Many Americans have experienced financial devastation over the past few years—it seems that paychecks are simply not keeping up with the increase in prices on just about everything. When you feel as though you’ve reached the end of your rope financially and are uncertain about what you need to do to get back on track, you may have considered bankruptcy. While filing for bankruptcy should never be taken lightly, it can be a solid solution to an out-of-control problem. If you have thought long and hard about whether bankruptcy is the right choice for you, and have decided to move forward, you could significantly benefit from the experience of a Centerville bankruptcy attorney from Horwitz & Horwitz.
Why Should You Choose A Centerville Bankruptcy Attorney from Horwitz & Horwitz?
Once you have made your decision to file for bankruptcy, your next decision is which law firm to choose to guide you through the process. At Horwitz & Horwitz, our attorneys have been helping people in the same situation you now find yourself in for many, many years. Centerville bankruptcy attorney Barbara Horwitz founded the law firm with Jon Horwitz thirteen years ago. Between our two lawyers, we have more than 53 years of combined experience. Our clients appreciate the fact that we recognize what an important decision hiring a Centerville bankruptcy attorney really is.
We will never exert pressure on a client to hire us—we lead with an honest, straightforward approach, with plenty of individualized attention for each client. When you call, you will always talk to one of our attorneys—we never hand off our cases to paralegals or junior attorneys. We also understand that it can be nerve-wracking to meet with a Centerville bankruptcy attorney and discuss your private financial matters. We will set you at ease from the very first meeting, allowing you some relief from the months or years of financial crises.
Although the Bankruptcy Code is a uniform law enacted by Congress which applies to all bankruptcies throughout the United States, federal law also allows each individual state to decide what real and personal property is exempt, therefore legally protected, during a bankruptcy case. While in some states you are allowed to choose from a list of federal or state exemptions, other states, including Ohio, allow you to only use state exemptions. This means that a bankruptcy filer in one state could be allowed to keep his or her home and the equity in that home, in another state the bankruptcy filer could lose their home in a bankruptcy proceeding. Further, there can be differences from one jurisdiction to another in how bankruptcy laws are interpreted and applied.
Who Files for Bankruptcy?
People who have never filed for bankruptcy tend to have plenty of preconceived notions about those who do. A study published in debt.org found that nearly half of all bankruptcies were related to outstanding medical expenses resulting from serious illnesses or accidents, from losing at least two weeks’ of work due to the illness or accident and/or from medical expenses not covered by insurance. Since that time, the most commonly cited reasons for bankruptcy include job loss, reduced income, medical expenses from illness or injury, unexpected expenses due to an emergency, credit card debt and as preparation for a divorce.
The study further found that the number of annual bankruptcies varies widely from state to state and that states with more lenient wage-garnishment laws typically see more bankruptcy filings. California typically has the most bankruptcies in the nation, with Alaska having the least, although the study did not account for population, so these facts are not all that surprising. That being said, in 2011, five states in the nation accounted for 38 percent of all bankruptcies in the nation (California, Florida, Georgia, Illinois and Ohio).
How Bankruptcy Can Help
Of course, every situation is different, and the decision to file for bankruptcy should never be made lightly, but bankruptcy may make it possible for a debtor to:
- Prevent repossession of a vehicle and, in some cases, force the creditor to return repossessed property;
- Eliminate the legal obligation to pay most or all of his or her debts, obtaining a fresh financial start;
- Stop foreclosure proceedings on a home or mobile home, offering the opportunity to catch up on missed payments;
- Prevent termination of a utility service or restore a utility service which has been disconnected;
- Prevent wage garnishment or harassment from creditors;
- Provide a method of challenging creditor claims when the creditor may have committed fraud or is attempting to collect more than the debtor owes.
What Bankruptcy Cannot Do
It is important that those considering bankruptcy not see it as a total cure to every financial issue. Bankruptcy can usually not eliminate certain rights of secured creditors—the entity which holds your mortgage or the company who holds the loan for your automobile in particular—however those entities can sometimes be forced to take payments over time as the bankruptcy process goes forward. Bankruptcy has no effect on non-dischargeable debts. Student loans are not dischargeable debts; neither are child support payments, spousal support payments, certain other debts related to divorce, criminal fines, some tax debts and any orders from a court of law for restitution. Bankruptcy cannot protect co-signers on your debts. This means that if a relative or friend co-signed a loan for you, and that loan is discharged in bankruptcy, the co-signer will still be responsible for part or all of the loan. Finally, bankruptcy cannot discharge any debts which are incurred after the bankruptcy has been filed.
Types of Bankruptcy
The most common types of bankruptcy are Chapter 7 and Chapter 13. Chapter 7 bankruptcy is known as “straight” bankruptcy and requires that the debtor relinquish all property, other than property which falls under an exception. Chapter 13 bankruptcy requires that the debtor follow a plan to pay back debts—or at least part of all debts—from his or her current income. Family farmers can file for bankruptcy under Chapter 12, and Businesses whose debts are quite large can file under Chapter 11.
Chapter 7 Bankruptcy
When your case is filed by your Centerville bankruptcy attorney, it will immediately be assigned to a Trustee, whose principal job is to stand in place of your creditors and see that they are dealt with fairly. If you are filing a chapter 7 bankruptcy, it will be assigned randomly to one of the four Chapter 7 Trustees assigned to that court right now. The Trustee conducts the only official hearing that takes place in most chapter 7 cases, which is referred to as the “341” (referring to the law that governs it) or the “creditors meeting”. The Trustee’s job in a chapter 7 is to see if you have any non-exempt (unprotected) assets that should be liquidated, which means that they are turned into cash. The Trustee on your case would then divide that cash among your creditors who file proof of their claims, giving them back a little bit of what they’re owed. While the creditors themselves are given notice of the meeting, it is very rare for them to attend. They generally depend on the Trustee to protect their interests.
Chapter 13 Bankruptcy
Chapter 13 bankruptcies are somewhat different when it comes to the Trustee and what he does. There is only one Chapter 13 Trustee assigned to the Dayton branch of the Court. His office is more extensive than that of the Chapter 7 Trustees because his job is to administer the Plan, which consists of receiving and making distributions from your future income as your Chapter 13 case proceeds. He also holds a 341 meeting, but here the emphasis is more on whether the Plan as proposed by you and your Centerville bankruptcy attorney is acceptable. His job technically is to get the most money he can from your future wages for the benefit of your unsecured creditors. He must also respect the fact that you and your family will need a reasonable amount of income to meet your household expenses while the Plan is in effect, which is between three and five years. Moreover, your financial situation may substantially change during the time you’re in the Plan, and the Trustee will be involved with approving any modifications to the Plan that may be necessary so that you can successfully complete it.
Although the Trustees’ job officially is to represent the creditors, we have found over many years that they are respectful and courteous to the debtors who come before them. The 341 meeting is not an interrogation under bright lights. The Trustee will not be asking you “trick questions”. The questions will be straightforward, and many times can be answered by a simple yes or no. Further, Horwitz & Horwitz will be attending the meeting with you, and can intercede we feel that something has gone amiss and that there needs to be clarification.
Obviously, you will need to answer the Trustee’s questions honestly and openly. We meet with clients shortly before the 341 meeting to go over with them what we expect to take place at the 341 meeting based upon the unique circumstances of their case. We consider this a necessary meeting, and an essential part of my representation of my clients. We also make sure that they understand exactly where the hearing room is, and when they should plan to be there.
How Can a Centerville Bankruptcy Attorney Near You Help?
Attorney Barbara Horwitz can help you with many of the following problems associated with debt:
Creditor harassment—Once you’ve filed for bankruptcy an automatic stay goes into effect. This stay specifically states that your creditors are no longer allowed to contact you to collect debts and protects you from harassing phone calls, emails, and letters.
Home foreclosure—Chapter 7 bankruptcy will not, in the end, prevent a foreclosure on your home, however, once you file for Chapter 7, the court will issue an automatic stay, placing a hold on the foreclosure while the bankruptcy case is pending. If you want to keep your home, you must continue making payments and must make up already-missed payments. If you cannot immediately catch up on your missed mortgage payments but you could, with time, your attorney may ask you to consider Chapter 13 bankruptcy. With Chapter 13 bankruptcy, you must have a high enough income to make your mortgage payments as well as pay your other lenders.
Repossession—If your vehicle is in danger of being repossessed, once you file Chapter 7 bankruptcy an automatic stay goes into effect, and your lender must stop repossession efforts. The lender can then ask the court to lift the stay so the car can be repossessed—a motion you can oppose. You may be able to try to informally negotiate with your automobile lender to cure your default; if you are not actively working towards a solution, the judge will lift the stay, allowing the lender to repossess the vehicle.
Wage garnishment—If you are wondering whether your wages can be garnished after you file bankruptcy, the answer is “maybe.” Bankruptcy has the potential to stop wage garnishment with an automatic stay. The automatic stay is a court order that stops most creditors from continuing debt collection activities, including wage garnishment. If your wages are being garnished as a result of unpaid child support, bankruptcy will not stop wage garnishment.
Medical bills—Medical bills are the number one reason people file Chapter 7 bankruptcy. Since medical bills are classified as nonpriority, unsecured debt, they are usually discharged during a Chapter 7 bankruptcy.
Student loans—Student loans are typically not dischargeable under Chapter 7 bankruptcy unless you can show your student loan debt imposes an undue hardship on you, your family, and your dependents. This is a requirement that is, historically, very difficult to meet.
Tax debts—Chapter 7 bankruptcy may discharge personal liability for tax debts older than three years—unless your returns were filed late. Businesses are not allowed to discharge tax debts.
Emergency bankruptcy filing—An emergency bankruptcy filing allows you to stop serious collection measures like foreclosure, wage garnishment, or repossession. Emergency bankruptcy filing lets you file only the minimum required forms to get your bankruptcy case started—the remainder of the paperwork must be filed within 14 days, or you risk having the case dismissed.
Repairing your credit after bankruptcy—There are several things you can do after bankruptcy to begin repairing your credit. These include:
- Make all your remaining debt payments on time, each and every month. If you are still responsible for your student loans, make sure you make those payments on time. If you were able to keep your home and vehicle, make these payments in a timely manner, every month.
- Stay with your current job, rather than “job-hopping,” which can negatively influence potential lenders.
- Try to get a new credit card, then anytime you charge something, immediately pay it off within the billing cycle. Do this on a regular basis, and your credit will slowly improve. You may have to apply for a secured credit card or possibly a retail or gas card.
- Consider becoming an authorized user on another’s credit card (someone with a good credit history).
- Make sure your regular payments are reported to the credit bureaus.
- Check your credit report often to ensure there are no mistakes on it
You don’t have to feel embarrassed that you’re dealing with financial difficulties. You don’t have to go through this difficult time alone.
In the state of Ohio, the following exemptions currently apply to Chapter 7 and Chapter 13 bankruptcies:
- The equity in any real or personal property used as a residence up to $145,425 per person
- Any spousal support or child support necessary for regular support;
- Any business partnership property;
- Benefits such as those given to firefighters and police officers;
- IRAs necessary for support;
- Keoghs needed for support, and
- Public employee pensions, public school employee pensions, state highway patrol pensions and pensions which benefit firefighter dependents.
- The equity in one motor vehicle titled in the debtor’s name up to $4,000;
- Household individual items up to $625 per item
How Do I File for Bankruptcy?
Once you’ve made the decision to file for bankruptcy and determined which type of bankruptcy you qualify for, your attorney will need to have all the necessary documentation to begin the process. This includes tax returns, bank statements, proof of income, investment and retirement statements, life insurance information, child support and spousal support information, a copy of your Social Security card and driver’s license, mortgage, car loan, and credit card statements, a valuation of your home, car, and any rare or collectible items you own, and a list of household items. The number of months or years of these documents you will need depends on whether you are filing Chapter 7 or Chapter 13 bankruptcy.
In the state of Ohio, you are required to take a Debtor’s Education Course, providing a completion certificate of the course to your attorney. Your Centerville bankruptcy attorney will assemble all your documentation, prepare the necessary paperwork, and then after you’ve signed the paperwork, the attorney will file everything necessary. A Trustee will be appointed to you, and they may require additional information. There will be a meeting of creditors that you must attend—this is known as a 341 meeting. At this meeting, your Trustee will confirm all information; while creditors can attend this meeting, they rarely do. If everything goes according to schedule, you will attend a final court hearing. The judge will review all the paperwork and confirm your bankruptcy.
How Long Will Bankruptcy Stay on My Credit Report?
The answer to this question depends on which type of bankruptcy you file. If you file Chapter 7 bankruptcy—the most common type—it will remain on your credit report for ten years. If you file Chapter 13 bankruptcy, it will remain on your credit report for seven years. While both of these seem like a very long time, you must consider the effect that late payments or skipped payments are currently having on your credit report.
Find a Fresh Start through Bankruptcy
When you’re dealing with overwhelming debt, it can be stressful and embarrassing. With the help of an experienced Centerville bankruptcy attorney, you can make a fresh start.
At Horwitz & Horwitz, LLC, we help people struggling with debt get past their financial difficulties.
Is bankruptcy right for you? We will talk with you about your unique situation to help you understand if bankruptcy is the best option for you. You will work directly with Barbara Horwitz, an experienced bankruptcy lawyer, not a paralegal or receptionist.
We understand that bankruptcy can be frightening and difficult. We’ll work to make the bankruptcy process as easy and stress-free as possible. One of the biggest myths of bankruptcy is that it is something to be ashamed of. But you should know that we’re here to support you and advocate for your best interests, not judge you.
Find out if Chapter 7, Chapter 13, or Chapter 11 bankruptcy could be right for you by contacting us today. We’ll let you know whether bankruptcy is right for you, which type you qualify for, and what you can keep in bankruptcy.
At Horwitz & Horwitz, LLC, we understand that bad thing can happen to good people. We are dedicated to helping good people just like you who are facing financial difficulties. Our attorneys will put our knowledge and skills to work for you. We understand the pressure that comes with bankruptcy and will work hard on your behalf to minimize that pressure to the extent possible. Contact Horwitz & Horwitz today for solid advice and answers to your questions.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.