San Antonio Bankruptcy Attorney Blog

The real estate meltdown has affected different parts of the country in very different ways.

In over-built areas like Phoenix or Miami, the drop in values, and the high rate of foreclosure, remains acute. Yet there are other regions of the U.S. where prices and home ownership have remained more stable.

Even in more stable regions, however, bankruptcy filings to prevent foreclosure are a common occurrence.

What about San Antonio and other parts of Texas, including Austin, Killeen and the Rio Grande Valley?

Statistics released late last month from CoreLogic and RealtyTrac show that foreclosure rates in San Antonio and New Braunfels declined in February of this year compared to February of last year.

The decline was slight, though, from a rate of 1.34 percent of mortgage loans in February 2011 to 1.3 in February 2012.

The rate of mortgage loans in delinquency was up. In the San Antonio area, the percentage of such loans that were 90 days or more delinquent was 4.71. This was up from 4.62 in February of last year.

In Texas as a whole, the delinquency rate was 4.78 in February of this year. This was down from a statewide figure of 4.93 in the same month last year.

If you have health insurance, do you still need to worry about medical debt? In theory, the answer should be no; after all, the main purpose of having insurance is to cover the medical costs when you or a close family member gets sick.

In practice, however, the answer is quite different. After the co-pays and premium hikes have been factored in, the increasing out-of-pocket cost of healthcare can be a burden even for someone with health insurance.

This, in turn, can be a factor in filing for bankruptcy in San Antonio, the Rio Grande Valley or elsewhere in Texas.

The National Center for Health Statistics recently released the results of a survey on payment of medical bills. In 2010, one of every five families in the U.S. reported having trouble paying medical bills. By last year, the percentage had gone up sharply to nearly one in every three.

To be sure, problems with medical debt are more frequent for people without insurance. Among the uninsured, nearly half report problems with paying medical bills.

The real surprise is how many people with insurance also have problems. The survey showed that 30 percent of the people with private insurance reported problems with paying their medical bills. For those with public insurance, the percentage was 40 percent.

Tax debt is a recipe for trouble - unless you respond proactively to the problem.

Don't just let your wages become the object of an IRS tax levy. Here are some things to think about, as you consider filing for bankruptcy and other debt relief options.

First, let's consider the word "levy" and distinguish it from the related concept of a "lien."

A levy involves a seizure of property that is done with legal authority. A lien is somewhat different; it is filed as a form of security. For example, an IRS lien against your house can prevent you from selling it until your tax debt is resolved.

A good example of a levy is a state or federal action directed at your wages. The IRS or a state revenue agency can go after a portion of your paycheck to satisfy tax debt.

Wage garnishment is only one type of levy. There are also others, including levy against a bank account. Another is levy against federal payments that may be due to you, such as a tax refund.

There are very specific notice requirements that the IRS or state revenue agency must meet before collecting money through such levies

Bankruptcy and taxes can go together in a couple of different ways.

For people in search of debt relief, bankruptcy can potentially allow the discharge of income tax debt. This could include stopping an IRS tax levy.

There's another way as well. New research shows that many Americans who are short of cash are using their tax rebates to pay for a bankruptcy filing.

Jialan Wang, a business finance professor at Washington University in St. Louis, collaborated with colleagues at two other schools on the research. The focus was on the connection between tax rebates and bankruptcy filings. The study examined two different years: 2001 and 2008.

Those years were chosen because they were years in which many people received rebates.

In 2001, bankruptcy filings increased by two percent after rebate checks were issued. In 2008, the increase was even greater: seven percent.

As Prof. Wang pointed out in her published paper, the 2005 overhaul of federal bankruptcy law significantly increased the cost of filing for bankruptcy. Legal and administrative rose substantially. The amended law also imposed a new requirement of credit counseling, which the bankruptcy filer had to pay for.