Law Office of Gordon Mosley
Congress could make bankruptcy more attractive for many
On Behalf of Law Office of Gordon Mosley

Currently, lawmakers are evaluating proposed legislation for a potential vote that will allow for the establishment of a Chapter 10 bankruptcy filing classifying student loan debt as unsecured loans, just like credit cards. This means that many Texas residents who meet the criteria for filing can discharge the debt. This legislation is an alternative to the direct loan cancellation that many want, but it will still encounter some challenges along the way.

Potential problems for those who are financially secure

The proposal to cancel a certain amount of college loan debt across the board will be a more popular alternative for many who are other financially secure even though they have student loan debt. The bill, if passed, will require someone to file for Chapter 10 bankruptcy, and as it sits, it will also carry the same restrictions as a Chapter 7 filing for the proceeding seven years. Not to mention the negative impact a bankruptcy filing exacts on a filer’s credit rating.

Potential problems for Congress

Not only is the proposed legislation flawed, but there also are many individuals in Congress who think this is an irresponsible method of addressing the debt problem of former college students who are locked into long-term payment arrangements with the Department of Education. Private lenders actually hold much of the debt, and any decision Congress makes could well only apply to public loans through the various schools across the nation. Many colleges are private institutions that have been incorporated into the system.


Bankruptcy attorneys in Texas already see the complications with the new strategy that will be effective for some but not so much for others. The challenge for Congress will be finding the middle ground, where all debt-holding former students can benefit, to some degree, from the new student loan policy.

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

By On Behalf of Law Office of Gordon Mosley • February 21, 2022
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. Has action been taken against you? When you face overwhelming debt, you may also face letters and calls from creditors every day. Over time, you may have become adept at avoiding these attempts at contact or requested a stop to such actions. However, more significant actions may have been taken against you with which bankruptcy may be able to help. Two actions that may make you consider this debt relief option more seriously include: Wage garnishment: If creditors are directly garnishing wages from your paychecks in attempts to pay your outstanding balances, you already face serious financial trouble. You may need every penny you earn to make ends meet as it is, and when you cannot hold on to your wages, bankruptcy may be able to help stop garnishments. Lawsuits: When creditors feel that they cannot effectively get you to pay your balances on their own, they may sue you for payment. Lawsuits are serious matters that could cause you to face even more financial strife while also facing orders to pay your liabilities. Fortunately, bankruptcy could help stop judgments in such cases. Because these actions can have serious outcomes, taking steps to stop them may help you in the long run. Can you attempt other debt relief methods? If you are not yet facing wage garnishments or lawsuits, you may wonder whether you could first attempt other actions before bankruptcy. Certainly, creditor negotiation and credit counseling could act as possible avenues to try. Of course, not all creditors feel willing to negotiate, and you may still need to address your full balances. Additionally, you may want to remain wary of services which claim they can reduce your debt or help you become debt free as many of these claims turn into scams that cost unsuspecting individuals more money. Though it can be frightening to consider such a major action, exploring your bankruptcy options further may help you get your financial affairs in order and bring back your restful sleep.

Seeking debt relief does not make you a bad person

By On Behalf of Law Office of Gordon Mosley • February 21, 2022
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. Stigmas attached to bankruptcy There are three types of stigmas often associated with bankruptcy. These are: Financial Emotional Social Emotional and social stigmas are often combined. They refer to how you see yourself after pursing a bankruptcy filing and how you believe people view you. People are afraid to let others down or do not want others to know they are struggling. When drowning in debt, the only thing that should concern you is fixing the situation. It shouldn’t matter how you do it and it really is no concern of anybody else’s. You do what will best serve you. The financial stigma sounds bad, but it can be a good motivator. Will your credit score go down if you file for bankruptcy? Yes. Will it stay that way forever? Will you be financially doomed for the rest of your life for seeking relief? No. While credit recovery after bankruptcy can take time, it is possible to do if you take full advantage of the bankruptcy filing and are cautious in your future financial decisions. Don’t let the stigmas stop you At the end of the day, you have to do what is best for you and your family. That may involve pursuing a bankruptcy filing and that is okay — it does not make you a bad person. Don’t let the stigmas stop you from seeking the relief you need. If you are not sure if it is the best course of action, you can seek legal counsel on the matter and then go from there.
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