garnished. All of these are actualities that occur daily — and are even more frequent in difficult times.

But there’s more to lose than just your money, property, pride, and sense of self-worth — and that’s the damage debt does to your relationships. Broken marriages, time spent away from your children while you work second or third jobs, shutting yourself off from the world and those who love you. These are real, permanent costs of waiting to file a bankruptcy.

Chances are, there are real people suffering — you and your family — by your decision to wait. Stop the bleeding now. Come see us, find out what your options are and get on with your life.
Don’t let your debt destroy your life.


Avoiding Identity Theft—What You Can Do

Identity—it’s more than your name, it’s life as you know it

Someone uses your credit card to charge a Caribbean vacation. Or accesses your bank account and drains it of funds. Or uses your ID while committing a crime. Identity theft refers to a broad range of crimes, including misuse of your financial information, name, Social Security Number and reputation. Unfortunately, it may take months, even years, to repair your financial situation and reestablish your good credit rating.

Steps you should take to avoid identity theft:

  • Check balances and transactions on your checking account and credit card accounts every day. Watch for any unexplained transaction, even as small as a penny.
  • Watch your credit report. You are entitled to a free annual report from each of the major credit reporting companies: Experian, Equifax and TransUnion. Stagger your requests so you get a report every four months. You can call 1-877-322-8228, mail a request to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281, or visit annualcreditreport.com to get started. Avoid copycat websites that try to get you to sign up for “free” reports—and trial memberships that will cost you money.
  • When choosing passwords for online accounts, avoid information that could be researched, such as your mother’s maiden name or the last four digits of your social security number. Use a unique number for each site. One way to do this without losing track of everything is to begin with a sequence of random numbers. For each website, change that pattern in a certain way, such as inserting the first or last character in the URL into the password. Do not keep a written copy of passwords near your computer or in your wallet.
  • If a driver’s license, passport, employee ID, credit card or other agency issued card or document is lost or stolen, immediately notify the organization that issued the document to have it canceled and arrange for a replacement.

Watch for these signs you may be a victim of identity theft:

  • You aren’t receiving bills you normally would receive. This might be a sign your mail has been hijacked and is being sent to another address.
  • Your credit report shows an account you didn’t open.
  • Your checking account or credit card account shows a tiny transaction—this may be a “ping” or test transaction before the thief empties the account.
  • You receive a credit card in the mail—even though you didn’t open an account.
  • You are denied credit or charged a high interest rate when you previously had a good credit rating.
  • You open an email that appeared to be from your financial institution or credit card company, and then realized you were “phished”—tricked into giving personal information such as a Social Security Number.
  • You received a notice that a company you do business with has had a security breach and your data may be involved.
  • You receive a call from a debt collector about a purchase you didn’t make.
  • A company denies your application for credit, insurance or employment and states it is related to your credit report.

If there are errors on your credit report or you are a victim of identity theft or credit card fraud, you will need to track each party involved—debt collectors, credit card companies, banks, credit reporting agencies—to see that the records are corrected. This can be a long, difficult and painful process. You may want to enlist the help of a financial attorney to regain your financial standing as quickly as possible.

Contact an experienced attorney at Bailey & Galyen to discuss your options after identity theft or credit fraud. Contact us at 800-215-9089 to arrange a no-cost, no-obligation consultation.


Protect Yourself Against Unscrupulous Debt Collectors

Federal Trade Commission reports rise in complaints

Are you being harassed for unpaid bills? You may have gotten behind in your payments, or the bills may not even be yours! Under the Fair Debt Collection Practices Act (FDCPA), you have the right to protect yourself against debt collectors who use abusive, unfair or deceptive practices. Reports of illegal debt collection actions are growing. In fact, the Federal Trade Commission’s 2011 report noted an amazing 76 percent increase in complaints of debt collectors using false threats of arrest or property seizure, and a 66 percent increase in complaints of their use or threat of violence.

The first step in protecting yourself against unscrupulous debt collectors is to know your rights under federal law.

You may want to talk with the debt collector once to be sure the debt involved is yours or to discuss a way to resolve it, but you can refuse contact. If you inform the collector you are represented by a bankruptcy attorney or other counsel, the collector must contact your lawyer rather than you. Whether you have a lawyer or not, you may state in writing that you do not want to be contacted again. Send the letter by certified mail so you can prove the collection agency received the notice. Other than notifying you of an action such as a lawsuit, the collection agency is prohibited from contacting you again. Insist the collection agency send you a description of the debt, and your rights, in writing.

It is illegal for a debt collector make harassing phone calls, including calling repeatedly or continuously, to call you before 8 am or after 9 pm, or to call you at work, if you have told them you are not allowed to take calls there. The debt collector may talk to you, your spouse and your attorney about your debt. Other forms of illegal harassment include threats, swearing, obscenities, repeated calls and publishing your name (except to a credit reporting agency). A debt collector may not misrepresent the amount or status of your debt, or the collector’s identity or employer, including any implication the collector is a government agent. The collector may not talk to neighbors, relatives or others about your debt, but may ask them (once) for your address, home phone and place of employment. The debt collector must honor your wish not to be contacted at inconvenient times and a statement that you are not allowed to take calls at work. You must be given written notice of a lawsuit.

You do not have to deal with the debt collector, but it will then be wise to hire an attorney. Provide your lawyer’s contact information and you should not be contacted again. Complaints of illegal debt collection tactics should be filed with the Federal Trade Commission.

If you would like to obtain additional information about Texas bankruptcy, explore your options, learn about the bankruptcy process or discuss your particular situation with an experienced Texas Bankruptcy Attorney, please contact Bailey & Galyen today.


Three Reasons to File for Bankruptcy

Bailey & Galyen
Your Neighborhood Law Firm

The reasons people decide, after months and years of struggle, to file for bankruptcy are individual and unique. But for most people, it’s situational – an unexpected job loss, medical problem, or divorce has created financial chaos and an inability to pay debts. While the facts in your case are somewhat unique to you, the truth is that everyone who files a bankruptcy does so for one (or more) of the following three reasons:

Reason Number One: Only Bankruptcy Gets All of Your Creditors off Your Back Right Now

Until you downloaded this information, Creditors have outmaneuvered you, putting you right where they wanted. Creditors use bill collectors and attorneys (often paid on commission) to use all means at their disposal – legal or otherwise – to get their pound of flesh from you. This takes many forms:

• Threatening Phone Calls – to your home, work, neighbors, and relatives
• Threatening Letters
• In-person collection visits to your home
• Offers of “settlement” where they get into your bank account
• Repossession of cars and other personal property
• Lawsuits, judgments, and collections on judgments with garnishments and levies
• Foreclosure of your home and other real estate

Their only goal is to get your money. They are utterly uninterested in your personal situation (no matter how dire) and will do whatever it takes to get you to pay. They know something you don’t – that your money is a limited resource, and that they are in competition with other creditors for that resource. They think, if we don’t get their money now, someone else will. Creditors therefore have no qualms about upsetting you personally or ruining your life to collect the money owed them. And creditors don’t care if you don’t have the resources to hire an attorney to defend against their tactics. They don’t care about your sleepless nights and feelings of guilt or embarrassment.

But here’s the good news: a bankruptcy filing automatically stays (stops) all creditor collection activity – even lawsuits, repossessions, and foreclosures – immediately.

The automatic stay is powerful and only available in federal bankruptcy court. It goes into effective immediately, nationwide, and lasts for the duration of the case unless otherwise ordered by the court – a financial force field around you, your family, and your assets.

Reason Number Two: Bankruptcy Can Give You a Fresh Start

One of the biggest reasons non-bankruptcy options fail (such as debt settlement, credit counseling, and debt consolidation) is simply the lack of a “finish line.” For many people in debt, there is simply no end in sight. Whether your income is reduced or your expenses are stretching you to the breaking point, ask yourself: are you trapped in debt you can never repay? When is this nightmare going to end?

Debt is a burden. Its effects on your mental (and physical!) health as well as your personal relationships (with spouse, family, and friends) are well-established. Wanting relief from this burden is a natural, normal, and a positive reaction to a bad situation. This is why we have had bankruptcy laws in the United States since the founding of our nation – because we believe, as a country, that people are entitled to a second chance. Bankruptcy can help good people resolve bad situations.

If you are reading this, you have probably tried all other options to resolve your debts. Let’s go over traditional non-bankruptcy options and explain their shortcomings.

• Debt Settlement – requires a lump sum of money to settle for a portion of the total debt. To obtain this lump sum, you may have to save up – while the interest grows and lawsuits and other collection efforts ramp up against you. Debt settlement companies routinely charge $5,000.00 or more to negotiate your debts and require their fee up front. For most of our clients, the truth is harsh – if you had the money to pay your debts, you wouldn’t be reading this. And creditors won’t wait around for you to save up enough money to pay them a fraction of their debt.
• Debt Consolidation – this essentially refinances your debt into one payment with (ideally) a lower interest rate. This option assumes that (a) you have the credit and collateral (bank deposits, land, etc.) to get the loan and (b) you can afford a payment at the lower rate. If you had good credit and the ability to borrow your way out of your debt problem, you wouldn’t be reading this. For many of our clients, the problem isn’t just the interest rate, it’s the sheer size of their debts compared to their ability to pay.
• Credit Counseling – while credit counseling is effective for borrowers with a small amount of credit card debt, it simply does not work if you have a significant ($10,000.00 or more, typically) in credit card debt or if you have other debts. Credit counseling cannot resolve your medical bills, non-credit card balances (broken cell phone contracts, apartment leases, old repossessions, etc.), and of course debts owed for taxes, student loans, and child support. Simply put, in most situations credit counseling only works for folks with a small amount of credit card debt.

Bankruptcy will, in the vast majority of cases, give you a fresh start through the discharge – a court order that forever eliminates most debts. Wouldn’t it be nice to be permanently rid of your creditors so that you can rebuild your life and take care of your family?

Bankruptcy can permanently eliminate credit cards, medical bills, personal loans, debts from broken leases and contracts, repossession and foreclosure deficiencies, and many other kinds of debt. While some debts (notably IRS obligations, student loans, and child support) are generally not dischargeable, there are available bankruptcy options to deal with these debts as well – most notably, to set up a payment arrangement without any future interest or penalties.

Reason Number Three: Bankruptcy Can Help You Keep your Assets

Sometimes, creditors want more than your money – they want your house, your car, and your bank account. Depending on the type of debt involved, outside of bankruptcy this is unfortunately a fact of life. What can creditors do to your property?

• Foreclosure – In Texas, if you are in default, home lenders have the power to take your home from you after a fairly short period of time – without a court order. Certain other creditors (such as taxing authorities), after filing a lawsuit, may be able to foreclose your home as well.
• Repossession – Your car creditor can generally repossess your vehicle at any time you are in default – without a court order. Once repossessed, they can then sell it as soon as seven days later.
• Garnishment & Levy – While garnishment of wages in Texas is generally prohibited (other than for child support and taxes), after getting a judgment creditors can garnish bank accounts and other financial assets and seize personal property assets to be auctioned off to pay the debt.
• Abstract of Judgment – even if creditors can’t reach your assets presently, after a court order a judgment can be abstracted in the county records, impairing the legal title to your home and other real property. This means, as a practical matter, that it will be difficult to buy, sell, or refinance a home or other real property until the judgment is resolved.

Bankruptcy not only stops these collection activities– it protects your most important property, too. If you are eligible, Texas law allows you to protect your homestead, a vehicle for each driving-age member of your household, clothing, furniture, jewelry, household goods, retirement accounts, life insurance policies, and even family pets. And while these assets are also generally exempt outside of bankruptcy, only bankruptcy stops the collection activities against your property and allows you to discharge the underlying debts forever so that you will not face a garnishment of your bank accounts or have to deal with a judgment lien years down the road.

In bankruptcy, as long as you continue to make your regular installment payments on your home and car, those assets cannot be foreclosed or repossessed. And even if you are behind on these payments, a payment plan can be established in bankruptcy to catch you up and keep your property.

The next step – give us a call for a free consultation with a licensed attorney. Relief is literally one phone call away!

Get Creditors Off Your Back

Get a Fresh Start

Keep your Assets

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