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BANKRUPTCY AND YOUR RETIREMENT ACCOUNT

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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!

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 three to five year period.  During this time you will be able to 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 and receive your discharge the remaining balance will be deemed discharged through the case.  This means that 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.  If you have had a pay cut or loss of overtime hours we can reduce your current income for these situations, same if you are making more money at the time we would have to increase your current income.  We would then need to subtract your expenses from your income.  This includes all of your expenses required to take care of your family such as food, rent or mortgage,vehicle payments, utilities and other such needs.  Then we consider things that you know you will be spending such as car repairs, home maintenance or medical expenses.  Then we need to look at things you may not be spending money on but it would be in your best interest to do so such as health insurance, life insurance or maybe a retirement savings account.  If you have expenses not mentioned that doesn’t mean we can’t count it as long as it is reasonable and necessary.  Once all of these expenses are counted they get deducted from your income and the remainder is an idea of your disposable income.

WE WILL BE THERE FOR YOU

It is not a good idea to try to file a Chapter 13on your own. At your court hearing the trustee will evaluate the reasonableness of your expenses and will try to cut them down to use the money to pay your creditors.  Our job as your attorney is to protect the money that is necessary for you to take care of yourself and your family.  This is why we sit down with you and go over your unique situation and expenses with you thoroughly before the case is filed.

HOW MUCH WILL MY CHAPTER 13 PAYMENT BE?

Your Chapter 13 payments must be enough to cover certain required payments.  Your plan payment must be enough to pay for your mortgage arrears over the next five years, your current mortgage payment (as the 13 office would make your regular mortgage payment through the case), if you have a vehicle payment this will be included and a small amount for your unsecured creditors.

FREE CONSULATION

Every situation is unique.  We offer a free consultation where you will be able to sit down with one of our attorney and discuss your situation.  The attorney will be able to give you an approximate amount of what your Chapter 13 payment would be at this free consultation.  They would also quote you a fee.

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 will be able to garnish your wages. In the state of Ohio a garnishment can take 25% of your pay BEFORE TAXES and that’s a pretty good chunk!

You can stop garnishment by filing for bankruptcy protection.  Once you file for bankruptcy the automatic stay goes into effect which prohibits and stops all collection efforts by creditors.  Wage garnishments are stopped as long as the stay is in effect.  If the garnishment continues after the case is filed all funds must be returned to you.  If for some reason the creditor wants to continue the garnishment they must request relief from stay from the court and this will only be granted if the creditor has a valid reason for doing so.  An unsecured creditor such as a credit card or hospital simply wishing to resume a wage garnishment is not a valid reason for the court to lift the stay.

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 until the garnishment is released 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 sit down with one of our experienced attorneys to discuss your individual situation.  We offer the free consultation, 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 nearly 30 years.

Bankruptcy is specifically mentioned 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.”  This means bankruptcy is constitutional.

The 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.  However, that law only 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 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 the 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 where you can sit down with one of our attorneys and discuss your individual situation.

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