There may be many reasons why you may decide to file for bankruptcy relief. The most common way that bankruptcy helps is by eliminating overwhelming unsecured debt. Medical debt, credit cards, personal loans, and old utility bills are examples of unsecured debt. Medical bills may have been piling up. Credit card bills (and their outrageous interest rates) may have become too arduous to pay off. Perhaps you are trying to keep your house or car.
The rules that apply to both Chapter 7 and Chapter 13 bankruptcies in Columbus should be applied to your specific situation to determine which option may be better for you. A Chapter 7 is a “fresh start”, where 100% of your unsecured nonpriority debt is discharged. A Chapter 13 bankruptcy helps you reorganize your debts, including tax debt and student loans. Bankruptcy can also help you end lawsuits, wage garnishments, and judgment liens.
In chapter 13 bankruptcies only, a debtor may be permitted to avoid or “strip” the second mortgage (and any other subordinate mortgage liens) if the appraised value of their primary residence is less than the pay-off balance of their first mortgage.
Assuming that you qualify for a Chapter 7 bankruptcy in Columbus, or anywhere in Ohio, and that the equity in your home can be protected, then in order to keep your primary residence, you must be current on your mortgage(s) payments at the time of filing the bankruptcy petition. If so, then you will reaffirm that secured debt by completing a reaffirmation agreement. You will continue making your mortgage payments to the creditor in the same amount and at the same interest rate.
Assuming that you qualify for a chapter 7 bankruptcy and that the equity in your vehicle can be protected, then in order to keep your vehicle, you must be current on your auto loan payments at the time of filing the bankruptcy petition. If so, then you will reaffirm that secured debt by completing a reaffirmation agreement. You will continue making your loan payments to the creditor in the same amount and at the same interest rate. Another option involves Redemption. In certain cases, you may be allowed to “refinance” or redeem your auto loan based on its fair market value as opposed to the existing pay-off balance.
A case-by case analysis must be performed to give you the specific answer for your specific situation. However, there are some general principles that may be helpful to you. In Chapter 7 cases, assets with no equity can be kept by the debtor as long as the payments to the secured creditor are current. There are state of Ohio exemptions that may be applied to the equity in your property to reduce what the bankruptcy court would otherwise consider as equity in your property. In Ohio, for example, there is an automobile exemption that protects $3,775.00 of equity in 1 vehicle. Also, there is a “wild card” exemption for each debtor in the amount of $1,250.00 that can be applied to any asset’s equity. These exemptions are effective as of April 1, 2016. Our attorneys will also discuss with you reaffirmation agreements and redemption options.
Yes. You will start receiving credit card offers soon after filing your bankruptcy case. You will see of course higher interest rates on these credit card offers.
A Chapter 7 bankruptcy discharges 100% of your unsecured non-priority debt (i.e. medical bills and credit cards); whereas, a chapter 13 bankruptcy discharges a percentage of your unsecured non-priority debt upon successful completion of your Chapter 13 plan of reorganization. Chapter 7 is the true “fresh start” bankruptcy and it takes about 4-5 months to complete after filing. A Chapter 13 helps you reorganize your debts based upon your current financial ability. A Chapter 13 payment plan ranges from 3 to 5 years. In Chapter 7 cases, we discuss with you reaffirmation agreements and redemption options. In Chapter 13 cases, we discuss with you proofs of claim and priority of debts.
The bankruptcy court will deny a discharge in a later chapter 7 case if the debtor received a discharge under chapter 7 in a case filed within 8 years before the second petition is filed. In other words, you can’t file a chapter 7 bankruptcy if you filed a chapter 7 in the last 8 years. There are other rules that apply for filing Chapter 13 cases. Our bankruptcy lawyers will review with you whether you may be permitted to file a bankruptcy case given that you previously filed for bankruptcy relief.
A debtor is ineligible for discharge under chapter 13 if the debtor received a prior discharge in a chapter 7 case filed within the last 4 years before the current case. If you received a prior discharge in a chapter 13 case, then you cannot file a later chapter 13 case, unless 2 years has lapsed since the date of filing the first chapter 13. There are other rules that apply, and our attorneys will review your specific situation and inform you whether you may file a current bankruptcy case.
Along with other eligibility requirements, you must pass the “means test” in order to obtain chapter 7 bankruptcy relief. The bankruptcy court will look at the number of members in your household. You household size is then assigned an income threshold amount that determines your qualification. If your gross household income falls under that income threshold amount, you qualify for chapter 7 protection. Even if your income is over that income threshold amount, you may still qualify under the “extended means test”. Our Bankruptcy Lawyers will review your specific situation and help you determine whether you qualify under the “means test” for Chapter 7 bankruptcy relief.
The overall cost to file a Chapter 7 bankruptcy generally ranges from $1,200 – $1,600.
At Sheppard Law Offices, bankruptcy Attorney Ken Sheppard and his team charge a fixed fee for both chapter 7 and chapter 13 bankruptcy cases. At your free initial consultation, our bankruptcy lawyers will share with you our attorney fees, filing fees, and other related costs. In all cases, to start the bankruptcy process in our office, the retainer is $400.00. This $400.00 retainer allows you to refer those annoying creditor calls to Sheppard Law Offices.
When you become a client, we discuss certain actions you should and should not do. We execute a written fee agreement and we will customize a two page “to-do” list for you. Our process is streamlined to make your experience as easy as possible. We will discuss with you how you may defer filing fees in Chapter 7 bankruptcy and Chapter 13 bankruptcy cases. We will discuss with you how you may defer a portion of your attorney fees in Chapter 13 cases. We also offer payment plans, where you are in charge of your payment plan.
We offer payment plans, and you dictate when you pay! Attorney Sheppard’s policy does not put any time pressure on you to pay off your bankruptcy costs and attorney fees. However, be aware that no work is performed on your bankruptcy case until payment has been received in full. Each month, Sheppard Law Offices normally sends to you a letter or email reminding you of your outstanding balance.
Your spouse does NOT have to file with you. There may be reasons why he or she should file with you, but that would be determined on a case-by case basis. Be aware that although your spouse may not be filing with you, his or her income and expenses is still needed for completion of the means test and for the appropriate petition schedules.
Yes. About 30 to 45 days after you file your bankruptcy case, you will have to appear at the Section 341 Meeting of Creditors. This hearing is held in both chapter 7 cases and chapter 13 cases. This hearing is not in front of a judge; instead, it is in a setting before a trustee, who is appointed by the bankruptcy court. The hearing will last about 5 to 10 minutes. Either Attorney Sheppard or Attorney Archer will be with you at that hearing. It is not an adversarial proceeding, so you don’t have to be worried. Creditors are permitted to attend but they do not normally appear. The trustee’s job is to ask questions to confirm certain portions of the petition you filed. Our lawyers will already have discussed with you the issues and questions that may be raised by the trustee, and our staff will already have submitted all of your required paperwork to the court and the trustee before the Meeting of Creditors.
When your bankruptcy case is electronically filed, an automatic stay goes into effect. This means that all collection efforts by creditors must stop during your bankruptcy. Lawsuits are suspended, foreclosures are halted, and creditor telephone calls cease. The bankruptcy court takes the automatic stay very seriously. No creditor wants to violate the automatic stay as sanctions may be imposed by the bankruptcy court.
A debt that is tied to an asset is a secured debt. For example, a mortgage is a secured debt because that debt is tied to the real property. Another example of a secured debt is an auto loan. On the other hand, credit cards, personal loans, signature loans, old utility bills, and medical bills are examples of unsecured debts. In bankruptcy, if you decide to surrender a secured debt, then that secured debt automatically becomes an unsecured debt.
Creditors can technically attempt to collect a debt by following certain procedures up until the time you file your bankruptcy case. At the time you file your bankruptcy case, the automatic stay will then prevent creditors from contacting you. At Sheppard Law Offices, once you retain Attorney Sheppard or Attorney Archer, you may then refer those creditor calls to us.
No. Certain debts are not dischargeable. Secured debts that you reaffirm in a chapter 7 case are not dischargeable. In chapter 7 cases, 100% of your unsecured non-priority debts are dischargeable. Student loans, tax liabilities, and other government obligations are generally not dischargeable. In chapter 13 cases, upon successful completion of your chapter 13 plan, the remaining unsecured non-priority debt is dischargeable.
Your course of action will depend on your bankruptcy strategy. There are several factors that may determine when you file for bankruptcy; therefore, consult with Attorney Sheppard or Lawyer Archer to confirm the appropriate measures to take when you are named as a Defendant in a lawsuit. You have 28 days from the date you were served with the summons and complaint to file an Answer. Speak with one of our bankruptcy attorneys for assistance in filing an Answer and what to expect in that civil lawsuit.
If you are facing bankruptcy in Columbus, contact the bankruptcy attorneys at Sheppard Law Offices today!
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Where are the Newark, Mount Vernon, Canton, and Columbus, Ohio Bankruptcy Law Offices located?
Ken Sheppard and his team of Columbus bankruptcy attorneys proudly serve the entire Columbus area with locations in Downtown, Hiliard, Mt Vernon, Newark, Akron & Canton. To get in touch and schedule your free 30-minute consultations, please free to to call us toll-free at 866-770-2190 or choose the most convenient location for you below.