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Struggling with Debt? What You Should Know to Avoid Making Things Worse…

Good people find themselves deep in debt for a lot of reasons:  Job loss, health issues, and divorce are common reasons for overwhelming debt.   Our attorneys see people try all kinds of ways to try to stay ahead.  Here are some things that you should NEVER do!

Do not take out a second home mortgage to pay debts.  This transfers unsecured debts to the secure debt attached to your home. If you cannot make these payments the creditor will foreclose on your home. It is possible to protect your home bankruptcy, if you can stay current on your mortgage.

Do not pay debts using your retirement savings account.  Retirement accounts are protected through a bankruptcy filing.

Do not max out your credit cards to stay afloat.  Recently incurred charges may not be able to be discharged through a bankruptcy filing.

Do not transfer your home to another person to avoid having a lien placed on your property.  If you do this you will not be able to file for at least 4 years and this could be considered fraud in the eyes of the court.

Bankruptcy is not the end of the world, just because you have fallen into a bad financial situation does not mean that you are a bad person.  There are hundreds of thousands of bankruptcy filings in the United States each and every year.

Here are some thoughts of things to do when filing for bankruptcy.

Do consider this decision very carefully.  Are you really in so far over your head that bankruptcy is the only way out.  Under Chapter 7 you will only be able to receive a discharge every 8 years.  There are other options if you have filed within the last 8 years and are struggling, contact us for a free consultation.

Do follow the advice of your attorney.  At our office we have over 50 years of combined experience and will be able to guide you to make sure your bankruptcy is as painless as possible.

Do be honest in all of your answers on the petition.  Be sure to list all assets and not leave anything out.

Do be sure to list all of your creditors on your petition.

Do close any bank accounts you have any credit lines or credit cards associated with.  This will prevent the account from being seized by the creditor.

Bankruptcy is a serious decision and one that should not be taken lightly.  Contact our office for your free consultation to discuss your individual situation to see if bankruptcy is the right decision for you.

 

 

BANKRUPTCY CH 7 VS. CH 13

 

For most, once they decide to file bankruptcy the decision comes down to which Chapter they will be filing.  Both chapters are beneficial in their own way.  Many factors play into which chapter you will file.  Your income and assets are the main considerations.  Many prefer to Chapter 7 but may not qualify.

BANKRUPTCY TIMELINE

In Ohio, a typical Chapter 7 bankruptcy lasts about six months from the day you file until you receive your discharge.  Your court date is called a “341 Meeting of the Creditors” and will be four to six weeks out from your filing date.  For Chapter 13 you will also have a 341 Meeting of Creditors about four to six weeks after your filing date.  Once you file for Chapter 13 expect to be in the case for a period of three to five years.  Once your complete your Chapter 13 you will receive your discharge.

PAY BACK OF DEBTS

In bankruptcy debt is classified in two groups.  Your unsecured debts (credit cards, medical debts, loans) and your secured debts (houses, cars, anything secured by collateral). There is also a sub-category of unsecured loans which are called priority debts, student loans and tax debts fall into this category.  If you file for Chapter 7 you will be able to discharge all of your unsecured debts and not have to pay anything back.  Most unsecured debts can be discharged but student loans and most taxes will survive the case.  Any secure debts that you would want to keep (such as your home or vehicle) you would continue to make your payments on and sign a reaffirmation agreement within the case. Chapter 13 is a re-payment plan.  Under this re-payment plan you will pay all of your debts with a single payment to the Chapter 13 Trustee once a month.  Out of this payment the trustee may make your regular house payment and catch up outstanding back payments on your home.  If there is a vehicle payment involved this will also be made by the trustee. You will pay back a percentage of your unsecured debts.  This percentage is based on several factors and can range from 1 percent to 100 percent.  The debts will be paid in order of priority.  So basically in a Chapter 13 you have one payment a month to the Chapter 13 office and your utilities to pay during the duration of the case.

ASSETS

One big benefit of Chapter 13 is you will not have to worry about losing any of your assets in the case.  You keep all of your assets that you wish to keep.  In a Chapter 7, is also referred to as a liquidation bankruptcy because the trustee may take some of your assets and liquidate them to gain funds to pay your creditors.  However, most people do not have to worry about asset liquidation because in Ohio the high exemptions can be protect most assets.

In regard to your home, if you want to qualify for a Chapter 7 you must be current on your mortgage payment to keep your home.  If you file Chapter 7 and are not current on your home the lien holder will require that you get current or they may file for Relief from Stay which once granted they can begin the process of foreclosure.

Chapter 13 is designed to help you save your home if you are behind on your payments.  Under Chapter 13 you will have the three to five year period to make up your missed payments through the case.  The trustee will also make your regular house payment and at the end of the case the trustee will certify that all payments are current.

 

BANKRUPTCY- AN EXPERIENCED LAWYER GETS THE BEST RESULT

 

ARE YOU THINKING OF FILING FOR BANKRUPTCY

Thinking of filing for bankruptcy?  Are you looking for an attorney to represent you through the process?  Calling around to get a fee?  Looking for the lowest fee around?  Just remember that you get what you pay for.  Bankruptcy is a very specific process and must be done correctly so that your case will go through and you will receive your discharge through your case. Some believe that bankruptcy is simple, so simple that they can even take care of it themselves.  This may have been the case in the past, but since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 things are much more difficult and more precise.  It is not recommended that you attack this task on your own.

The decision to seek an attorney to help you through the process is the best one.  You will want to find an experienced attorney who’s practice has a focus on bankruptcy.

OUR LAW OFFICE IS EXPERIENCED

At the Keegan & Co. Attorneys, LLC our main focus of practice is bankruptcy. Our office has assisted people of Greater Cincinnati get relief from debt through bankruptcy since 1992.  We provide the expertise necessary to make your bankruptcy seem simple. Before you know it,  you will be on with your debt free life.

FREE CONSULTATION

Our office offers a free consultation. Here you will to sit down and discuss your individual situation with an experienced attorney who can advise you of the available options to resolve your debt.  Sometimes bankruptcy is the answer and sometimes it may not be the best decision.  The attorney will advise what is best for you.

At this free consultation the attorney will quote you a fee. We will accept monthly payments until your case is filed.

BANKRUPTCY AND YOUR RETIREMENT ACCOUNT

SHOULD I CASH IN MY RETIREMENT TO PAY MY DEBT?

The straight up answer here is NO!  Bad idea!  You have worked hard and saved for retirement for your whole life.  Your retirement is just for that, your retirement.  Most likely you are currently employed which provides funds for your needs just as your retirement funds will provide for your needs in the future.  If you are already retired then you need these funds now, these are your funds to provide for your needs, you need these funds, do not cash them in to pay debts.

Bankruptcy may be available for you.   Under the federal code your retirement funds are protected.  You can file for bankruptcy protection and keep your retirement accounts for when they will be needed..when you retire.

WHAT IS BANKRUPTCY?

A federal code set up which will allow a debtor to discharge all of their unsecured debts.  Once a discharge is issued creditors can no longer collect on debts included in the bankruptcy.  You do not have to pay any of these debts and you do not need to report the filing to the IRS as income.  There are two main chapters filed by most consumers which are Chapter 7 and Chapter 13.

CHAPTER 7 

Chapter 7 is the most common bankruptcy filing.  It goes by many names, Chapter 7, straight bankruptcy, simple bankruptcy, liquidation bankruptcy and so forth.  In a Chapter 7 you discharge all of your unsecured debts.  If you have secured items you would like to keep such as a home or vehicle you will be able to reaffirm on these debts through your case.  Chapter 7 is sometimes referred to as a liquidation bankruptcy because the trustee in a case may liquidate some of your assets, however, most assets are protected under the state exemption levels.

CHAPTER 13

Chapter 13 is designed for those who are over income for Chapter 7 or who are behind on their homes or vehicles.  Chapter 13 is a repayment plan.  Under Chapter 13 you will have three to five years to make up payments you are behind on your home or vehicle.  The trustee will make these payments for your.  You will pay back a percentage of your debts to your unsecured creditors.  You will receive a discharge at the end of your case.

MORE INFORMATION

For more information call us at 513-752-3900 to schedule a no obligation, free consulation with an experienced attorney.  Since 1997,  Keegan and Company Attorneys has helped thousands of people of the Cincinnati area get well deserved financial relief and asset protection. We are here and available to help you!