D is for Deciding to File Bankruptcy

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The decision to file bankruptcy, whether it’s chapter 7 bankruptcy or chapter 13 bankruptcy, is an emotionally difficult one.  People often struggle with it for many months or even years.  I think it’s partially because of optimism…we think if we hang on just a little bit longer our financial situation will get better.  Occasionally it does.  If that’s the case for you, then you don’t need me for debt relief services.  Bankruptcy should be a last resort and it usually is for most people….often too much of a last resort.

What happens when things don’t get better?  People wait too long to do something effective about their debt.  They just end up prolonging the inevitable and at a very high cost.  Many people who meet with me go through any savings, cash out their retirement, borrow from friends and family, avoid calls, lose sleep and are stressed.  Now they don’t have retirement savings, regular savings, and have burned bridges with friends and family AND they still need a bankruptcy.

Wouldn’t it be better to find out your options before you did other drastic things?  For example, when someone cashes out their retirement account, they have tax consequences AND they don’t have the retirement savings they need when it’s time to actually retire.  ERISA qualified plans are completely protected through bankruptcy exemptions in Ohio as are PERS and OPERS.  You do not lose them when filing a bankruptcy.

People also meet with me knowing that they need a bankruptcy but take several years to come to terms with it.  The time spent on the emotional struggle is a waste.  This might sound harsh but it’s true.  The longer the time between meeting with me and filing is time that could have been used to rebuild instead of wrestling with feelings of guilt and defeat.  You can earn more money, make better budget choices, and invest again but you can’t get more time.  Don’t waste it.

Pull the emotion out of this.  Analyze your finances.  Get good information from a reputable bankruptcy attorney.

Decide.  File.  Close that chapter and move on.

Start fresh.

 

Other bankruptcy lawyers talking about the letter D nationally are:

Pittsburgh Bankruptcy Attorney, Shawn N. Wright:  http://www.pittsburgh-bankruptcy-law.com/blog/bid/120099/D-is-for-Debt-Buyer

Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein: http://www.morethanbankruptcy.com/bankruptcy-a-z-d-is-for-debt-relief-agency.html

New York Bankruptcy Lawyer, Jay S. Fleischman: http://www.consumerhelpcentral.com/bankruptcy-alphabet-debtor/

Taylor Michigan Bankruptcy Lawyer, Christopher McAvoy: http://downriverbankruptcy.com/debtor/#axzz1funGQkHg

Wisconsin Bankruptcy Lawyer, Bret Nason: http://nasonlawfirm.com/archives/696

Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell: http://bankruptcyblog.caldwell-lawfirm.com/2011/11/06/bankruptcy-alphabet-d-is-for-deconsolidate.aspx

Northern California Bankruptcy Lawyer, Cathy Moran: http://www.bankruptcysoapbox.com/bankruptcy-alphabet-d-for-discharge/

Los Angeles Bankruptcy Attorney, Mark J. Markus: http://www.bklaw.com/bankruptcy-blog/2011/11/bankruptcy-alphabet-discharge-of-debts-bankruptcy/

Kona Bankruptcy Attorney, Stuart Ing: http://www.bankruptcyhi.com/2011/12/d-is-for-discharge/

Daniel J. Winter, Chicago Bankruptcy Attorney:  http://www.bankruptcylawchicagoblog.com/bankruptcy-alphabet%E2%80%94d-is-for-discharge-order/

Los Angeles Bankruptcy Law Monitor, Christine A. Wilton: http://www.losangelesbankruptcylawmonitor.com/2012/02/articles/bankruptcy-law-overview/bankruptcy-alphabet/d-is-for-discharge/

Birmingham Bankruptcy Attorney, Elizabeth Johnson: http://www.birminghambankruptcyhelp.com/bankruptcy-alphabet-d-is-for-discharge/

St. Louis, Missouri Bankruptcy Attorney, Nancy Stokley Martin: http://www.stokleylaw.com/2012/bankruptcy-alphabet-d-is-for-discharge-in-bankruptcy/

Chicago Bankruptcy Attorney, Kyle A. Lindsey:  http://www.lindsey-law.com/chicago-bankruptcy-alphabet-d-is-for-dischargeable-debt/

Marin County Bankruptcy Attorney, Catherine Eranthe:  http://marin-bankruptcy-law.com/242/bankruptcy-a-to-z-d-is-for-disclose/

Colorado Springs Bankruptcy Attorney Bob Doig:  http://springsbankruptcylaw.com/colorado-springs-bankruptcy-abcs-d-is-for-disclosures/

San Francisco Bankruptcy Attorney, Jeena Cho:  http://www.jclawgroup.com/blog/bankruptcy-alphabet-d-is-for-dos-and-donts/

Livonia Michigan Bankruptcy Attorney, Peter Behrmann:  http://www.livoniamichiganbankruptcy.com/bankruptcydoanddonts/

Philadelphia Bankruptcy Lawyer, Kim Coleman:  http://www.colemankempinski.com/documents-bankruptcy-alphabet/

Philadelphia Suburban Bankruptcy Lawyer, Chris Carr:  http://christophercarrlaw.wordpress.com/2011/12/07/d-is-for-domestic-support-obligation/

Miami Bankruptcy Attorney, Dorota Trzeciecka:  http://dorotatrzeciecka.com/2012/03/04/bankruptcy-a-z-d-is-for-domicile/

Cleveland Area Bankruptcy Lawyer Bill Balena:  http://ohiobankruptcysource.com/d-for-dui-dwi-ovi/

Vermont-New Hampshire Bankruptcy Lawyer, Michelle Kainen:  http://kainenlaw.com/the-bankruptcy-alphabet-d-is-for-debt-settlement/

C is for Check Your Bills, Bank Account Statements and Paystubs

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When you’re tight on money and considering filing for either chapter 7 or chapter 13 bankruptcy, every dollar matters.  It’s important to know where your money is going so you can budget properly.  But, in this age of convenience services, it’s easy to lose track of it.  We’re often encouraged to set up automatic bill pay for our utilities, direct deposit for our paychecks, and paperless bank statements.  Sure, it’s “green” but it becomes much easier to miss errors.  We are generally bad at reviewing these statements and it costs us.

For example, I received my cable bill on line today and noticed that it was $10 more than normal.  If I had it on automatic bill pay, I may not have noticed that change in my bank account balance.  It turns out I had a free Showtime promotion that had expired on the most recent billing cycle.  (I didn’t even know I had Showtime the last 6 months.)  Anyway, it took some time to situate but it was worth it.  $10 doesn’t seem like a lot but it works out to $120 a year.  There are plenty of places to spend that money instead of spending it on a channel I didn’t know I had.

The other thing that happens more than you might realize is a random deduction comes out of your paycheck that you’re not aware of.  Sometimes it’s a garnishment.  Although you should have received notice of the garnishment order, occasionally they slip past people.  A garnishment can take 25% of your income in Ohio.  That’s a lot of money to be missing.  If your income fluctuates anyway and you get direct deposit, you can miss it.

Finally, it’s important to reconcile your checking statements.  Compare your deposits receipts to ensure the deposits were done properly.  Occasionally, numbers are transposed.  Ensure that the checks you wrote that month were cashed.  Check for duplicate charges.  Make sure that you did not inadvertently authorize someone to take a monthly charge from your checking.

It might feel like a lot of work at first but it’s your money.  Know where it’s going.

Other Bankruptcy Attorneys Talking about the Letter C Include:

 

B is for Bankruptcy Budget

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You can’t have a conversation about bankruptcy without a discussion about your budget.  Sometimes not having a budget is the reason you are even speaking to a bankruptcy attorney.  The hardest part is figuring out how much you are really spending.  Then, you need to close up the holes in your budget.  Underestimating how much you need is a problem.  Underestimating how much you actually spend is a problem too.

When meeting with your bankruptcy attorney, be honest.  You don’t get bonus points for saying you only spend $100 a month on groceries for your family of 5.  I know that’s not true and if it is true, you’re malnourished.  Be realistic.  This is especially important when you file a chapter 13.   If you underestimate how much you need, you will feel pinched and not have enough for your reasonable and necessary expenses.

You may hear your bankruptcy attorney discuss Schedule J with you.  That is the form that contains your monthly budget that is filed with your bankruptcy whether you do a Chapter 7 or Chapter 13.  You need to supply the numbers because your budget is unique to you.  How do you determine what your numbers should be?

  • Monthly- these are easy to figure out because they occur monthly
    This would be items like your rent, mortgage payment or car payment
  • Weekly- this is a little trickier because you have to do the following calculation:
    Multiply your weekly number by 52 and then divide by 12 to get your monthly figure
  • Bi-weekly- these items occur every other week.
    Multiply this by 26 and divide by 12 to get your monthly amount
  • Quarterly- this happens every three months
    Divide this number by 3 to get monthly amount
  • Annually- this happens once a year
    Divide this by 12 to get your monthly amount.
The best thing to do if you are speaking with an attorney is to tell them how much you spend on each category and how often you spend that money.  An experienced bankruptcy attorney will  be able to accurately do these calculations for you.  They will also review your bank statements to confirm.
Another thing to consider is that there are plenty of items that you forget about that add to your monthly expenses.  Do you wear contacts?  Do you wear glasses?  Did you remember to budget for vehicle repairs?  Did you budget for furnace filters?  All these little items add up.  Know where your money goes.
Also, there are many budget tracking programs on the computer or smart phone that can be wonderful tools in helping you get your money under control.  Some tie directly to your bank account.  Others ask you to enter the expenses manually.  I like to use an old ledger book….but it’s probably time to go electronic.

 

Other bankruptcy lawyers talking about the letter B nationally are:

Bad Faith Filing: Miami Bankruptcy Attorney, Dorota Trzeciecka

Bailout:  Jacksonville Bankruptcy Attorney, Monica D. Shepard

Bank Account: New York Bankruptcy Lawyer, Jay S. Fleischman

Bank Account: Law Offices of Daniel J. Winter, Chicago Bankruptcy Attorney

Bank Account Levy: Philadelphia Bankruptcy Lawyer, Raymond Kempinski

Bank Tips: Wisconsin Bankruptcy Lawyer, Bret Nason

Bankruptcy: Taylor Michigan Bankruptcy Lawyer, Christopher McAvoy

Bankruptcy Estate: Metro Richmond Consumer and Bankruptcy Attorney, Mitchell Goldstein

Bankruptcy Mill: Chicago Bankruptcy Attorney, Kyle A. Lindsey

Bankruptcy Petition Preparers: Colorado Springs Bankruptcy Attorney Bob Doig

Bankruptcy Petition Preparers: Los Angeles Bankruptcy Law Monitor, Christine Wilton

Bar Date: Ormond Beach Bankruptcy Attorney, Lewis Roberts

Best Interest of Creditors: Honolulu Bankruptcy Attorney, Stuart Ing

Beware of these Credit Card Offers: Marin County Bankruptcy Attorney, Catherine Eranthe

Borrow: San Francisco Bankruptcy Attorney, Jeena Cho

Business: Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell

Business: Northern California Bankruptcy Lawyer, Cathy Moran

Business & Individuals: Philadelphia Suburban Bankruptcy Lawyer, Chris Carr

Business bankruptcy: Los Angeles Bankruptcy Blog, Mark J. Markus

Businesses and Business Debt: Newnan Georgia Bankruptcy Lawyer, Rick Palmer

Buy Low and Sell High: Cleveland Area Bankruptcy Lawyer, Bill Balena

Bankruptcy Timeline: Pittsburgh Bankruptcy Attorney Shawn N. Wright

Bankruptcy Abuse Prevention and Consumer Protection Act: Livonia Michigan Bankruptcy Attorney, Peter Behrmann

Best Efforts Test: St. Louis, Missouri Bankruptcy Attorney, Nancy Martin

A is for Advantages of Filing Bankruptcy

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How many advantages are there in filing bankruptcy?  Let’s count them….

  1. Bankruptcy ends harassing creditor phone calls
  2. Bankruptcy stops repossessions
  3. Bankruptcy stops foreclosures
  4. Bankruptcy stops wage garnishments
  5. Bankruptcy stops utility shut-offs
  6. Bankruptcy provides debt relief
  7. Chapter 13 Bankruptcy allows you to “cram down” how much you pay back on your car
  8. Chapter 13 Bankruptcy allows you to reorganize your car payment into a more affordable one
  9. Chapter 13 Bankruptcy allows you to lower a high interest rate on a vehicle loan
  10. Chapter 7 allows for redemption of your car where you pay what it’s worth.

    …Read More…

How much do I need to owe to qualify for a chapter 7 bankruptcy?

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There is no minimum you must owe to qualify for chapter 7 bankruptcy.  The two main questions you need to ask yourself are:

  • can I pay off my debts in a reasonable about of time?
  • does the cost of filing make sense for the amount of debt I have?
If you can pay your debts off in a reasonable amount of time then it does not make sense to file a bankruptcy.   Bankruptcy is a wonderful tool when someone needs the debt relief but isn’t good if he or she has the means to pay the debts back.
The other piece of the puzzle is whether the costs of attorney’s fees and filing fees exceed the amount of debt you have.  This might seem silly to state it so plainly but if your debts are less than it would cost to file a bankruptcy, then it doesn’t make sense to file.

 

Beware of On-Line Payday Loans/Cash Advances

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At least once a month, I receive a call from a client who took a payday loan online and his ID was compromised.  What happens next is that the collection calls start from collectors who violate every rule in the book.  The problem is that these collectors are not legit.  They usually have a thick accent and use a fake name that is very American.  (think John Williams)  They claim they are calling from official sounding places like the Department of Law and Enforcement.  (this does not exist)   When they call, they demand payment and threaten that the person will go to jail for check fraud.  And, they call…A LOT.

THIS IS A SCAM!

Please don’t send them any money.  A legitimate collector will send you proof of the debt in writing.  They will give you a real address where letters can be sent to them.  They will also tell you where they are calling from.  And, it’s a real place.

 

How to protect yourself:

  • don’t take out cash advances, especially on line
  • if you are receiving calls like this, do not give them any personal information especially your social security number
  • ask that they send you proof of the debt in writing.
  • tell your attorney they are harassing you
  • have your attorney call them

 

 

Friends Don’t Give Friends Bankruptcy Advice

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I sometimes think I’m a doctor.  I know I’m not but I (often) can’t resist sharing a natural remedy with anyone who will listen willingly (and unwillingly).  But, the truth is I never went to medical school.  I also did not go through rotations and residency.  I did not sit for boards.  And, I certainly do not know your medical history.  Giving medical advice without truly understanding how the pieces fit together can lead to bad results.  Would you ever not go to the doctor when your arm is falling off but instead ask your friends what they think you should do about it?  NO!  You would go to the doctor to see how to fix it.  You need a tourniquet but instead are asking around for a band-aid.

I Want to File Bankruptcy but My Spouse Doesn’t. What Should I Do?

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Good news.  You CAN file without your spouse.  Although your spouse does not need to file with you, you will need some of his or her information in order to complete your bankruptcy petition.  The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA ) requires that you include his or her income in the means test calculations.  The means test is based on the median incomes by family size as well as IRS standards.

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What to Expect at an Initial Bankruptcy Consultation

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Each person who is interested in filing bankruptcy with me must first come to a free consultation.  The purpose of  the meeting is:

  • to get to know each other
  • to review the case
  • to explain available options
  • to explain the process
  • to provide the required disclosures

…Read More…