Important Information for Your Payments During the Covid-19 Financial Crisis

Our lives were upturned in a couple of days last month with the COVID-19 pandemic.  Now we’re looking in the next few weeks (hopefully!) to come out of the “stay-at-home phase” of our current lives and pick up the pieces of our personal finances.  In any case, it’s going to take a long while before our economy recovers from this devastation. We are all sharing in a world of hurt. We are all scared.

Many of you may have what is classified as a “non-essential” job, where you are not working and not getting paid. Others of you may have had to leave your employment because you have had to stay home with your school-age children. Or you may be “lucky” enough to still be employed, but are earning less because you are on commission and aren’t making as many sales.

The offices of Horwitz & Horwitz are open during this time, although we are basically working by telephone and email rather than meeting with clients directly. [Read more…]

A Word to Small Business Owners

We are all watching our financial world crumble before us.  Even as we thank our lucky stars that we and our families have yet been spared being “infected” with COVID-19, we are all to a great extent “affected”.  Especially those of us who have small businesses, either LLCs, partnerships or sole proprietorships.  We don’t qualify for unemployment compensation.  The value to us of the Cares Act is yet to be seen.

How might the Cares Act help small business owners?

Recovery Rebates

  1. It is planned to provide all U.S. residents with incomes of less than $75,000 with $1200 for singles and $2400 for married couples;
  2. Those residents with dependent children are eligible to receive an additional $500 per child, so long as the child would qualify for the Child Tax Credit (basically, under 17 years of age).
  3. Checks will be sent to the address or bank account used on your 2018 or 2019 tax returns, with no action required for most eligible recipients.

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Bankruptcy Help on the Way for Student Loan Borrowers

At long last, it appears that Congress is looking to help the millions of people saddled with student loan debt that they have no hope of ever totally repaying.   That help is coming through the bankruptcy laws being changed to make it possible to discharge (wipe out) those loans through bankruptcy proceedings.

Student loan debt has been a tremendous problem nationwide.  It is estimated that as many as forty-four million Americans owe more than $1.5 trillion in outstanding student loans.  That makes student loan debt second only to credit card debt as the highest category of debts owed by Americans.  The sponsor of the proposed legislation, Sen. Dick Durbin, hopes that it can be an escape clause for student loan borrowers who, he says, carry their student loan debts to their graves. [Read more…]

What Is The Importance Of My Credit Rating?

Calculator and graphing paperYou are surely aware that the three major credit reporting agencies (CRAs), also known as the credit bureaus, have a lot of power over whether you can get financing for vehicles, homes, and other credit transactions.  But you may not know how the CRAs get the information for your credit report, or what your credit score really means.  Since consumer credit history, scores, and reports are extremely important in your life, you need to make sure that you understand them and what you can do about them if they are not reporting accurately.

When you apply for credit, the potential lender goes to the three main credit bureaus, (Equifax, Experian, and TransUnion), to review your credit report.  There are many other CRAs as well, but these three have emerged as the primary sources of credit reports.  Your credit report contains information about your bill payment history, current loans and debts, and other financial information.  It usually also states your current address and the name of your employer, as well as past addresses and employers.  Finally, a credit report may include whether you’ve been sued in the past or filed for bankruptcy. Negative information about you can stay on your credit report for seven to ten years.

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Does the Automatic Stay in the Bankruptcy Law Prevent a Landlord from Being Able to Evict the Tenant on a Residential Lease?

You are probably aware that when you file a bankruptcy, an “automatic stay” goes into effect right away, which means that none of your creditors can take any further action against you without first getting the approval of the bankruptcy court.  Therefore, if anyone is suing you, that lawsuit has to stop and, if it’s for money damages against you, will most likely be dismissed.  Even if you are in the middle of a divorce action, those proceedings are frozen during the pendency of the bankruptcy action, or at least until an order of relief from stay to go forward is granted by the Bankruptcy Court.

[Read more…]

What Can You Do with a Car That the Lender Refuses to Take Back?

Many people, when filing bankruptcy, want to give back (surrender) their vehicles to the lender who holds their car loans.  The theory is that the lender will take possession and then re-sell the car, and the debtor will get a discharge of that entire debt in the bankruptcy.   If a chapter 7 debtor states on his Statement of Intention that he is surrendering the vehicle, then the debt will be wiped out when the bankruptcy is discharged.

The problem arises when the car is worth significantly less than what’s owed to the lender, and therefore the lender refuses to accept the car back.  You now have the car, but the lender is holding the title.  You can’t sell or trash the car without the title, and — guess what– the lender doesn’t want to give up the title unless you pay what you owe!  Neat little game they’ve got going there, isn’t it?  What can you now do with the car?  Unfortunately, it’s a scenario that’s been playing out frequently over the past few years.

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Can Non-Citizens File Bankruptcy?

There is a lot of discussion now about whether people from foreign countries who live and work in the United States without seeking citizenship should be entitled to the same rights as citizens. Since these non-citizens are consumers who almost certainly will accumulate debt, they may wonder if they can seek relief from their debts under the bankruptcy laws, or whether that right is specifically limited to people who are citizens.

Actually, the bankruptcy laws allow non-citizens to file. The Bankruptcy Code defines “a debtor” as “a person that resides or has a domicile, place of business, or property in the United States,” without requiring that person be a citizen. Therefore, the right to seek relief under the bankruptcy laws is available to both citizens and non-citizens, so long as they can prove they make their home here.

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OBES CLAIMS IT OVERPAID MY UNEMPLOYMENT COMPENSATION, AND IS TRYING TO COLLECT IT BACK FROM ME. CAN A BANKRUPTCY HELP ME OUT?

The employment situation in Ohio was pretty bleak for the past few years. You may have found yourself out of a job with no replacement in sight and mounting bills that had to be paid. Or you may have employment that is seasonable, such as landscaping or construction, and have to rely on unemployment compensation to cover the periods when you’re not able to do your work. For whatever reason, you applied to the Ohio Bureau of Employment Services (OBES), and were awarded a weekly benefit amount. [Read more…]

PUT YOUR OXYGEN MASK ON FIRST

We’ve all heard the drill. As the plane is taking off, the stewardess cheerfully stands at the head of the aisle and warns you that if air is suddenly sucked out of the cabin, a little oxygen mask will drop magically before your eyes at the same time one is falling before your young child’s sweet little face.  But DON’T EVEN THINK [Read more…]

SHOULD YOU USE YOUR RETIREMENT PLAN TO PAY DEBTS?

We hear that the economy is “recovering”, but most people are still having a tough time, and the immediate future does not look too promising. You yourself may be surviving on credit cards to pay for your daily expenses, and are feeling anxious as the balances on those cards increases. On the other hand, you regularly receive statements on your 401(k) plan from your work, and see money just sitting there. The thought occurs to you to use that money to help you out of your current financial crisis. But is that a good idea? [Read more…]