Law Firm of Gregory A Ross, PC

April 28, 2011

Chapter 7 and Chapter 13 Bankruptcy Myths and Fallacies

Bankruptcy Solutions

No, THE 2005 REFORM ACT just made it more difficult and added SPEED BUMPS to overcome. This is why you need to consult a consumer bankruptcy attorney before you do anything if you are in financial distress.

No, do not wait until it is an emergency with bank restraints and income executions. Figure out where you will be financially 6 months from now. Will it be better or worse?

No, the starting point is the MEDIAN INCOME set in the Means Test under the new law which is currently $38,294 for single person with no dependents in Texas.
– $55,178 for family of 2.
– $65,477 for family of 4.
– Each state is different.
This is just a starting point. Certain expenses will help qualify you, so one’s gross income can be substantially higher in some cases. See your local Salinas and Monterey bankruptcy attorney to see if you qualify.

NO: Each state has different protection for homes. If your home is underwater (meaning no equity in it), it is not considered an asset in the bankruptcy and you may elect to keep it or surrender it. Texas has an unlimited dollar value homestead exemptions to protect equity in your principal residence.

Let’s face it: most clients already have bad credit. Question is: What are you going to do about your debt? Most credit scores will go up after filing bankruptcy, particularly in a Chapter 13.

You have a better chance of landing that job if you take action to fix your finances. Employers do not want harassment at work or income executions. Landlords want tenants who can use their salary to pay rent, not the Marshal or credit cards.

WRONG! Stop using the cards and stop paying them and see a consumer bankruptcy professional. Maxing out those cards will create more problems in your bankruptcy filing and may be bad faith. Bankruptcy is meant for the UNFORTUNATE but HONEST debtor.

WRONG! Your retirement funds are protected! And, you will be taxed and penalized on retirement withdrawals by the IRS! Don’t listen to those Cable Television Talkingheads who tell you to cash in your retirement!

NOT TRUE: Filing bankruptcy is NOT a crime and will NOT affect your Green Card or CITIZENSHIP!!

Bankruptcy filings are published in some newspapers since it is a matter of public record. Your real friends will understand, and who cares about anyone else. They aren’t in your shoes and don’t know what led to having to file Bankruptcy.

NO! If you pay the DMP and do not pay your creditors, you will be sued by the creditor. Most DMPs are being investigated by the Attorney General.

No. Bankruptcy allows a Fresh Start. You must list all of your debts. It is likely that the card will be closed anyway.

Most bankruptcy attorneys have payment plans. In Chapter 13, most of the fees can be paid through the plan payments. You are generally instructed to stop all credit card payments freeing up money for fees.

Studies show that bankruptcies are generally caused BY HEALTH PROBLEMS, EMPLOYMENT PROBLEMS, and MATRIMONIAL PROBLEMS.

In A Chapter 7 bankruptcy debts are wiped out with the exception of certain taxes, child support/alimony and student loans. In Chapter 13 you pay back debts that must be paid, such as certain taxes, mortgage arrears if you are keeping the house, or payments for vehicles on which you still owe money.

Contact us with any of your Bankruptcy questions. The initial consultation is free.

Law Office of Gregory A. Ross, PC
4245 Kemp Blvd., Ste 308
Wichita Falls, TX 76308
Telephone: (940) 692-7800
Facsimile: (940) 692-7813

March 25, 2011

Facing Foreclosure

Purchasing a home can be one of the most significant investments a person or family makes. After the sale is complete, there is often no one available to consult with when you experience financial troubles and face foreclosure. This article is designed to provide a basic introduction and description of the foreclosure process, the laws governing foreclosure, and possible options for those facing foreclosure.

What Are the Different Types of Foreclosures?

In Texas, the type of foreclosure process that is used by a lender depends on the type of debt that is owed. There are two general classes of foreclosure: a non-judicial foreclosure and a judicial foreclosure. A non-judicial foreclosure — performed without involving a court or judge — is used when the loan was used to purchase the home or to refinance the original purchase loan. A judicial foreclosure generally occurs when a government entity is seeking to collect taxes owed on the property. The government will file a lawsuit with the court seeking to have your property sold to pay for property taxes that are owed.

There is also a third type of foreclosure that combines parts of the non-judicial and judicial foreclosures and is used only for specific types of loans. If a homeowner has received a home equity loan or a loan that was used to pay property taxes, the lender must obtain a court order approving the foreclosure before performing a non-judicial foreclosure. After the lender provides the first notice and the homeowner does not pay the debt owed, the lender must file an application with the court requesting an order of foreclosure. The homeowner has 38 days to file a response to the foreclosure application. If a response is filed, the court will hold a hearing to determine whether the lender is entitled to foreclosure. If a foreclosure order is signed by the court, the lender will then be allowed to continue with a non-judicial foreclosure by providing the second notice, which is the Notice of Sale.

What Steps Are Involved in a Non-judicial Foreclosure?

Once a homeowner has missed a mortgage payment and is in default under the promissory note, the lender may attempt several unofficial steps to resolve the problem, such as collection calls, letters, acceptance of partial payments, or negotiating a temporary payment plan. Assuming that these efforts have not resolved the problem and the lender is ready to proceed with a nonjudicial
foreclosure, the following actions must be performed by the lender:

1) Notice of Default and Intent to Accelerate (the first notice);
2) Notice of Sale and Acceleration of Debt (the second notice);
3) Foreclosure Sale;
4) Distribution of Proceeds;
5) Eviction;
6) Deficiency Action; and
7) No Right of Redemption for Non-judicial Foreclosure.

What Options Are Available to Avoid a Non-judicial Foreclosure?

A foreclosure can be canceled, delayed, or avoided at any time prior to the sale at the courthouse. The best time to reach a resolution is during the 20-day period after receipt of the first notice. During this time, you are required to pay only the past due amounts and not the entire loan amount. If you believe that you will be able to gather the necessary funds to bring the loan current, it would be wise to contact the lender and keep them informed on your progress as they may be willing to extend the 20-day period if they believe that the matter can be resolved without further action. If you cannot pay the entire amount that is due, your lender may be willing to agree to a payment plan, loan modification, or other arrangement to bring the loan current and ensure that you will be able to make future payments. In certain situations, it is possible that your lender must consider modification if your home loan qualifies under new laws passed to provide relief from rising foreclosures, such as the Making Home Affordable plan and the Home Affordable Modification Program.

Deed in Lieu of Foreclosure

A deed in lieu of foreclosure involves a scenario where the homeowner voluntarily transfers ownership of the property to the lender. Deeds in lieu of foreclosure are quicker to complete, cost less money for the lender, and are more confidential than a public sale. However, this is usually only an option when ownership of the property is free and clear of mortgages, liens, and encumbrances. Homeowners will be left with the same final result as with a foreclosure — the loss of their residence.


The filing of a bankruptcy petition will immediately stop a foreclosure sale from occurring as of the filing of the petition. However, you will be required to continue making some type of regular payments and make some payments toward the delinquency as part of your bankruptcy plan. Filing for bankruptcy is a major event and should not be taken lightly or performed without careful consideration.

For assistance when facing foreclosure, please call the Law Office of Gregory A. Ross at 940-692-7800, or email us at

This article was excerpted from Facing Foreclosure, a brochure prepared as a public service by the Texas Young Lawyers Association and distributed by the State Bar. To obtain a complete copy of the pamphlet, write to the State Bar Public Information Department at P.O. Box 12487, Austin, 78711-2487; call (800) 204-2222, ext. 1800; or visit

March 24, 2011

Adoption Records in Texas Department of Family and Protective Services Cases

The Texas Department of Family and Protective Services (DFPS) Closed Adoption Records unit maintains adoption records for individuals who have been adopted through the Child Protective Services program. If Child Protective Services (CPS) or DFPS was involved in the adoption case, those records are kept by the agency. If an adoption was consummated through a private adoption placement agency, the records will be maintained either by that placement agency, or the Central Adoption Registry. If you are unsure of what agency placed you, please contact the Central Adoption Registry maintained by the Texas Department of State Health Services at 512-458-7388.

How Can I Get My Records?

In the State of Texas, adoption records are sealed by law. However, an adoptee can obtain a redacted copy of their adoption record. The redacted copy will have certain personal information deleted to ensure privacy of the involved individuals. In order to honor a request for closed adoption records the Texas Department of Family and Protective Services must have been involved in the placement and adoption of the adoptee.

To inquire if DFPS was involved in your adoption, please call 512-929-6675.

Agency case records of children and adults are only releasable to certain parties and not to the general public.

Depending on your relationship to a case, you may or may not be entitled to the information you are seeking. General guidelines for entitlement are provided by program below.

CPS records are confidential under Section 261.201(a) of the Texas Family Code. Most records will not be released unless there is a court order to release the records. Some individuals are entitled to a copy of the record or portions of the record without a court order, including the following:

• Parent or other legally responsible adult of the child who is the subject of the case,
• An adult who was, as a child, the subject of the case, including adoptions,
• A person alleged or designated to be the perpetrator in the case, or
• Other individuals identified under 40 Texas Administrative Code (TAC) 700.203.

DFPS must comply with all statutes and rules pertaining to confidentiality of CPS records.

March 10, 2011

Office Closed for Spring Break 2011

Filed under: Uncategorized — Tags: , , , — gregoryrosspc @ 10:52 am

The Law Office of Gregory A. Ross, PC will be closed from Monday, March 14th, to Friday, March 18th, 2011, for Spring Break.  However, we will periodically check voice mail, and return phone calls as needed.  If you need to reach us, please call (940) 692-7800.

February 25, 2011

Did You Know Past Due Child Support Can Keep You From Getting a Passport?

When someone owes child support of $2500 or more, they are put on a list that denies them the ability to obtain a passport. Once adequate arrangements are made for payment of the child support, they can be taken off the list. However, it can take several weeks before that happens.

You should contact the State Child Support Enforcement Agency in the state where you owe child support and make sure that they contacted the U.S. Department of Health and Human Services (HHS) to inform them that acceptable arrangements for payment had been made.

HHS takes your name off the list of those who are in arrears of child support. They send notice to the Department of State Passport Services which enables you to apply for a passport.United States Passport

February 14, 2011

What is a Deed of Trust?

A deed of trust is an arrangement among three parties: the borrower, the lender, and an impartial trustee. In exchange for a loan of money from the lender, the borrower places legal title to real property in the hands of the trustee who holds it for the benefit of the lender, named in the deed as the beneficiary. The borrower retains equitable title to, and possession of, the property.

The terms of the deed provide that the transfer of legal title to the trustee will be void on the timely payment of the debt. If the borrower defaults in the payment of the debt, the trustee is empowered by the deed to sell the property and pay the lender the proceeds to satisfy the debt. Any surplus will be returned to the borrower.

Deed of trust is a document which pledges real property to secure a loan, used instead of a mortgage in the following states; Alaska, Arizona, California, Colorado, Georgia, Idaho, Illinois, Mississippi, Missouri, Montana, North Carolina, Texas, Virginia, and West Virginia.

If you have any questions about deeds of trust, or real estate law, call the Law Office of Gregory A. Ross, PC at 940-692-7800, or email us at

What is an Owelty Deed or Lien?

An owelty of partition is an instrument used to allow one co-owner of property to buy the interest of the other co-owners while using 100% of the interests as collateral for a loan to acquire the property.  Common examples are in the situation of divorces, probates and division of co-owned assets by people who are not partners.

In Texas there are limited ways to create an encumbrance (a lien or mortgage) against real property that is a person’s homestead.  The most common ways to create such an encumbrance are for purchase money loans, or for home improvements loans.  And while home equity loans are allowed in Texas, equity loans can be made only up to 80% of the value of the real property.  These restrictions come into play when a person tries to buy out a co-owner of real property, and finance that purchase through a Lender.  While a purchase money lien or mortgage would attach to the interest being purchased, it would not attach to the interest the person already owns.  Most lenders would not want to loan money and accept a mortgage against anything other than 100% of the property.

That is where the owelty deed or owelty lien comes into play.  In 1995, the Texas Constitution was amended to specifically designate an owelty of partition as one of the permitted encumbrances on a Texas homestead.  For an owelty of partition to properly be ordered, the owners must be co-tenants.  If the court vests title in one party and divests the other, they are no longer co-tenants and no owelty of partition can be ordered.  A court-imposed lien does not extend to the interest already owned by the acquiring party.  Only an owelty lien can reach that interest.

If you have any questions about owelty of partition, or jointly owned real property, call the Law Office of Gregory A. Ross, PC at 940-692-7800, or email us at

February 10, 2011

IRS Form 1099-C: Discharged Debt is NOT Income

If you settle a debt for a certain amount of money, the amount you don’t have to pay is “forgiven.”  Using a really simple example, if you have a $10,000 debt, and you settle it for $5,000, the creditor has forgiven the remaining $5,000.

Creditors are known to file IRS Form 1099-C on that forgiven debt.  As I’ve mentioned here when discussing debt settlement, that forgiven amount can be considered income.  Tax liability on that amount is something to be considered in determining the affordability of a debt settlement.

If debts are discharged in bankruptcy, is that considered income?  No.

But if that’s the case, why am I hearing from reliable sources that debtors all over the country are receiving IRS Form 1099-Cs from former creditors?  What’s going on?  And what can YOU do about it?

It’s wise that you not ignore it.  Talk to your tax professional about filing Form 982 (Reduction of Tax Attributes Due to Discharge of Indebtedness), at least for the amount reported in the 1099-C.  I have seen that it can take up to a few years for the IRS to determine that you under reported your income because you did not include income from a 1099-C.  This form will report the essential facts to the IRS which will show that you are not responsible for the taxes on this “income.”

If you filed bankruptcy and received a Form 1099-C from a creditor, speak to your bankruptcy attorney.

While the creditor is allowed to file a 1099-C, they are required to make sure it is accurate, including indicating on the form that the debt was discharged in bankruptcy (see Box 6 of Form 1099-C, and IRS instructions).  Even so, debtors will find it unsettling – even more so if they receive inquiry from the IRS next year, or the year after requesting an explanation as to what might be perceived as under-reported income.

Since it’s tax time, it’s important that I at least sound the alarm that something may not be right with creditors issuing IRS form 1099-Cs.  If you’re in chapter 13 or if you have received a discharge, make sure you’re not getting a 1099-C that you do not deserve, and if you do be proactive to avoid problems down the road.

January 23, 2011

Financial Peace University

“More than one million families have attended Financial Peace University with amazing results. On average, these families paid off $5,300 in debt and saved $2,700 in just the first 90 days! Stop worrying about money, and start your journey to Financial Peace today.”  Taken from Financial Peace University,

Years ago I discovered Financial Peace University (FPU) and can honestly say it made a significant difference in my financial life.  While I sometimes stray from the ideas taught in this course, overall its teachings guide my financial planning.  I would encourage you to look into this program.  The instructor, Dave Ramsey, is entertaining as well as passionate about  FPU. The course teaches on the following subjects:

  • Super Saving – How and why to save money
  • Relation with Money – How to communicate with your partner about money
  • Cash Flow Planning – Developing a monthly budget that works
  • Dumping Debt – Tools to eliminate debt in your life
  • Credit Sharks in Suits – Credit scores and how to deal with debt collectors
  • Buyer Beware – Marketing and its effects on you
  • Clause and Effect – Understanding the world of insurance
  • That’s Not Good enough – Understanding the power of purchasing with cash
  • Of Mice and Mutual Funds – Understanding the jargon surrounding investing
  • From Fruition to Tuition – Retirement/college planning
  • Working in Your Strengths – Finding that right job
  • Real Estate and Mortgages – Understanding the largest investment most will make
  • The Great Misunderstanding – How generous giving can change your life

I have no connection with and make no money from this course.  I simply think it is the best course out there.  If you’ve ever struggled with finances, please consider Financial Peace University.

December 13, 2010

Do You Know the Difference Between an Heir and a Beneficiary?

Filed under: Probate — Tags: , , , , — gregoryrosspc @ 4:09 pm

The term heir is used within a last will and testament and trusts to designate family members entitled to inheritance property. When decedents do not execute a Will or transfer property to a trust their estate is deemed ‘intestate’ and must be settled according to state probate law.

Direct lineage heir refers to blood relatives such as parents, siblings, and children, as well as the decedent’s spouse. Heirs can also include cousins, aunts and uncles. Individuals who are not directly related to the decedent are referred to as beneficiaries.

Decedents can bequeath inheritance property to whomever they desire. If the estate is considered intestate, property normally transfers only to direct lineage heirs. If a Will or trust is in place, property is gifted according to directives provided in the document.

Heirs can be named as beneficiaries on bank accounts, life insurance policies, financial portfolios, retirement accounts, and certain types of titled property such as real estate. Although somewhat confusing, heirs can be beneficiaries, but beneficiaries are not always heirs.

The last will and testament is one of the most important elements of estate planning. Wills are used to bequeath property, appoint an estate administrator, establish guardianship for minor children, and provide directives regarding burial preferences. Wills are also an important element of establishing a trust. Without a Will, distribution of assets is determined by state probate law.

Unless a trust is established, all estates must undergo the probate process. Probate is required to settle outstanding debts, transfer property to heirs and beneficiaries, notify government entities regarding the decedent’s death, pay estate taxes, and file a final tax return.

Estates with a valid Will are referred to as ‘testate’ estates. Those without a Will are ‘intestate’ estates. Testate estates normally pass through probate more quickly than intestate estates. The time required to settle probate estates depends on the type of inheritance property involved, court caseload, and family dynamics.

If heirs agree to the terms of the Will, the probate process can usually be completed within a few months. The average time-frame to settle intestate estates is 6 to 9 months. If claims are submitted against the estate, probate can be prolonged for several months. When family members disagree over distribution of assets or if an heir contests the Will, probate can be suspended for a year or longer.

Wills can also be used to disinherit a direct lineage heir. While most people do not want to write a person out of their Will, there are instances that warrant this decision. It is best to work with a probate attorney to ensure the disinheritance clause is compliant with state law and to minimize the potential for the disinherited heir to contest the Will.

When a Will is contested, the probate process is prolonged as the court determines who is rightfully entitled to inheritance property. Contesting a Will can be very detrimental to the estate; particularly if estate value is less than $100,000.

Strategies exist which can minimize the time required to settle estates. It is best to work with a professional estate planner to ensure property is protected and to ease transfer of inheritance assets.

Beneficiaries can be assigned to checking and savings accounts by filling out ‘Payable on Death’ forms where funds are held. Account holders can bequeath funds to as many beneficiaries as they desire. Heirs cannot access bank accounts until they present the death certificate, photo I.D, and validated ‘date of death’ forms provided by the estate executor.

Beneficiaries can also be assigned to financial portfolios and retirement accounts by assigning ‘Transfer on Death’ beneficiaries. Heirs can elect to transfer accounts into their own name to avoid inheritance tax, or accept lump sum cash which may be subject to taxation.

Titled property can be gifted to heirs by assigning beneficiaries via the property title. Each state has different requirements for bequeathing titled property. Some require obtaining a joint title, while others allow designation of beneficiaries. To ensure property is distributed according to your wishes, consult with a probate lawyer or estate planner to determine proper protocol.

Engaging in estate planning is one of the greatest gifts anyone can leave their loved ones. It is important to update Wills when major changes occur. These might include opening or closing a business; buying or selling real estate; or when a designated heir dies or an heir is born.

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