What are my options before I file bankruptcy in Victoria, Texas?
Some creditors will allow you to work out payment plans to better suit your financial situation. However, credit card companies are less likely to do this. Be weary of making deals with home mortgage companies as many times the right hand doesn’t know what the left hand is doing. It would be in your best interest to consult with an attorney who is familiar with debt relief options, such as a bankruptcy attorney who has access to a CPA.
What are different types of debt and why does it matter in Victoria, Texas?
There are two types of debt, secured and unsecured. A secured debt is one in which the debtor has given the creditor a security interest in their property. The security interest is evidenced by a deed of trust (for a house), a security agreement (for a vehicle), or a UCC-1 (for inventory or other personal/business property.
Another type of lien is called a mechanic’s and material man’s lien. This occurs when a contractor or service person comes to your house and does work and you fail to pay for the services rendered. Auto mechanics can also place a lien on your vehicle if they have provided repairs or other services and you do not pay the bill.
The IRS or other taxing authorities can place a lien on your home for failure to pay income or property taxes.
An unsecured debt is one where the lender does not have collateral or a security interest. Examples of an unsecured debt are things like credit cards or medical bills.
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What can be repossessed in Texas? What cannot be repossessed in Texas?
Any property that is used as collateral for a loan can be repossessed by a lender. For example, if you do not pay your mortgage payment, the bank can foreclose on your house; an auto finance company can repossess your vehicle.
In Texas, a creditor other than other than an entity who holds a purchase money security interest, a mechanics and materialmen’s lien, or the IRS or other taxing authority, CANNOT make you sell your home to pay your debt or a judgement, nor can such a creditor garnish your wages.
What happens during the repossession process in Texas?
While any creditor must give you notice and an opportunity to cure or resolve the default, The process is different between a foreclosure and a repossession.
In a foreclosure, the lender must send you notice that your payments are in default, state the amount of the defaulted payment, give you at least 20 days to cure, and express it’s intent to accelerate the entire balance due on the note. If your balance is not brought current within the 20 day period, the lender will then send you another notice stating the balance due under the note has been accelerated and you have 21 days to cure or the property will be foreclosed.
Foreclosure sales can only be held on the first Tuesday of each month. You must be notified of the date of the foreclosure sale. If the note is still in default, the lender will proceed to sell the property at a foreclosure sale.
For vehicles or other property such as furniture, after the creditor has given 30 days notice that the loan is in default and you do not bring the note current, the creditor can come and repossess the property. In doing so, the creditor may not, “breach the peace.” This means the creditor cannot remove a lock, trespass onto your property, or take the property over your objections.
What do I do when I get a foreclosure notice from a bank?
If you get a foreclosure you should immediately contact the creditor that sent you the notice to see if you can make some arrangement with the creditor to prevent the foreclosure. If the creditor is unwilling or unable to work with you, you should immediately contact an attorney who is an expert in debt relief procedures.
Can I fight my foreclosure proceedings in court?
The only way to stop a foreclosure is to either file for bankruptcy protection or, if you believe the creditor has not complied with the requirements of the Texas Property Code, or you believe you are not in default, you can file suit in district court to obtain an injunction that prohibits the lender from proceeding with the foreclosure. It is difficult, however, to obtain such an injunction
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