New numbers detail the extent of bankruptcy filings in the last year. According to the Administrative Office of the U.S. Courts, the number of non-business bankruptcy filings in the 12 month period ending September 30, 2011, were as follows:
Chapter 7: 1,001,813
Chapter 13: 413,699
Chapter 11: 1,811
Breaking down the numbers even further, the National Bankruptcy Research Center and Professor Ronald Mann, of the Columbia Law School, found that the top states in total number of filings were:
1. Nevada
2. Georgia
3. Utah
4. Tennessee
5. California
They further went on to analyze filings by county and found that the top five filing counties were the following:
1. Shelby County, TN (Memphis)
2. Riverside County, CA (Riverside)
3. DeKalb County, GA (Decatur/Atlanta)
4. Clark County, NV (Las Vegas)
5. San Bernardino County, CA (San Bernardino)
Interestingly enough, they've also found that the top 10 counties so far in 2012 are all located Georgia and Tennessee.
Filing bankruptcy can be complicated and confusing. For more information on Chapter 7 and Chapter 13, or for a free consultation, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
Showing posts with label chapter 7. Show all posts
Showing posts with label chapter 7. Show all posts
Wednesday, April 18, 2012
Sunday, March 18, 2012
The Myth of Medical Bills in Bankruptcy
One surprising myth that seems to persist is that medical bills are not dischargeable in bankruptcy. Although the origin of this myth is uncertain, it's one that I hear repeated by people who come into my office. The easy response is that, of course, medical bills are dischargeable.
Medical bills are one of the main reasons that people seek bankruptcy protection. In fact, a report issued by the American Journal of Medicine estimated that over 60% of people in bankruptcy were there solely due to medical bills. Just last year, the Kaiser Commission on Medicaid and the Uninsured issued a report that estimated the number of uninsured Americans had reach 50 million. Many people who are uninsured (or underinsured) can suddenly find themselves with tens of thousands of dollars in medical bills due to an accident or illness. And most of those who cannot afford insurance have no ability to ever re-pay what is owed.
One of the problems with the persistance of this myth is that some people who might be otherwise best advised to seek bankruptcy protection may not seek the help that they need. It is always best to seek the advice of an experienced bankruptcy attorney to review your situation and see if bankruptcy is the right answer.
Filing bankruptcy can be complicated and confusing. For more information on Chapter 7 and Chapter 13, or for a free consultation, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
Medical bills are one of the main reasons that people seek bankruptcy protection. In fact, a report issued by the American Journal of Medicine estimated that over 60% of people in bankruptcy were there solely due to medical bills. Just last year, the Kaiser Commission on Medicaid and the Uninsured issued a report that estimated the number of uninsured Americans had reach 50 million. Many people who are uninsured (or underinsured) can suddenly find themselves with tens of thousands of dollars in medical bills due to an accident or illness. And most of those who cannot afford insurance have no ability to ever re-pay what is owed.
One of the problems with the persistance of this myth is that some people who might be otherwise best advised to seek bankruptcy protection may not seek the help that they need. It is always best to seek the advice of an experienced bankruptcy attorney to review your situation and see if bankruptcy is the right answer.
Filing bankruptcy can be complicated and confusing. For more information on Chapter 7 and Chapter 13, or for a free consultation, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
Monday, February 21, 2011
Need to Get A New Car? You Might Want To Do It Before Filing For Bankruptcy
A question clients frequently ask me involves the timing of buying a vehicle when filing for bankruptcy. The question of whether it's better to buy a vehicle before filing for bankruptcy or after filing is a good one.
If you're filing a Chapter 7 bankruptcy, there can be a few advantage to buying before you file. First, you may have a lower interest rate. After filing, you'll be able to get a car loan easily, but the interest rate is likely to be around 25%. Sometimes clients will actually have decent credit scores before filing that may allow them to get lower interest rates. Even a few percentage points can make a big difference over the life of the loan.
Second, many clients of mine find themselves in the unfortunate position of having to buy a vehicle at a "buy here, pay here" lot. These dealerships specialize in catering to low-income or bad-credit customers. As such, many of the cars are low quality and unreliable. The prices are inflated and the interest rates are exorbitant. If you buy the vehicle before filing your case, it is a pre-petition debt and is dischargeable. Of course, if you want to keep the vehicle you'll most likely have to sign a Reaffirmation Agreement that still makes you liable on the loan, but it gives you some time to evaluate the vehicle before being stuck with it. This is because you can rescind the Reaffirmation Agreement until you receive your discharge. If you do, you can return the vehicle without being responsible on the loan anymore. Because the average Chapter 7 case lasts about four months from filing to discharge, you can keep it and use the pendency of your case more or less as an "evaluation period". If you purchase the vehicle after your case is filed, it is a post-petition date. If something happens to it or it's repossessed, your out of luck and you're still liable on the car loan.
On the down side, if you purchase a vehicle before your case is filed and you have too much equity in the vehicle, your case trustee may seek to seize the vehicle and sell it. Also, if someone is going to be giving you a vehicle outright, it may be best not to title the vehicle in your name until after your case is filed, depending on the value of the vehicle and your available bankruptcy exemptions. The Ohio bankruptcy exemption for equity in a vehicle is currently $3,450.
Within the context of a Chapter 13 bankruptcy, there are also advantage to purchasing a vehicle before your case is filed. Because it is a pre-petition debt, you can include it in your Chapter 13 bankruptcy at (most likely) a reduced interest rate, currently 5.25%. If you choose to purchase a vehicle after the filing of your case, you'll need to first talk to your attorney. This is because you need to get court permission to incur any significant debt after your Chapter 13 is filed. This usually involves filing a motion with the bankruptcy court. The court can also require you to get multiple competing bids and may deny your motion if it is not satisfied with the vehicle you are trying to obtain. It can be a time-consuming and burdensome (although sometimes unavoidable) process.
The pitfalls with getting a vehicle before your Chapter 13 are similar to those involved in a Chapter 7. Although your Chapter 13 trustee won't take the vehicle, the excess equity in the vehicle may mean that you end up paying more through your Chapter 13 plan to your creditors. As always, it's best to discuss these issues with a qualified bankruptcy attorney before filing your case.
I'm an experienced Canton bankruptcy attorney who's filed or managed over 1,000 cases. For more information on Chapter 7 and Chapter 13, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
If you're filing a Chapter 7 bankruptcy, there can be a few advantage to buying before you file. First, you may have a lower interest rate. After filing, you'll be able to get a car loan easily, but the interest rate is likely to be around 25%. Sometimes clients will actually have decent credit scores before filing that may allow them to get lower interest rates. Even a few percentage points can make a big difference over the life of the loan.
Second, many clients of mine find themselves in the unfortunate position of having to buy a vehicle at a "buy here, pay here" lot. These dealerships specialize in catering to low-income or bad-credit customers. As such, many of the cars are low quality and unreliable. The prices are inflated and the interest rates are exorbitant. If you buy the vehicle before filing your case, it is a pre-petition debt and is dischargeable. Of course, if you want to keep the vehicle you'll most likely have to sign a Reaffirmation Agreement that still makes you liable on the loan, but it gives you some time to evaluate the vehicle before being stuck with it. This is because you can rescind the Reaffirmation Agreement until you receive your discharge. If you do, you can return the vehicle without being responsible on the loan anymore. Because the average Chapter 7 case lasts about four months from filing to discharge, you can keep it and use the pendency of your case more or less as an "evaluation period". If you purchase the vehicle after your case is filed, it is a post-petition date. If something happens to it or it's repossessed, your out of luck and you're still liable on the car loan.
On the down side, if you purchase a vehicle before your case is filed and you have too much equity in the vehicle, your case trustee may seek to seize the vehicle and sell it. Also, if someone is going to be giving you a vehicle outright, it may be best not to title the vehicle in your name until after your case is filed, depending on the value of the vehicle and your available bankruptcy exemptions. The Ohio bankruptcy exemption for equity in a vehicle is currently $3,450.
Within the context of a Chapter 13 bankruptcy, there are also advantage to purchasing a vehicle before your case is filed. Because it is a pre-petition debt, you can include it in your Chapter 13 bankruptcy at (most likely) a reduced interest rate, currently 5.25%. If you choose to purchase a vehicle after the filing of your case, you'll need to first talk to your attorney. This is because you need to get court permission to incur any significant debt after your Chapter 13 is filed. This usually involves filing a motion with the bankruptcy court. The court can also require you to get multiple competing bids and may deny your motion if it is not satisfied with the vehicle you are trying to obtain. It can be a time-consuming and burdensome (although sometimes unavoidable) process.
The pitfalls with getting a vehicle before your Chapter 13 are similar to those involved in a Chapter 7. Although your Chapter 13 trustee won't take the vehicle, the excess equity in the vehicle may mean that you end up paying more through your Chapter 13 plan to your creditors. As always, it's best to discuss these issues with a qualified bankruptcy attorney before filing your case.
I'm an experienced Canton bankruptcy attorney who's filed or managed over 1,000 cases. For more information on Chapter 7 and Chapter 13, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
Sunday, November 14, 2010
Why Not Use A "Debt Settlement Company" And Avoid Bankruptcy?
If you believe that "debt settlement companies" and "debt negotiation companies" are interested in helping you out and are looking out for your best interests, then perhaps you've considered investing in unicorn farms as well. Know who may be your best friend in paying your debts? Your bankruptcy attorney.
The fact is that debt settlement companies have bills to pay too. Some are not-for-profit and some are. But one way or the other, they have employees to pay. So how do they make their money? If a company is not-for-profit, then they are getting their funding from credit card companies. If they don't charge you a fee, then they have to be receiving their funding from somewhere. If they're funded by credit card companies, do you think they're going to do what's in YOUR best interest?
Other companies will charge you a fee for their services. If you use them, you'll find yourself in a situation where you're not only trying to pay your debts (with interest), but you're paying exorbitant fees to this debt settlement company too. And the fact is that many of them do not properly account for the money they receive from their "clients". They may pay your creditors slowly or not at all. And when the creditors don't get paid, who do you think they're going to start coming after? (Hint: the answer is "YOU"). Other companies have a system whereby they hold onto your money until there is enough on hand to pay off one creditor. Does this make sense to anyone? I can tell you that the other creditors will not sit by and patiently wait in line to get paid. Not to mention that many of these companies are just plain shady. Ever hear of Ameridebt? The were one of the largest companies out there "helping" consumers. That is until the Federal Trade Commission shut them down. Guess they weren't so helpful after all.
Almost weekly I have clients come in who are getting sued while working in one of these programs. This is usually the tipping point when they decide that, despite their best efforts, it's time to go in another direction. Unfortunately, some of them have wasted thousands of dollars trying to make arrangements that eventually fail. It's understandable that people want to pay their bills. But you have to understand that you ABSOLUTELY WILL NOT get honest information from these companies. No matter what your situation, they will try to sell you on a plan that is "doable". Chances are, however, that the only thing it will do it fatten their wallets at your expense.
So what to do? If you're thinking about dealing with one of these companies, talk to a bankruptcy attorney FIRST! Sound backwards? Actually, it's the smartest thing you can do. Any good bankruptcy attorney will present you with all of your options and honestly evaluate your situation. Many times, I've advised potential clients who wish to pay back their debts that they should not file for bankruptcy. And for those who want to, but who cannot realistically do it on their own, we explore the option of a Chapter 13 bankruptcy. And bankruptcy attorneys are required to provide you with a written contract that outlines their services and all of the costs. And most good bankruptcy attorneys will give you a free consultation where you can learn about Chapter 7 or Chapter 13 bankruptcy.
I'm an experienced Canton bankruptcy attorney who's filed or managed over 1,000 cases. For more information on Chapter 7 and Chapter 13, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
The fact is that debt settlement companies have bills to pay too. Some are not-for-profit and some are. But one way or the other, they have employees to pay. So how do they make their money? If a company is not-for-profit, then they are getting their funding from credit card companies. If they don't charge you a fee, then they have to be receiving their funding from somewhere. If they're funded by credit card companies, do you think they're going to do what's in YOUR best interest?
Other companies will charge you a fee for their services. If you use them, you'll find yourself in a situation where you're not only trying to pay your debts (with interest), but you're paying exorbitant fees to this debt settlement company too. And the fact is that many of them do not properly account for the money they receive from their "clients". They may pay your creditors slowly or not at all. And when the creditors don't get paid, who do you think they're going to start coming after? (Hint: the answer is "YOU"). Other companies have a system whereby they hold onto your money until there is enough on hand to pay off one creditor. Does this make sense to anyone? I can tell you that the other creditors will not sit by and patiently wait in line to get paid. Not to mention that many of these companies are just plain shady. Ever hear of Ameridebt? The were one of the largest companies out there "helping" consumers. That is until the Federal Trade Commission shut them down. Guess they weren't so helpful after all.
Almost weekly I have clients come in who are getting sued while working in one of these programs. This is usually the tipping point when they decide that, despite their best efforts, it's time to go in another direction. Unfortunately, some of them have wasted thousands of dollars trying to make arrangements that eventually fail. It's understandable that people want to pay their bills. But you have to understand that you ABSOLUTELY WILL NOT get honest information from these companies. No matter what your situation, they will try to sell you on a plan that is "doable". Chances are, however, that the only thing it will do it fatten their wallets at your expense.
So what to do? If you're thinking about dealing with one of these companies, talk to a bankruptcy attorney FIRST! Sound backwards? Actually, it's the smartest thing you can do. Any good bankruptcy attorney will present you with all of your options and honestly evaluate your situation. Many times, I've advised potential clients who wish to pay back their debts that they should not file for bankruptcy. And for those who want to, but who cannot realistically do it on their own, we explore the option of a Chapter 13 bankruptcy. And bankruptcy attorneys are required to provide you with a written contract that outlines their services and all of the costs. And most good bankruptcy attorneys will give you a free consultation where you can learn about Chapter 7 or Chapter 13 bankruptcy.
I'm an experienced Canton bankruptcy attorney who's filed or managed over 1,000 cases. For more information on Chapter 7 and Chapter 13, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
Monday, October 18, 2010
Thinking of Filing for Bankruptcy? - You're Definitely Not Alone
In 2005, Congress changed the Bankruptcy Code with Orwellian-sounding Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Despite the impressive sounding name, BAPCPA has done little to prevent bankruptcy abuse and has done nothing to protect consumers. It's real purpose was to reduce the number of people filing for bankruptcy by making it more difficult, more costly and by forcing more people into Chapter 13 repayment plans as opposed to Chapter 7. It appeared as if the credit card and banking industries had gotten more than their money's worth from President Bush and the Republican Congress.
Yesterday we "celebrated" the 5-year anniversary of the effective date of BAPCPA. What better way to memorialize the day than to take a look back and see just what effect BAPCPA has had on the number of bankruptcy filings 5 years later.
Every year, an administrative agency known as the Administrative Office of U.S. Courts (AOUSC) is required to issue a report about certain bankruptcy statistics. The statistics for 2009 are available and the numbers are hardly surprising. They reveal the following:
But hasn't BAPCPA reduced the number of people filing for Chapter 7 and pushed them into Chapter 13 plans? After all, that was one of its goals. A closer look at the numbers shows that in 2004, the percentage of consumer bankruptcy cases that were filed under Chapter 7 amounted to (drum roll please) . . . 71%! Exactly the same percentage as in 2009. So five years down the road, BAPCPA has neither reduced the number of people filing for bankruptcy, nor has it changed the percentage filing for Chapter 13.
Is there a lesson to be learned? Essentially, we find ourselves in the same position that we were in before the law changed. Of course, now there are additional burdens, cost and expense for debtors, their attorneys, trustees, creditors and the courts. To what end? A Congress and President who knew little if anything about bankruptcy pushed through a measure that has made the process a hassle for everybody, including the very banks and credit card companies that paid them for it. Based on the results five years later, maybe they should ask for a refund.
Filing bankruptcy can be complicated and confusing. For more information on Chapter 7 and Chapter 13, or for a free consultation, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
Yesterday we "celebrated" the 5-year anniversary of the effective date of BAPCPA. What better way to memorialize the day than to take a look back and see just what effect BAPCPA has had on the number of bankruptcy filings 5 years later.
Every year, an administrative agency known as the Administrative Office of U.S. Courts (AOUSC) is required to issue a report about certain bankruptcy statistics. The statistics for 2009 are available and the numbers are hardly surprising. They reveal the following:
- In 2009, there were 1.4 million consumer bankruptcy cases filed, an increase of 32% over 2008!
- Approximately 71 percent were Chapter 7 cases, and 29 percent were Chapter 13 cases (down from 34% in 2008).
- In 28% of Chapter 13 cases, debtors indicated that they had filed for bankruptcy in the previous eight years
- In 2004 there were 1,597,000 cases filed
- In 2005 there were 2,039,000 cases filed
- In 2006 there were 597,000 cases filed
- In 2007 there were 819,000 cases filed
- In 2008 there were 1,086,000 cases filed
- In 2009 there were 1,400,000 cases filed
But hasn't BAPCPA reduced the number of people filing for Chapter 7 and pushed them into Chapter 13 plans? After all, that was one of its goals. A closer look at the numbers shows that in 2004, the percentage of consumer bankruptcy cases that were filed under Chapter 7 amounted to (drum roll please) . . . 71%! Exactly the same percentage as in 2009. So five years down the road, BAPCPA has neither reduced the number of people filing for bankruptcy, nor has it changed the percentage filing for Chapter 13.
Is there a lesson to be learned? Essentially, we find ourselves in the same position that we were in before the law changed. Of course, now there are additional burdens, cost and expense for debtors, their attorneys, trustees, creditors and the courts. To what end? A Congress and President who knew little if anything about bankruptcy pushed through a measure that has made the process a hassle for everybody, including the very banks and credit card companies that paid them for it. Based on the results five years later, maybe they should ask for a refund.
Filing bankruptcy can be complicated and confusing. For more information on Chapter 7 and Chapter 13, or for a free consultation, call me at 330-605-3508 or visit my website at http://www.ohiobankruptcyrelief.com/.
Tuesday, July 20, 2010
Client FAQs - Is It Too Soon To File Again?
Many people who come in to my office seeking bankruptcy protection have already filed before. This begs the question, how soon is too soon to re-file? Unlike most things in bankruptcy the rules for filing a second (or third) bankruptcy are clear cut.
There are different waiting periods for different chapters. The important date is the date of filing of your previous case. It is also important to know that you are only prohibited by these dates if you received a discharge in your previous case. If, for instance, you had a Chapter 13 case that was dismissed, you do not have to wait to re-file (unless the court has prohibited you from doing so).
So here are the different scenarios:
One scenario that can occur, however, is when a client needs to file a Chapter 13 bankruptcy to stop a foreclosure, but it is too soon to re-file. That person can still file a Chapter 13, but they cannot receive a discharge. However, the filing of the Chapter 13 can stop the foreclosure and allow them to pay off the arrearages over the course of their plan.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
There are different waiting periods for different chapters. The important date is the date of filing of your previous case. It is also important to know that you are only prohibited by these dates if you received a discharge in your previous case. If, for instance, you had a Chapter 13 case that was dismissed, you do not have to wait to re-file (unless the court has prohibited you from doing so).
So here are the different scenarios:
- If you filed a Chapter 7 bankruptcy and received a discharge, you must wait 8 years from the date of filing to file another Chapter 7.
- If you filed a Chapter 7 bankruptcy and received a discharge, you must wait 4 years from the date of filing to file a Chapter 13 bankruptcy.
- If you filed a Chapter 13 bankruptcy and received a discharge, you must wait 6 years from the date of filing to file a Chapter 7 bankruptcy.
- If you filed a Chapter 13 bankruptcy and received a discharge, you must wait 2 years to file another Chapter 13.
One scenario that can occur, however, is when a client needs to file a Chapter 13 bankruptcy to stop a foreclosure, but it is too soon to re-file. That person can still file a Chapter 13, but they cannot receive a discharge. However, the filing of the Chapter 13 can stop the foreclosure and allow them to pay off the arrearages over the course of their plan.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
Wednesday, July 14, 2010
What Is A "Bankruptcy Petition Preparer"? - Someone You Should Avoid At All Costs!
Want to overpay for a simple service you could do yourself? Want to throw hundreds of dollars away? Then I've got just the thing for you. It's called a "bankruptcy petition preparer".
So what is a bankruptcy petition preparer? This is the best definition I found. This is taken directly form Nolo.com. A link to this page is here.
"A bankruptcy petition preparer is any person or business, other than a lawyer or someone who works for a lawyer, that charges a fee to prepare bankruptcy documents. Under your direction and control, the bankruptcy petition preparer generates bankruptcy forms for you to file either by typing them or inputting information into a bankruptcy software program.
Because bankruptcy petition preparers are not attorneys, they cannot provide legal advice or represent you in bankruptcy court. This means that the bankruptcy petition preparer cannot:
tell you which type of bankruptcy to file
tell you not to list certain debts
tell you not to list certain assets, or
tell you what property to exempt.
In essence, you must understand what debts your bankruptcy will discharge, what will happen to your property in the bankruptcy, and what laws should be used to exempt your property from being taken for the benefit of your creditors.
In addition, you must file the bankruptcy papers yourself and represent yourself in court. In other words, you are responsible for your case. You act as your own attorney and use the bankruptcy petition preparer as a typing service that transposes the information you give them onto the official forms."
A typing service. That's all they are supposed to be. Understand this point, first and foremost: A BANKRUPTCY PETITION PREPARER IS NOT A LAWYER! Did I say that loud enough? How about this too: A BANKRUPTCY PETITION PREPARER CANNOT GIVE YOU LEGAL ADVICE. Here goes another: A BANKRUPTCY PETITION PREPARER CANNOT REPRESENT YOU IN COURT OR AT YOUR HEARINGS! Let's see, what else? OK: THERE IS NO FORMAL TRAINING OR CERTIFICATION REQUIRED TO BE A BANKRUPTCY PETITION PREPARER. A bankruptcy lawyer has a bachelor's degree plus a degree from an accredited law school. They have also passed the bar exam and are licensed to practice law in a federal court. A bankruptcy petition preparer is not required to have any education or certification at all.
If you choose to use a bankruptcy petition preparer instead of a bankruptcy attorney, you are still completely on your own. And the cost for an attorney (who will represent you, give you legal advice and attend hearings with you) is often not much more than you'd pay the bankruptcy petition preparer. Filing for bankruptcy can be full of pitfalls, and the bankruptcy petition preparer is neither permitted nor qualified to give you any advice about whether you should file under Chapter 7 or Chapter 13 or what the consequences might be. They cannot tell you which property is exempt and which property you may lose. In short, they cannot tell you anything.
Bankruptcy petition preparers are often attractive to people because of the low cost involved. If you decide to file for bankruptcy, it can be an expensive option. Most good attorneys, however, will have flexible fees and payment arrangements that can help you get your case filed in a timely manner. But if you decide to take the risk and do it yourself, throwing hundreds of dollars at a typist could be your biggest mistake of all.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
So what is a bankruptcy petition preparer? This is the best definition I found. This is taken directly form Nolo.com. A link to this page is here.
"A bankruptcy petition preparer is any person or business, other than a lawyer or someone who works for a lawyer, that charges a fee to prepare bankruptcy documents. Under your direction and control, the bankruptcy petition preparer generates bankruptcy forms for you to file either by typing them or inputting information into a bankruptcy software program.
Because bankruptcy petition preparers are not attorneys, they cannot provide legal advice or represent you in bankruptcy court. This means that the bankruptcy petition preparer cannot:
tell you which type of bankruptcy to file
tell you not to list certain debts
tell you not to list certain assets, or
tell you what property to exempt.
In essence, you must understand what debts your bankruptcy will discharge, what will happen to your property in the bankruptcy, and what laws should be used to exempt your property from being taken for the benefit of your creditors.
In addition, you must file the bankruptcy papers yourself and represent yourself in court. In other words, you are responsible for your case. You act as your own attorney and use the bankruptcy petition preparer as a typing service that transposes the information you give them onto the official forms."
A typing service. That's all they are supposed to be. Understand this point, first and foremost: A BANKRUPTCY PETITION PREPARER IS NOT A LAWYER! Did I say that loud enough? How about this too: A BANKRUPTCY PETITION PREPARER CANNOT GIVE YOU LEGAL ADVICE. Here goes another: A BANKRUPTCY PETITION PREPARER CANNOT REPRESENT YOU IN COURT OR AT YOUR HEARINGS! Let's see, what else? OK: THERE IS NO FORMAL TRAINING OR CERTIFICATION REQUIRED TO BE A BANKRUPTCY PETITION PREPARER. A bankruptcy lawyer has a bachelor's degree plus a degree from an accredited law school. They have also passed the bar exam and are licensed to practice law in a federal court. A bankruptcy petition preparer is not required to have any education or certification at all.
If you choose to use a bankruptcy petition preparer instead of a bankruptcy attorney, you are still completely on your own. And the cost for an attorney (who will represent you, give you legal advice and attend hearings with you) is often not much more than you'd pay the bankruptcy petition preparer. Filing for bankruptcy can be full of pitfalls, and the bankruptcy petition preparer is neither permitted nor qualified to give you any advice about whether you should file under Chapter 7 or Chapter 13 or what the consequences might be. They cannot tell you which property is exempt and which property you may lose. In short, they cannot tell you anything.
Bankruptcy petition preparers are often attractive to people because of the low cost involved. If you decide to file for bankruptcy, it can be an expensive option. Most good attorneys, however, will have flexible fees and payment arrangements that can help you get your case filed in a timely manner. But if you decide to take the risk and do it yourself, throwing hundreds of dollars at a typist could be your biggest mistake of all.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
Monday, July 12, 2010
Bankruptcy Fraud - Just How Much Trouble Can You Get In By Lying?
The following is a common situation that needs to be addressed. Often, people will come into my office to talk about bankruptcy and discuss their options. During the course of our conversation, we talk about their assets. Sometimes, I unfortunately have to tell people that they may lose property if they file a Chapter 7 bankruptcy, or pay money to the trustee. Although many people understand this, others get upset. They may talk about transferring property or just not disclosing it on their petition. Of course, I have to advise them that I will not file their petition if I know that we have not disclosed all of their assets or transfers. I often wonder how many of those people then go to visit another attorney and do not tell them about their assets. If you're thinking about hiding assets during your bankruptcy, you need to think twice.
First things first. BANKRUPTCY FRAUD IS A CRIME. According to some sources, nearly 70% of all bankruptcy fraud involves the concealment of assets. You need to know that when you sign your bankruptcy petition, you are signing it under penalty of perjury.
Under federal law "A person who - (3) knowingly and fraudulently makes a false declaration, certificate, verification, or statement under penalty of perjury as permitted under section 1746 of title 28, in or in relation to any case under title 11 (The Bankruptcy Code) shall be fined under this title, imprisoned not more than 5 years, or both." 18 USC 152. The maximum fine is $250,000. This should impress upon you the consequences of intentionally lying on your bankruptcy petition or attempting to conceal assets.
Furthermore, when you sign your petition, it states that "I declare under penalty of perjury that the information provided in this petition is true and correct". Also, when you attend the Meeting of Creditors, your bankruptcy trustee will swear you in. The point is that this is serious stuff people.
Other consequences of lying during your bankruptcy could include: having your discharge denied or revoked. You may also be forced to surrender property to your bankruptcy trustee.
Finally, you need to know that going back and fixing your schedules or disclosing assets does not relieve you of liability for lying in the first place.
If you're concerned about losing property through a bankruptcy, talk to an experienced bankruptcy attorney about the possibility of filing a Chapter 13 bankruptcy. In a Chapter 13, you can keep all of your property, although you will pay the value of your non-exempt property through your Chapter 13 case.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
First things first. BANKRUPTCY FRAUD IS A CRIME. According to some sources, nearly 70% of all bankruptcy fraud involves the concealment of assets. You need to know that when you sign your bankruptcy petition, you are signing it under penalty of perjury.
Under federal law "A person who - (3) knowingly and fraudulently makes a false declaration, certificate, verification, or statement under penalty of perjury as permitted under section 1746 of title 28, in or in relation to any case under title 11 (The Bankruptcy Code) shall be fined under this title, imprisoned not more than 5 years, or both." 18 USC 152. The maximum fine is $250,000. This should impress upon you the consequences of intentionally lying on your bankruptcy petition or attempting to conceal assets.
Furthermore, when you sign your petition, it states that "I declare under penalty of perjury that the information provided in this petition is true and correct". Also, when you attend the Meeting of Creditors, your bankruptcy trustee will swear you in. The point is that this is serious stuff people.
Other consequences of lying during your bankruptcy could include: having your discharge denied or revoked. You may also be forced to surrender property to your bankruptcy trustee.
Finally, you need to know that going back and fixing your schedules or disclosing assets does not relieve you of liability for lying in the first place.
If you're concerned about losing property through a bankruptcy, talk to an experienced bankruptcy attorney about the possibility of filing a Chapter 13 bankruptcy. In a Chapter 13, you can keep all of your property, although you will pay the value of your non-exempt property through your Chapter 13 case.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
Thursday, July 8, 2010
Client FAQs - Do I Have To List ALL of My Debts?
Many times clients will come into my office saying that they "don't want to file on" a certain debt. Perhaps it's a credit card they want to keep, a doctor they have a relationship with, or a family member. Rarely do we have black and white answers to bankruptcy questions, but the answer to this is simple: YES, you have to list EVERYBODY you owe money to in your bankrupcy petition. Even if you THINK you may owe someone money, list them. Even if you don't think you owe someone, but they think you do, list them (as "disputed").
What are the consequences of not listing someone on your petition? It is possible that the particular debt may not be discharged. If you are in a Chapter 7 bankruptcy and the trustee discovers assets to administer, leaving someone off of your bankruptcy petition may mean that the debt is not discharged. The same situation can arise in regard to a Chapter 13 bankruptcy. If you discover that you've left someone off your petition, you should alert your bankruptcy lawyer immediately. He or she can file amended bankruptcy schedules, although the court can charge a fee to do this.
Unfortunately, there is no one resource where you can find out all of your debts. I encourage my clients to go to http://www.annualcreditreport.com/. You are entitled to receive a free copy of your credit report once a year from each of the credit bureaus (Equifax, TransUnion, Experian). At this site you can get them with no cost and no need to sign up for phony credit monitoring.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
What are the consequences of not listing someone on your petition? It is possible that the particular debt may not be discharged. If you are in a Chapter 7 bankruptcy and the trustee discovers assets to administer, leaving someone off of your bankruptcy petition may mean that the debt is not discharged. The same situation can arise in regard to a Chapter 13 bankruptcy. If you discover that you've left someone off your petition, you should alert your bankruptcy lawyer immediately. He or she can file amended bankruptcy schedules, although the court can charge a fee to do this.
Unfortunately, there is no one resource where you can find out all of your debts. I encourage my clients to go to http://www.annualcreditreport.com/. You are entitled to receive a free copy of your credit report once a year from each of the credit bureaus (Equifax, TransUnion, Experian). At this site you can get them with no cost and no need to sign up for phony credit monitoring.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
Tuesday, July 6, 2010
Being Sued? - You Can't Ignore It, And Here's Why
If you're sued in Ohio, you need to act. Sitting back and burying your head in the sand is the WORST thing you can do. So how does your standard lawsuit proceed and what time frames are you looking at? And how does bankruptcy fit in the equation? Here's a primer on how they work and what can happen.
When you're sued, whether in municipal court or common pleas court, you have to be "served" with the lawsuit. Most people have the idea that process servers hunt people down and find unusual and amusing ways to hand them lawsuits and "serve" them. We can thank movies and television for this perception. The fact is that personal service is unusual in Ohio, except in the case of foreclosures. Most service is done through the mail. Ohio rules dictate that you have to first be served by certified mail. If certified mail service is unsuccessful, it is usually tried a second time. If it is unsuccessful again, service is usually by ordinary mail. If the mail is returned or service is otherwise unsuccessful, then you can be served by "publication". Basically, notice of the lawsuit is put in a newspaper and you are considered "served" after a certain amount of time. I won't go into the details, but the point to take away is that you can only delay being served with a lawsuit, but you cannot completely avoid it.
OK, so you've been served. You then have 28 days (not including the date of service) to "answer" the lawsuit. Answering it means filing an answer with the court and serving a copy of your answer on the plaintiff or their attorney, if they have one. If you've answered it, this will delay the lawsuit and the court will put it on a case management track that includes deadlines and hearing dates. If you don't answer it, the plaintiff will likely get a default judgment against you for not answering it. Either way, if it is a legitimate claim, you will likely have a judgment against you eventually.
So what are the consequences of having a judgment against you? This is where we need to pay close attention. If a creditor has a judgment against you, they can then start garnishing your wages, attaching bank accounts and putting liens on your property.
So how does bankruptcy fit in? A Chapter 7 or Chapter 13 bankruptcy will STOP any lawsuits, whatever stage they're at. Whether you've just been served or you're already having your wages garnished, a bankruptcy will stop it. But, as always, there is a caveat. If a creditor has a lien against your home, you may or may not be able to get rid of it through a bankruptcy. If the lien is completely unsecured (you owe more on superior liens than the house is worth), then you can get rid of it in a Chapter 7 or Chapter 13 bankruptcy. If, however, the lien is even partially secured, then the debt may be wiped away, but the lien will continue to stay on the property. If this is the case, then it will have to be dealt with whenever the house is sold or refinanced. An experienced bankruptcy attorney should be able to help you through the process of getting rid of liens in bankruptcy.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
When you're sued, whether in municipal court or common pleas court, you have to be "served" with the lawsuit. Most people have the idea that process servers hunt people down and find unusual and amusing ways to hand them lawsuits and "serve" them. We can thank movies and television for this perception. The fact is that personal service is unusual in Ohio, except in the case of foreclosures. Most service is done through the mail. Ohio rules dictate that you have to first be served by certified mail. If certified mail service is unsuccessful, it is usually tried a second time. If it is unsuccessful again, service is usually by ordinary mail. If the mail is returned or service is otherwise unsuccessful, then you can be served by "publication". Basically, notice of the lawsuit is put in a newspaper and you are considered "served" after a certain amount of time. I won't go into the details, but the point to take away is that you can only delay being served with a lawsuit, but you cannot completely avoid it.
OK, so you've been served. You then have 28 days (not including the date of service) to "answer" the lawsuit. Answering it means filing an answer with the court and serving a copy of your answer on the plaintiff or their attorney, if they have one. If you've answered it, this will delay the lawsuit and the court will put it on a case management track that includes deadlines and hearing dates. If you don't answer it, the plaintiff will likely get a default judgment against you for not answering it. Either way, if it is a legitimate claim, you will likely have a judgment against you eventually.
So what are the consequences of having a judgment against you? This is where we need to pay close attention. If a creditor has a judgment against you, they can then start garnishing your wages, attaching bank accounts and putting liens on your property.
So how does bankruptcy fit in? A Chapter 7 or Chapter 13 bankruptcy will STOP any lawsuits, whatever stage they're at. Whether you've just been served or you're already having your wages garnished, a bankruptcy will stop it. But, as always, there is a caveat. If a creditor has a lien against your home, you may or may not be able to get rid of it through a bankruptcy. If the lien is completely unsecured (you owe more on superior liens than the house is worth), then you can get rid of it in a Chapter 7 or Chapter 13 bankruptcy. If, however, the lien is even partially secured, then the debt may be wiped away, but the lien will continue to stay on the property. If this is the case, then it will have to be dealt with whenever the house is sold or refinanced. An experienced bankruptcy attorney should be able to help you through the process of getting rid of liens in bankruptcy.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
Tuesday, June 29, 2010
Red Alert! Want to Do A Bankruptcy Yourself? Find Out What SOME Trustees Are Doing That Could Make You Lose Your Home
Here's a quick hitter about the perils of doing a bankruptcy yourself, or hiring an attorney who isn't an expert in the field. Imagine this situation: You own a home, it has a mortgage, the payments are current and there is little or no equity. You want to keep the house. If you read my previous post, you'd think that there would be nothing in the way of you keeping your house. Well, there's something that SOME Chapter 7 Trustees are doing that could cause you to lose your house, even in this situation.
In Ohio, a mortgage is required to be signed by the borrower and be attested to by two witnesses and a notary public. If it's not, then it can be invalidated. If you think this is good news for your bankruptcy, then you're wrong. In theory, if the witnesses or the notary were not present when the mortgage was signed, then it is not valid and the property is not secured. What this means for your bankruptcy is that the property would be all equity. If it is worth more than you can exempt, the trustee can sell the property. The practical effect is that the debtor/borrower and the lender (both of whom entered into their agreement in good faith) both get screwed in favor of unsecured creditors like credit card companies and collection agencies. As a note, it is my opinion that this kind of action by any trustee is immoral and unconscionable. However, my opinion aside, it sometimes happens.
To be fair, most trustees DO NOT pursue this avenue, but there are some that do. And if you run into one, you'd better be prepared to answer his or her questions about it. When I know I'm going to have a hearing with one of these trustees, I prepare my clients. To be fair, most clients can't remember who was there and who wasn't. In this case, there is really nothing the trustee can do to invalidate the mortgage. But it's just another pitfall and another reason you should hire a qualified professional to handle your case.
For more information on Chapter 7 and Chapter 13, visit my website at www.OhioBankruptcyRelief.com. If you're in Northeast Ohio, call me at 330-605-3508 for a free bankruptcy consultation.
In Ohio, a mortgage is required to be signed by the borrower and be attested to by two witnesses and a notary public. If it's not, then it can be invalidated. If you think this is good news for your bankruptcy, then you're wrong. In theory, if the witnesses or the notary were not present when the mortgage was signed, then it is not valid and the property is not secured. What this means for your bankruptcy is that the property would be all equity. If it is worth more than you can exempt, the trustee can sell the property. The practical effect is that the debtor/borrower and the lender (both of whom entered into their agreement in good faith) both get screwed in favor of unsecured creditors like credit card companies and collection agencies. As a note, it is my opinion that this kind of action by any trustee is immoral and unconscionable. However, my opinion aside, it sometimes happens.
To be fair, most trustees DO NOT pursue this avenue, but there are some that do. And if you run into one, you'd better be prepared to answer his or her questions about it. When I know I'm going to have a hearing with one of these trustees, I prepare my clients. To be fair, most clients can't remember who was there and who wasn't. In this case, there is really nothing the trustee can do to invalidate the mortgage. But it's just another pitfall and another reason you should hire a qualified professional to handle your case.
For more information on Chapter 7 and Chapter 13, visit my website at www.OhioBankruptcyRelief.com. If you're in Northeast Ohio, call me at 330-605-3508 for a free bankruptcy consultation.
Friday, June 25, 2010
Client FAQs: Will I lose my home in bankruptcy?
With any question, of course, the answer depends on the circumstances. Clients should realize that with any property they have, their bankruptcy trustee is concerned with one thing, equity. The trustee's job is to find any property that is not exempt, liquidate it, and use the money to pay off creditors. In most Chapter 7 cases, there is nothing for the trustee to sell. These are called "no-asset" cases. Simply put, if there is no equity in your home (a common situation these days), then your bankruptcy trustee will not have any interest in it. But even if you do have equity, you may still be safe. The Ohio bankruptcy exemptions for homes (the "homestead exemption") allows any person to exempt $21,625 of equity in their primary residence. Double this for joint owners ($43,250). Even if you have more than this, your trustee may not pursue your property if they will not realize any money when taking into account the costs of sale.
If you have too much equity in your home, there is one of two ways this is resolved. Either the trustee will sell your property (and pay you the value of your exemption), or you can pay the trustee money to keep the property (in an amount agreed upon between the trustee and your attorney). If neither of these is an option, you should consider a Chapter 13 bankruptcy.
In a Chapter 13 bankruptcy, you do not lose the property, although the nonexempt portion of your equity is taken into account for purposes of your plan payment.
Finally, you should make sure that your mortgage payments are current, or that you have arrangements with your mortgage company, if you want to keep the home. If it is behind, you may want to consider a Chapter 13 bankruptcy to get it caught up or stop a foreclosure. Also, you can sometimes get rid of, or "strip", a second mortgage if you complete your Chapter 13 Plan and get a discharge.
For more information on Chapter 7 and Chapter 13, visit my website at http://www.ohiobankruptcyrelief.com/.
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