Collection agencies adding interest to debt

Some of my debts have now been turned over to a collection agency. Can the collection agency add interest to my debt?

Naveen J.
Round Rock, TX

Yes, the collection agency can add interest to your debt. The Federal Debt Collection Practices Act allows a collector to add interest if your original agreement calls for the addition of interest during collection proceedings or the addition of such interest is allowed under state law. Every state authorizes the collection of such interest.

Chapter 7 vs. Chapter 13 vs. Chapter 11 bankruptcy

What is the difference between Chapter 7, Chapter 11 and Chapter 13 bankruptcy?

Karyn A.
Austin, TX

They refer to different parts, called chapters, of the bankruptcy law. Individuals may use Chapter 7 or Chapter 13. Chapter 7 bankruptcy gives you a fresh start by discharging your unsecured debts (such as credit cards and medical bills). It is sometimes called liquidation. Businesses may used Chapter 7 bankruptcy to liquidate or Chapter 11 bankruptcy to reorganize their business and repay their debts over a period of years under a "plan." Business that want to continue as going concerns must use Chapter 11 bankruptcy.

Do-it-yourself will kits vs. hiring an estate planning lawyer

My husband and I are about to have our first child and we'd like to get a will. Why shouldn't we just use one of those do-it-yourself kits?

Anne P.
Round Rock, TX

The form kits for wills, living wills, etc. are very simple. If your situation is simple that may work (e.g. you are single, have no kids, don't have a lot of assets, don't have any special needs or disabilities, etc.) But if your situation is even slightly complex, it's important to have a will or living will crafted to fit your situation.

Keep in mind that when you consult with a lawyer, what you are paying for is not the form used, but the personalized advice and counseling that goes along with it. I'll give you an example of something a good lawyer might point out during an estate planning meeting:

If you have minor children or may have children any time soon, you should include a testamentary trust to hold any assets they inherit if you and your spouse both die. This avoids having to run their assets through the Probate Court which is time consuming and expensive. It also allows you to control things like:

• Who serves as trustee for your children
  
• How much is paid per month to the family who raises them
  
• The age at which your children get free reign over all of their inheritance
  
• The purposes for which the principal balance of their inheritance may be pulled out early (college tuition or medical needs, for example)

This is just one example and, as you can see, this sort of legal and estate planning advice goes beyond what you'd find in a do-it-yourself will kit.

Getting divorced in Austin after a move

I just moved to Austin from North Carolina and my wife and I have decided to get divorced. Can I get divorced in Austin?

Alan P.
Austin, TX

Before you can file for divorce in Austin, either you or your spouse must have lived in Texas for six months and in Travis County for the preceding 90 days.

Buying a house after bankruptcy

My wife and I were planning on buying our first house within the next couple of years, but now it looks like we're going to have to file bankruptcy soon. Will that prevent us from ever being able to get a house?

Aaron T.
Austin, TX

Assuming that you're in decent financial shape after filing bankruptcy you should be able to get a house fairly soon. Two years after a person files bankruptcy he or she is eligible for mortgage loans on the same terms as if they had not filed bankruptcy. And even before two years are up, the amount of your down payment and the stability of your income and your credit history after bankruptcy are generally more important than the fact you filed bankruptcy in the past.

Getting legally separated

I want to get legally separated from my husband. Should I go through a lawyer to do that or can I just do it myself?

Brenda L.
Cedar Park, TX

You don't need a lawyer for that because Texas doesn't recognize legal separation. Texas only recognizes divorces. But you could execute a post-nuptial agreement to divide property prior to divorce, in which case you would want to contact an attorney.

Welcome

Welcome to the Austin Lawyer Blog, a service of Fulwiler Law, P.C. We started this site to help people in Austin and the surrounding communities educate themselves about general legal concepts.

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