Do You Need Help Getting Creditors to Stop Harassing You about Debts?

If you're having trouble paying your bills, getting dunning notices from creditors, or if your accounts are being turned over to debt collectors, our Debt Relief Services can help!

Were you duped into taking multiple Merchant Cash Advance loans? Are collectors coming after you personally for bad receivables loans or bad factoring arrangements?

If you are worried about losing your home, car or business due to missed payments you’re not alone!

At The Lane Law Firm, we are passionate about helping small business owners in Texas who are struggling with debt. We get creditors to stop their harassing collection techniques. Depending on the amount, type of debt, and your ability to repay the debt, we will recommend a debt relief strategy that is tailored to your unique circumstances.

If you are the victim of a predatory - or otherwise illegal - loan or collection practice, we will vigorously pursue the lender(s) to ensure your fair and equal treatment under the law.

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Debt collectors are professionals at separating you from your money. Their "squeaky wheel" tactics are relentless, but often they go too far, illegally harassing borrowers and extracting money needed for necessities or survival.

If you are drowning in debt, or just starting to become overwhelmed, it's important to act quickly before a lawsuit is filed and bank accounts or wages are garnished, and before a sheriff or constable shows up at your business to seize your assets.

If the majority of your personal debt is related to your mortgage, you should check out our Foreclosure Relief Services.

If you are drowning in debt from car loans and other unsecured debt, you might be a candidate for bankruptcy, but all options should be considered before taking such a drastic measure.

To find out how to best handle your situation, contact our team at 877-408-3328 or click here to schedule a no-cost, no-obligation 100% confidential consultation.

 

Business Debt-Relief

For companies small or large that find themselves temporarily cash-flow challenged or completely overwhelmed with debt from traditional bank loans or Merchant Cash Advances, we can help!

At The Lane Law Firm, our experienced debt relief team will explore every option available to resolve your business debt while protecting your interests. Whether it’s a traditional business loan, supplier lawsuit, or Merchant Cash Advance, our team will help you create a strategy that works best for your specific financial situation.

Want to find out more about our Merchant Cash Advance relief program? Contact our team at 877-408-3328 or schedule a free consultation now.

Man with ball and chain on his leg that says “Debt” struggles to hold on a cliff with the title “Beware of the Merchant Cash Advance Debt Trap!”

Types of Debt Relief

Business Bankruptcy

If your company is overwhelmed with debt and can't keep up with payments on obligations, small business bankruptcy may be an option. Its consequences are long-lasting and far-reaching, so before you accept the "one-size-fits-all" approach most bankruptcy firms employ, consider all alternatives and then pursue bankruptcy as a last resort only if it's the best option for your unique situation.

Companies who follow the rules receive a discharge — a court order that says they don’t have to repay certain debts. However, it will impact your ability to do business, borrow money, etc. Still, it is a legal procedure that offers a fresh start for businesses who have gotten into financial difficulty and can't satisfy their debts.

There are two main types of business bankruptcy: Chapter 11 and Chapter 7. For most small business owners, Chapter 7 (liquidation) is a better option but in some situations, Chapter 11 (reorganization) is the way to go. There is even a Chapter 11, Subchapter 5 which provides a more cost-effective way to reorganize.

Which chapter is best depends on many factors. Some of those factors are: income, expenses, types of debts, long term goals and previous experience.

More Info on Business Bankruptcy Services

 

Quote Mark White-1

Extremely knowledgable, very helpful. I get the impression that the client`s comfort in dealing with sensitive and sometimes embarrassing situations is foremost in the companies mind. I also got the feeling that integrity was either in the Mission Statement or something that was considered of high importance.
-Ed

 

 

Personal Bankruptcy

If you are overwhelmed with debt and can't keep up with your mortgage, car payments, and/or other payments, personal bankruptcy may be your best option. Its consequences are long-lasting and far-reaching, so before you accept the "one-size-fits-all" approach most firms employ, consider all alternatives and then pursue it as a last resort only if it truly is the best option for your unique situation.

People who follow the rules receive a discharge — a court order that says they don’t have to repay certain debts. However, bankruptcy information (both the date of the filing and the later date of discharge) stays on a credit report for up to 10 years and can make it challenging to obtain new credit, buy a home, get life insurance, or sometimes get a job. Still, it is a legal procedure that offers a fresh start for people who have gotten into financial difficulty and can't satisfy their debts.

There are two main types of personal bankruptcy: Chapter 13 and Chapter 7. Each must be filed in federal court. Which chapter is best depends on many factors such as income, expenses, types of debts, long term goals and limits in various chapters. Experienced attorneys like The Lane Law Firm will help you decide which - if any - chapter is right for your unique circumstances.

 

Chapter 13

Chapter 13 offers the best way to restructure your personal debts. You can keep creditors from repossessing needed assets, and if you have a steady income, you can keep property like a mortgaged house or a car that you might otherwise lose through the process.

In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off your debts over three to five years rather than surrender any property. After you make all the payments under the plan, you receive a discharge of your debts.

Chapter 13 is a better option if you are behind on certain payments like a mortgage, car, tax or child support. If you earn too much to be eligible for Chapter 7 , Chapter 13 may be the best option for you.

 

Chapter 7

A Chapter 7 is the type of bankruptcy that allows an individual to eliminate debts quickly and move forward with a fresh start in a period of months. Chapter 7 sells your non-exempt property (most people in Texas have very little non-exempt property, if any) to pay your creditors. It provides the fastest elimination of debt, but is not as good for asset protection. If you need quick debt relief, Chapter 7 may be for you.

Both types of personal bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments and utility shut-offs, as well as debt putting a halt to collection activities. Both also provide exemptions that let you keep certain assets. This usually does not erase child support, alimony, fines, taxes, and some student loan obligations. And, unless you have an acceptable plan to catch up on your debt under Chapter 13, it usually does not allow you to keep property when your creditor has an unpaid mortgage or security lien on it.

If you want to keep a house, car, or both, then a Chapter 7 will not help. If you have medical bills or other debt and are current on your house and car payments, then Chapter 7 may be the best solution.

Bankruptcy is a lawsuit that is filed against creditors, and is conducted in federal courts. In order to file, you must complete documents for filing with the court as well as completing a credit counseling course. The court will ask you to provide your financial information. After a case is filed, you will be required to meet with a trustee. This meeting occurs about 30 days after your case is filed. We can represent you in these proceedings and work to protect your interests.

The process is different for Chapter 7 and 13 cases. The process should be completed for a Chapter 7 in approximately 4 to 6 months from the date of filing. A Chapter 13 case goes from 3 to 5 years. During each step, we provide ongoing support to our clients.

If you desire relief from creditors and to restructure your debt into a payment plan, Chapter 13 may be for you. Each situation is unique and deserves individualized attention. There is never any cost or obligation for your initial consultation, so schedule yours today.  

 

FAQs

Below are answers to the most common questions we hear from clients. If there is a question you have that we didn't cover, give us a call at 877-408-3328 and we'll be happy to answer it for you.

 

It allows debtors who are unable to pay all outstanding debts to rid themselves of these debts and obtain a fresh start.  

As stated by the US Supreme Court, it gives "the honest but unfortunate debtor … a new opportunity in life and a clear field for the future, unhampered by the pressure and discouragement of preexisting debt." (Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934)). 

There are six different types of bankruptcy, each known by the chapter in the Code in which it is located. Although they differ in form and procedure, they all provide for permanent relief from certain debts. In bankruptcy terms, the debtor's dischargeable debts are discharged. Most debtors file under Chapters 7, 11, and 13. 

  • Chapter 7 Provides for liquidation of the debtor's non-exempt assets. Certain assets, such as a home or car, may be exempt from it. A court-appointed trustee conducts the sale of the debtor's non-exempt assets and distributes the proceeds to creditors. Both individuals and businesses may file under Chapter 7. 
  • Chapter 9 - Provides for the reorganization of municipalities (which includes cities, towns, villages, taxing districts, municipal utilities, and school districts). 
  • Chapter 11 - Usually relied upon by partnerships and corporations. It provides for a supervised reorganization of a business and allows the debtor to maintain the business while implementing a payment plan confirmed by the court. 
  • Chapter 12 - Contains provisions applicable to family farmers and fisherman. 
  • Chapter 13 - Allows an individual with a regular income which is used to make a payment plan to pay debts, usually within three to five years. 
  • Chapter 15 - Applies to cross-border bankruptcies. It adopts and implements the United Nations' Model Law on Cross Border Insolvency. 

The goal of both Chapter 7 and Chapter 13  is a total discharge of debts. The main differences are the eligibility requirements, the length of time it takes, whether prepayment of debts is required, and how much of your property you can keep.  

In Chapter 7 you don’t need to repay your debts whereas in Chapter 13 you must repay all or a portion of your debts. 

Repaying your debts in Chapter 13 occurs over a 3-5 year period and you must have income sufficient to make full timely payments. You receive a discharge only after you complete your plan. Generally, you will not lose your property in a Chapter 13 as long as you account for repayment of any amount you are behind  as well as payments that come due during the plan. 

In contrast, in Chapter 7, a trustee can take the property you owe that is not exempt from collection to sell it and distribute the proceeds to your creditors so that they are repaid as much as possible. Typically you are able to keep some or all of the equity in your home, car, and personal property. Only those who pass a "means test" can file Chapter 7. Assuming you pass the means test and include all your debts in your paperwork, your debts are likely to be discharged within 4-6 months. 

It should be considered a last resort since it adversely affects your credit. Some people rush to file when they become stressed by the creditor harassment that arises out of minor debts. In most cases, creditors and collection agencies will not file a lawsuit against you to collect minor debts since doing so is costly. There are better ways to stop this type of harassment than filing. 

Good reasons to file include multiple wage garnishments, a creditors' threat to repossess property that is important to you, or to delay a foreclosure. Filing triggers an automatic stay which stops foreclosure, wage garnishment, lawsuits, and collections efforts. If you need to stop foreclosure on your home or repossession of your car and you believe you have the income to pay off these debts and keep this property, then Chapter 13 may be a good idea but it’s always best to consult an attorney first. 

If you believe you will have substantial expenses soon it may behoove you to hold off filing as the law limits how often you file. Chapter 7 will only erase the debt you have as of the filing date, and your Chapter 13 debt repayment plan may not take into account the future expenses. You can only discharge those debts included in your paperwork, so waiting to file may allow you to include all your debts in the petition and receive the biggest possible discharge. 

In general, debt-relief law is complex and can be confusing for a lay person. It is a good idea to consult a lawyer about your particular circumstances. 

While there is no minimum amount of debt to qualify for bankruptcy, certain debt limits do apply to Chapter 13 bankruptcy. The maximum amount currently is $1,149,525 in secured debt (such as a mortgage) and $383,175 in unsecured debt, but it does change periodically.  

There are limits on how many times you can discharge your debts in bankruptcy, so if your debt amount is relatively low, it may be a good idea to consider alternatives to bankruptcy now so that filing for bankruptcy remains an option for you in the future. 

Filing bankruptcy without a lawyer (or "pro se") is possible. However, the rules and procedures governing the bankruptcy discharge process are extremely complex, and therefore it can be very beneficial to hire an experienced bankruptcy attorney to avoid complications. 

Debtors who file bankruptcy pro se are responsible for knowing how the relevant bankruptcy laws and local court procedures apply to them. He/she must also fulfill any credit counseling obligations before filing your case. Failure to comply with these or any other requirements can result in the case being dismissed and filing fees forfeited. 

Chapter 7 cases involving few or no assets are more feasible to file on your own where Chapter 13 cases are more complex and generally necessitate the help of an attorney to avoid complications and achieve the desired discharge.  

The short answer is possibly. Most consumer debt can be eliminated through a bankruptcy discharge. If you forget to include a debt in the paperwork, however, it will not be discharged. Also, creditors have the opportunity to object to the discharge of any debt. There are 19 categories of debts that are considered "non-dischargeable," including many tax debts, child support, alimony, fines or penalties owed to the government, personal injury debts arising out of drunk driving accidents, criminal restitution, debts based on tax-advantaged retirement plans, and condo fee debts. 

Some debts normally considered non-dischargeable can be discharged if a creditor does not challenge your effort to get them discharged. These include credit card purchases worth more than $650 for luxury goods owed to a single creditor and incurred 90 days before filing, debts incurred due to willful and malicious personal or property injuries, and fraudulently obtained debts. Student loans are only discharged if you can convince the court that repaying the debt is an undue hardship for you. 

When you file for bankruptcy, your case becomes a matter of public record. This means that anyone can access court records online or call the bankruptcy court to obtain details regarding your case. Your bankruptcy case involves a Meeting of Creditors that is open to the public, though it is unusual for anyone who is not involved in the case to attend. It may be possible to seal portions of your case, but this only occurs in rare instances. 

Aside from court records, you may be listed in a local newspaper in relation to any public notices that are relevant to your case. Additionally, lenders you approach to apply for credit, and possibly employers, will learn of your bankruptcy filing if they review your credit history. However, a bankruptcy generally only stays on your credit report for 7 to 10 years, depending on whether you have filed Chapter 7 or Chapter 13 bankruptcy. 

Realistically, neither friends nor employers are likely to find out about your bankruptcy filing unless you disclose it to them, unless they look for it specifically. 

The impact of bankruptcy on your business depends on which chapter you file. Only individuals can file Chapter 13, so it can be used to reorganize the personal and business debts of a sole proprietor, but it will not affect a corporation, partnership, or limited liability company. A business will file under Chapter 7 or Chapter 11. 

Filing a Chapter 7 bankruptcy can wipe out your sole proprietorship's debts as it is not a separate legal entity from you personally. The business assets will be listed in the bankruptcy because they are your personal assets as well. A bankruptcy trustee will use the assets of a sole proprietorship to pay creditors back to the greatest possible extent. However, if you file a Chapter 7 bankruptcy your business will not be impacted if it is organized as a partnership, corporation, or limited liability. 

Chapter 11 bankruptcy is a business reorganization bankruptcy that allows your business to continue operating while reorganizing the debts according to a debt repayment plan. It is complicated, expensive, and appropriate for business owners who are trying to rebuild their businesses and continue operating. There are expedited proceedings available for small business debtors who are trying to restructure the business, but you only have 300 days to propose a plan to repay creditors. 

It is common for people to file for bankruptcy to stop a foreclosure or repossession of vehicles or equipment. Filing for bankruptcy triggers an automatic stay, requiring creditors to stop their collection efforts - including attempts to foreclose on or repossess property. Whether the bankruptcy fully stops foreclosure or repossession, or just delays these events, depends on the chapter of bankruptcy you file. 

Filing Chapter 7 bankruptcy allows you to delay a foreclosure sale for 3-4 months. It can buy you time to negotiate with a lender to modify the change the loan period or loan terms of the mortgage. However, a lender may move to lift the stay. Filing for Chapter 13 can not only stop the sale, but also allow you to propose a debt repayment plan that will cover arrearages as well as mortgage payments that come due during bankruptcy. As long as the plan is approved and you make timely payments on this plan over the 3-5 years of bankruptcy, you can avoid foreclosure altogether. Moreover, you may be able to strip any junior mortgages that are not secured from your home. 

While a Chapter 7 automatic stay stops a lender from repossessing your car, the lender can and probably will ask the court to lift the stay, unless you show that you are going to catch up on car payments or cure a default. The lender will need to show the court that its interests are inadequately protected because you have failed to make timely payments on the loan or you are in default. In most cases, if you cannot afford to catch up on car payments or cure your default, the court will lift the stay and will not stop a lender from repossessing your vehicle. 

However, you should be able to stop a repossession altogether if you adequately address arrearages and upcoming car loan payments in your Chapter 13 debt repayment plan. To keep your vehicle, you will also need to make adequate protection payments from the date your file for bankruptcy until the date the judge approves the plan. 

Medical debt is one of the primary causes of bankruptcy for individuals. Medical bills usually represent a form of unsecured debt, and they can be discharged through bankruptcy. 

In terms of how your debts are prioritized in repayment, the trustee handling your bankruptcy case is will pay off secured debts (such as mortgages, car, or other debts secured by property) with any available assets first. Medical debt, like credit card debt, is not likely to be tied to any collateral, meaning that medical creditors in many cases are left without payment after secured debts and higher priority unsecured debts (like child support and taxes) are paid off. Whether you file for Chapter 7 or Chapter 13 bankruptcy can often impact the extent to which any unsecured debts are satisfied. 

Student loans are considered non-dischargeable unless you can prove to the court that repaying the loans would be an undue hardship. You must file a Complaint to Determine dischargeability with the court, which will initiate a separate adversary proceeding. 

Different courts use different undue hardship tests, but most courts only grant a student loan discharge if you suffer a serious disability that prevents you from working, you have dependents, or you are elderly. Under one test, known as the Brunner test, you can only obtain a discharge if: (1) repaying student loans would result in you and your dependents living in impoverished circumstances, unable to maintain a basic standard of living; (2) your situation will continue over most of the student loan repayment period; and (3) you tried in good faith to repay the loan. Another hardship test looks at the totality of the circumstances. While it is difficult to pass these tests, it is not impossible. 

If you cannot pass the undue hardship test used by your court, you will owe student loans after a Chapter 7 is over. However, you may be able to pay a reduced student loan payment during your debt repayment plan. Regular payments will resume after you have completed your Chapter 13 plan. 

Generally speaking, most unsecured debts can be discharged through Chapter 7. Common types of unsecured debt include credit card debt, medical bills, and personal loans. However, other types of debt may not be dischargeable, including child or spousal support, some tax debt, and student loans. 

In all small business Chapter 7 cases which are not sole proprietorships, no discharges are offered for the business and it is considered effectively defunct after the filing. A trustee will be appointed by the court and subsequently will proceed to liquidate the assets of the company. In turn, he or she will distribute the proceeds from these sales to pay the company’s debts, taking the burden of debt management away from the business owners and putting it in the hands of a capable court-appointed official. 

When the burden of debt gets out-of-hand and creditors are hounding you daily, the prospect of bankruptcy protection can be very appealing. While Chapter 7 is frequently the more attractive choice due to the ability to discharge the most unsecured debts, there are specific requirements for Chapter 7 eligibility that you may not meet. 

If your income over the last six months was higher than the median for a household of your size and your disposable income is too great, you will not be eligible for the options afforded to debtors by Chapter 7. Determining eligibility can be complex, but a skilled attorney can help advise you on how best to proceed. 

Chapter 13 Advantages 

In some situations, Chapter 13 may offer a more appropriate solution to your unique financial situation, even if you are eligible for Chapter 7. Filing for Chapter 13 has the following advantages: 

  • You can keep your car or house, even if you are behind on payments. 
  • Your co-debtor cannot be pursued for debts following your filing. 
  • You may be viewed more favorably by prospective creditors in the future because you paid your debts. 
  • It allows you to restructure the terms of your repayment agreements with creditors. 

There is no universally applicable rule of thumb in deciding whether to pursue Chapter 7 or Chapter 13, and it is advisable to consult with a competent lawyer about your own situation. 

A successful Chapter 13 case may offer a desirable path forward to those who are earning income but are unable to keep up with their debts. It allows debtors to restructure their payment arrangements and satisfy these obligations over an extended period of time. For some, however, this may actually be a disservice. Chapter 13 repayment plans require that a large percentage of your outstanding debts, both secured and unsecured, be paid back in full. 

Filing for Chapter 7 offers a variety of advantages, but requires that the filer qualify by taking the means test, demonstrating that they do not have sufficient disposable income to pay back the debts they have accrued. If you do not meet the qualifications for Chapter 7, it is still possible to file for Chapter 13. 

Chapter 7 Advantages 

Filing for Chapter 7 is an advantageous decision for many people. It has the following advantages: 

  • You are not required to pay back any portion of your unsecured debts, as all eligible debts will be discharged. 
  • You will most likely be able to retain all property which you own. 
  • Chapter 7 proceedings move quickly. Most cases are completed in three to six months, whereas Chapter 13 involves a three to five year payment plan. 

When you have very limited disposable income and little or no real property, Chapter 7 is an excellent means to discharging most, if not all of your unsecured debt. 

Under Chapter 7, some of a debtor’s assets may be liquidated in order to provide compensation to the individual’s creditors. However, many, if not most, types of property are typically considered to be exempt, or protected, from the liquidation process, including a debtor’s home, motor vehicle, necessary household appliances, professional tools, and many other goods. If you are considering Chapter 7, an experienced attorney can help you review your situation and determine what exemptions you may qualify for. 

Chapter 7 is not available for business entities, but as the owner of a sole proprietorship, your business debts are also your personal debts. In this circumstance, filing for Chapter 7 is particularly advantageous as it will allow you to discharge all of your unsecured debt both personally and from your business. In circumstances such as this, it is actually possible to continue operating the business following bankruptcy. 

Chapter 11 allows a business to restructure its business organization in order to continue operation while repaying their debts through a structured plan. This process is much more complex than the Chapter 13 repayment plans used in personal bankruptcy, and the creditors of the business must accept the terms of the process before it will be approved. If your business debts are small enough, the company may be able to be classified as a “small business debtor”, which greatly expedites the process. 

The most serious debts you owe are those which are backed by collateral or secured against default. This includes mortgages, car loans, and any other debts which are backed by real property. Any other debt you owe is considered unsecured and you cannot be forced to surrender property or wages on such debts unless your creditors obtain a court judgment against you. Credit cards, personal loans, and department store debt are all examples of unsecured debt. 

The distinction between a secured debt and an unsecured debt makes an enormous amount of difference in the proceedings as collections and discharges are determined by the security of the debt. A secured debt is any financial obligation you owe which is backed by collateral. This means that the creditor can recover a specific item of value in the event of a default. Some of the most common types of secured debts are car loans and mortgages, where the car or house is the collateral, but various other types of debts may also be secured. A perfected lien also qualifies as a secured debt. 

One of the primary benefits of filing  is the protection the court offers you from creditors and collectors during your proceedings. When you file, the court grants you an ‘automatic stay’ on the collection of debt, which means that all creditors are legally barred from attempting to recover money from you. It is possible for a creditor to regain the right to attempt collections, but only if they receive special dispensation from the court. 

The automatic stay can also temporarily stop foreclosure proceedings, utility shut-offs, and evictions. However, the stay will likely not apply to certain proceedings, such as legal actions to collect child support or alimony, and certain IRS matters. In some cases, creditors may also ask the court to lift the stay. 

Most unsecured debts can be discharged through a Chapter 7, including credit card debt, medical bills, and personal loans. However, other types of debt may not be dischargeable , including child or spousal support, some tax debt, and student loans. 

Have a question we didn’t answer? Give us a call at 877-408-3328, or click here to schedule a free consultation.