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BANKRUPTCY AND YOUR RETIREMENT ACCOUNT

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SHOULD I CASH IN MY RETIREMENT TO PAY MY DEBT?

The answer is NO!  Almost always s bad idea!  You have worked hard and saved for retirement.  Your retirement is just for that, your retirement.  Most likely your current employer provides funds for retirement.  If you are already retired then you need these funds now, do not cash them in to pay debts.

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

WHAT IS BANKRUPTCY?

A federal law set up which will allow you to discharge all of your 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 – 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 wipe-out 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 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 3 to 5 years to make up payments on your home or vehicle.   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 consultation with an experienced attorney.  Since 1992,  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!

CHAPTER 13 BANKRUPTCY BASICS

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WHAT IS CHAPTER 13 BANKRUPTCY

Chapter 13 is designed for people who are behind on their mortgage payments who would like to save their home or their income is too high to qualify for Chapter 7.   Chapter 13 involves paying your disposable income to creditors over a 3 to 5 year period.  During this time you will make up any missed mortgage or vehicle payments.  Your unsecured creditors will be paid a percentage of what you owe them. Once you complete your case any remaining balance to unsecured creditors will be wiped out.  Creditors will not be able to collect on these debts in any way or form.  They will not be allowed to contact you by phone, mail or any other means.

WHAT IS DISPOSABLE INCOME?

To determine your disposable income we will need to know your income for the last six months.  We would then need to subtract your expenses from your income.  This includes all of your expenses such as food, rent or mortgage, vehicle payments, utilities, prescription drugs, car repairs, home maintenance or medical expenses.  We consider expenses you may not currently be spending on but it would be reasonable to do so such as health insurance, life insurance, or a retirement account.  If you have expenses not mentioned here we can count them so long as it is reasonable and necessary.  The difference between your present income and reasonable expenses is your disposable income.

WE WILL BE THERE FOR YOU

At your court hearing the trustee will evaluate the reasonableness of your expenses.  Our job as your attorney is to protect the money that is necessary for you to take care of yourself and family.

HOW MUCH WILL MY CHAPTER 13 PAYMENT BE?

 Your plan payment must will pay your mortgage arrearage over the next three years, your current mortgage payment (the 13 office would make your regular mortgage payment through the case),  your vehicle payment and a some amount for your unsecured creditors.

FREE CONSULATION

Every situation is unique.  We offer a free consultation with one of our attorneys to discuss your situation.  Your attorney will give you an approximate amount of  your Chapter 13 payment.

BANKRUPTCY & GARNISHMENTS

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OUR OFFICE CAN STOP WAGE GARNISHMENTS. CALL 513-752-3900 TO SCHEDULE YOUR FREE CONSULTATION

Once a creditor obtains a judgement against you they can garnish your wages. In the state of Ohio a garnishment can take 25% of your pay BEFORE TAXES.

You can stop a garnishment by filing bankruptcy.  Once you file for bankruptcy an “automatic stay” goes into effect which prohibits further and stops all current collection efforts by creditors.  If the garnishment continues after the case is filed all funds must be returned to you.  Once you receive your bankruptcy discharge the debt is wiped clean and cannot be collected upon.

The “automatic stay” does not apply to domestic support obligations, such as child support or alimony.  These are considered priority debts that are unaffected by the automatic stay and cannot be discharged through bankruptcy.

When you file bankruptcy you are required to list all your creditors so they can be notified of the bankruptcy.  However, there is a chance that creditors may not be alerted in time to put a stop on the garnishment after they case is filed. In this case, any funds that are garnished after the bankruptcy filing will be returned to you.

If you are struggling with debt or a wage garnishment you should immediately contact our office for a free consultation.  At Keegan & Company, you meet with an experienced attorney (not a paralegal or secretary) to discuss your individual situation.  We have free consultations, fair fees and monthly payment plans.

Contact Keegan & Company Attorneys for help today.

BANKRUPTCY IS YOUR RIGHT AND PROTECTED BY THE CONSITUTION

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The office of Keegan & Company Attorneys has been in practice for over 30 years.

Bankruptcy is specifically set forth in the United States Constitution.  The United States Constitution states “The Congress shall have Power to establish….uniform laws on the subject of bankruptcies through out the United States.”  Bankruptcy is a constitutional right.

Our founders wanted to ensure that there would be a uniform system of bankruptcy so that one state would not put someone in debtor’s prison for a debt that was discharged in another state. James Madison, in Federalist Paper No. 42, wrote about how important uniform bankruptcy laws would be for the regulation of commerce in the United States.  In this article the power to pass and regulate bankruptcy was mentioned in the same paragraph as the power to issue currency and regulate the use of foreign currency.

The United States Congress passed the first bankruptcy law in 1800. That law lasted until 1803.  The next bankruptcy law was not passed until 1841, which also had a short life, lasting only until 1843.  After the civil war, Congress passed a bankruptcy act with a little more longevity, lasting from 1867 to 1878.  Congress finally passed a permanent bankruptcy law in 1898, which remained in place for the next eighty years.  The current structure of bankruptcy laws was enacted in 1978. In 1984, 1986, 1994 and 2005, the bankruptcy act was revised, but the basic structure remained in effect.  The 2005 act added the means test, limits on restructuring vehicle loans and a credit counseling requirement.

Bankruptcy can help you get a fresh financial start.  It is designed to discharge all of your unsecured debts.

At our office we offer a free consultation  with one of our attorneys to discuss your individual situation.

Call us at 513-752-3900 to schedule your free consultation. We offer 2 convenient locations: Eastgate & Middletown. Easy Parking. Fair Fees. Caring and Knowledgeable Attorneys.