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Dayton, Ohio Bankruptcy Attorneys - Cope Law Offices

Dayton Bankruptcy Attorney Personalized Debt Relief Solutions If you are overwhelmed by debt, you may feel as though no one can help you. However, there is help available, and the sooner you take advantage of it, the sooner you will find debt relief solutions. Speaking with a knowledgeable bankruptcy attorney is an easy first step …

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Chapter 13 Bankruptcy: More Affordable Than You Think

Chapter 13 Bankruptcy is Complex, But Can You Afford a Lawyer?

Chapter 13 bankruptcy is a complicated process which usually requires the help of an attorney. A recent study out of the Central District of California found that just 1 in 2,500 pro se chapter 13 cases in that district were successful. Why?

The forms and rules are complex and small mistakes have big consequences. An experienced attorney can help smooth the difficult process and minimize your stress. Of course, attorneys also have costs, and when you’re filing for bankruptcy you probably think that another bill is the last thing you need. Many folks we talk to don’t believe they’ll be able to afford bankruptcy, but they’re usually wrong. Bankruptcy attorneys understand that their clients are facing financial hardship, so does the court.

Chapter 13 is More Affordable Than You Think

It turns out that when filing for Chapter 13 bankruptcy, an attorney might be more affordable than you think. Instead of paying the entire fee upfront or in a balloon payment at the end of the bankruptcy process, you can include attorney fees in your Chapter 13 repayment plan and pay lawyer’s fees in installments as part of your bankruptcy.

When filing for Chapter 7 bankruptcy, attorneys will likely require full payment of fees prior to filing a case. This is not the case in chapter 13 bankruptcy, which allows the bankruptcy trustee to pay the attorney’s fees out of the bankruptcy estate each month. That means that not only can you pay your bill over time but you don’t have to deal with it separately at all. By default, the plan payments are subtracted from your paychecks (you may be able to set up a different method of payment with your trustee) and deposited into the bankruptcy estate. The trustee then makes distributions to creditors, including your attorney, every month.

Fee Structures Vary Based on Locale and Case

The “no-look” fee in Dayton for chapter 13 bankruptcy is $3,500. Your attorney may implement several different fee structures to pay this bill. For example, you may need to pay a small part of the fee up front. On the other hand, you may only be responsible for filing fees to initiate a case. The length of time over which the fees are repaid will vary based as well, but in the vast majority of cases, lawyer’s fees are paid as part of the Chapter 13 plan.

The way you pay your fees will depend on several factors, including the lawyer’s, judge’s, and trustee’s policies, the feasibility of your case, and local custom. If you feel that your attorney fees have been assessed incorrectly, you may have them reviewed by a judge.

Ask your attorney about fee structure and repayment plans. Legal help for the Chapter 13 process is more affordable than you think.

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Can I qualify for chapter 7 bankruptcy in Ohio if I don’t have a job?

Can I File for Chapter 7 Bankruptcy if I am Unemployed?

Yes, you can file for bankruptcy if you are unemployed. As we’ll see later in this post, it can actually be easier to file bankruptcy if you have low income.

Many people are hesitant to file bankruptcy. Yet, the whole purpose of bankruptcy is to help people get back on their feet financially. Times may never be tougher than when you are unemployed, so why not file? This article explains when you qualify for Chapter 7 bankruptcy during unemployment, and will help guide you toward an understanding of what will get you back on track.

However, this bankruptcy discussion is in general terms, and every bankruptcy case is unique. Therefore, it is advised that you consult an experienced bankruptcy attorney before taking any action.

Chapter 7 Bankruptcy

First and foremost, what is Chapter 7 bankruptcy? In Chapter 7, the court takes inventory of your property to see if there is anything of sufficient value to sell. This means that a bankruptcy trustee will be appointed by the court to review your assets. This doesn’t happen literally, the trustee won’t come to your home and look under the bed. They review the list of property you file with the court to see if there is any non-exempt property. Before you get too worried, its important to point out that most people emerge from bankruptcy with all of their property intact, including their home and retirement. Once it has been determined that you don’t have anything to give to creditors, the bankruptcy court then forgives the rest of your debts, and you get a fresh start. Chapter 7 bankruptcy is the most common form of bankruptcy because it is the quickest bankruptcy process, often taking only a few months.

For more information on Ohio bankruptcy laws, click here.

How Do I Qualify for Chapter 7 Bankruptcy?

The simple fact that you are unemployed NOW actually means very little in determining whether you qualify for Chapter 7 bankruptcy. What really matters is your income over the last 6 months. Chapter 7 bankruptcy employs what is known as the “means test,” which uses your income to determine whether you qualify.

Chapter 7 Means Test

The Chapter 7 means test compares your household income to the median (not the average) household income in Ohio. If your income is at or below the median income for Ohio, then you qualify for Chapter 7 bankruptcy. Thus, being unemployed may actually help you to qualify because you will have no income.

The means test only comes into play if your income is above the Ohio median for a household of similar size. If your income is below Ohio’s median, you’re presumptively entitled to file for chapter 7.

Note, however, that the income calculation uses your income over the past six months. Therefore, if you just lost your job, even though you have no current income, your income for the past six months may be higher than the median income of your state. In that case, it may be a few months before you qualify for Chapter 7 bankruptcy.

If you earn more than the Ohio media for a household of similar size, the the means test comes into play. There are a few situations where you may be able to file Chapter 7 bankruptcy even though you earn above the median:

  • Low Disposable Income: Disposable income is the money that you have left over after paying certain, “allowable” expenses (things like taxes and child support). If your income is low enough after allowable expenses have been subtracted, you may still qualify for Chapter 7 bankruptcy.
  • Special Circumstances: If you present one or more “special circumstances” to a bankruptcy court, you may still qualify for Chapter 7 even though your income is too high. There are a variety of special circumstances. Some examples include: high medical expenses, military service, or unemployment. Thus, your recent job loss may present a special circumstance.

Several sources of income in addition to your job income are taken into account when assessing your qualifications using the means test. Income from spousal or child support payments that you are receiving, worker’s compensation, tips, received annuity payments, and several other forms of income are included in the calculation.

Moreover, there are some forms of income that are excluded from the means test calculation. Examples of these sources include social security retirement and disability benefits.

Please note that calculating your income, disposable income, or special circumstances using the means test can be very complicated. To properly assess your qualifications, you should speak with an attorney.

See also: Do I Qualify for Chapter 7 Bankruptcy in Ohio?

What if I Don’t Qualify for Bankruptcy Under the Means Test?

If you do not qualify for Chapter 7 bankruptcy, then you may still be eligible for Chapter 13 bankruptcy. In fact, in many cases where the court disqualifies a person under Chapter 7, they may simply convert the case into a Chapter 13. In Chapter 13 bankruptcy, you pay off your debts over an extended period of time according to a “repayment plan.” Thus, if you have too much income for Chapter 7, that income can be put to use in following a repayment plan.

See also: Personal liability for business debts

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New Series: Five Dayton Organizations Doing It the Right Way

We’re Taking Notice of Some of Dayton’s Best

According to the Dayton Daily News, on average, Dayton residents give 4.6% of their discretionary income to charity. That’s more than any other city in Ohio!

Dayton businesses and non-profits have noticed the importance Daytonians place on philanthropy, and they’re making a point of giving back to the community. In this series, we’ll highlight five Dayton organizations whose efforts and mission deserve attention.

It might not be the biggest city, but there are a lot of great organizations in the Dayton area who are doing it the right way. To draw attention to some of Dayton’s best businesses and most important causes, we reached out and spoke to the people behind Dayton’s leading philanthropic and educational causes.

 

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How Does the Automatic Stay Work in Consumer Bankruptcy?

How Does the Automatic Stay Work in Bankruptcy?

What is an Automatic Stay?

If you are contemplating bankruptcy, then you probably have a lot of creditors after you. The constant pressure and hounding of creditors to collect can be troubling. However, the bankruptcy laws do provide some relief in the form of the “automatic stay.” Once a case has been filed, the automatic stay prevents your creditors form suing you to recover debts, and also prevents many other forms of collection attempts. The idea is to give the debtor, and the bankruptcy court, the opportunity to sift through the the assets of the bankruptcy estate. For example, once you file for bankruptcy, your mortgage lender cannot foreclose on your home, your auto lender cannot repossess your car, and your wages cannot be garnished. This protection lasts for the duration of your bankruptcy case unless your lender successfully motions the court to have it lifted.

Note, however, that there are some situations where the automatic stay does not apply, and, therefore, you will not be protected from actions by your creditors.

See also: The automatic stay and corporations

When does the Automatic Stay Begin?

In most cases, the automatic stay takes effect as soon as you file for bankruptcy, and it applies in both Chapter 7 and Chapter 13 bankruptcy cases. Because this stay is “automatic,” you do not have to take any action to request a stay other than filing for bankruptcy. Thus, as soon as you have filed, all of those annoying collection phone calls and letter must stop. Moreover, for the time being, your property is safe and cannot be taken by your creditors.

How Long Does the Automatic Stay Last?

The automatic stay lasts until the end of your bankruptcy case, unless your creditors are able to convince the court to “lift” the stay. The stay may be lifted, and therefore its protections removed, in a variety of situations. For example, if you have filed for Chapter 13 bankruptcy, but have not followed your repayment plan, then the court may lift the stay.

What Does the Automatic Stay Protect Me From?

The automatic stay prohibits all debt collection attempts while your bankruptcy case is pending, including:

  • Lawsuits: The automatic stay prevents your creditors from bringing a lawsuit to collect on your debts. The protection against lawsuits prevents new suits from being brought, as well as old suits from being continued. Thus, if you already have a lawsuit against you by a creditor, filing for bankruptcy may prevent that lawsuit from continuing during your bankruptcy.
  • Foreclosure: The automatic stay prevents your home form being foreclosed on during the bankruptcy proceedings. Hence, you will be able to remain in your home during the bankruptcy.
  • Collections Attempts: Most collections attempts by your creditors must cease with an automatic stay. Thus, you will stop being harassed by letters and phone calls.
  • Wage Garnishments: A wage garnishment is where your employer is required to withhold a portion of your pay, and send it to your creditors. However, the automatic stay prevents your wages from being garnished during bankruptcy.
  • Liens:  A lien on your property means than a person has an interest in the value of that property until a debt has been repaid. Actions to enforce an existing lien, or to obtain a new lien against your property must be halted once bankruptcy has been filed.

When Does the Automatic Stay Not Apply?

There are some situations in which the automatic stay is unavailable to you. The following examples are common situations in which the automatic stay does not apply, or may be limited in some way:

  • Multiple Bankruptcy Filings: If you have filed for bankruptcy within the last year, and your case was dismissed, then the automatic stay only lasts for 30 days. If you have had more than one bankruptcy case dismissed in the past year, then the automatic stay does NOT apply.
  • If you previously filed for Chapter 7 bankruptcy, yet the court has determined that you are ineligible for Chapter 7, and then you file for Chapter 13 bankruptcy, then the automatic stay does NOT apply.
  • Child Support: The automatic stay does NOT prevent actions brought against you to collect unpaid child support.
  • Taxes: The automatic stay does NOT prevent the IRS from coming after you for unpaid taxes during bankruptcy.

When the automatic stay applies, and the level of protections that it offers can be complicated to figure out. If you are considering filing for bankruptcy, and you wish to know more about how to best protect your things from creditors, you should consult with an experienced attorney.

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What Happens to My Car if I File Bankruptcy in Ohio?

What happens to my car if I file for bankruptcy in Ohio?

The answer to that question depends on two major factors: what type of bankruptcy you file and whether you own or lease your car.

Two different ways to file for bankruptcy…

Chapter 7 Bankruptcy

Although it’s referred to as a “liquidation,” most folks don’t lose any of their property in the Chapter 7 process, they shed their debts and get to start over with all their stuff. This is the case because exemption laws are in place to protect your property from the bankruptcy trustee.

In Ohio, the value of your interest in your personal vehicle is exempt up to $3,650.[i] You may also decide to apply all or part of the “wild card” exemption (which can apply to any type of property) to your vehicle. Ohio’s wild card exemption allows debtors to protect up to $1,225 property value.

Exemptions apply to your equity in your property, not the overall property value. Your equity in property is the value of the property minus outstanding liens. For example, if your car is worth $15,000 and you have a car loan for $10,000, your equity in the car is $5,000. In a chapter 7 case, your car is only at risk to the extent your equity exceeds the applicable exemption. In Ohio, that number is $3,225..[ii] For a list of other exemptions in the state of Ohio, visit this article.

Chapter 13 Bankruptcy

If you file for Chapter 13 bankruptcy, or “reorganization,” you file a petition with the court to stay debt collection (meaning that creditors can take no action against you for the duration) along with a plan for repayment of your debt over the course of three to five years. You must have a regular source of income to qualify for Chapter 13 bankruptcy. If you have non-exempt equity, you can protect your valuable assets, such as your car, more easily under Chapter 13 bankruptcy than Chapter 7.

In chapter 13 bankruptcy, the trustee doesn’t liquidate property with non-exempt equity. Instead, you pay the non-exempt value of your property as part of your repayment plan. This rule applies to cars.

If you own your car and have no car loan…

And file Chapter 7 bankruptcy:

In Ohio, the value of your interest in your car is exempt up to $3,650. If you own your car and have no outstanding loan, the value of your interest in your car is simply the value of your car. If your car is worth less than $3,650, it is completely exempt. If the vehicle is worth more than $3,650, the trustee of your bankruptcy will determine whether liquidation is worthwhile.  For example, if your car is worth $10,000, the trustee will likely decide to sell the car. He must then pay you the cash value of your exempt interest, or $3,650, and use the balance to pay your creditors. If, however, your car is worth $4000, the trustee will likely decide that it is not worth the time and expense necessary to sell the car and allow you to keep it.

And file Chapter 13 bankruptcy:

Chapter 13 does not involve seizure and liquidation of assets; if you own your car and have no outstanding loan, your plan payments will increase, but you will be able to keep the vehicle.

If you own your car and have an outstanding loan…

And file Chapter 7 bankruptcy:

Here the question is how much you owe on the car loan. If you owe $10,000 on a car that is worth $12,000, you can claim an exemption for the $2,000 of equity you have in the car.

Not sure if you’d like to keep your car? As a chapter 7 debtor, you have several options regarding your car. First, you can reaffirm your loan. Your creditor will require you to sign a reaffirmation stating how much you owe and the terms of payment. However, you should only reaffirm your loan if you’re very confident that you can continue to make payments. If you fail to keep up with the payment schedule going forward, your finance company can repossess your car and sell it at auction. If they receive less than the value of your loan at auction (which is usually the case), you are still responsible for repaying the remainder.

Another way to keep your car is to redeem it. This may be a good option if you owe more than the car is worth, but you must pay with a lump sum, which may be difficult. To redeem your car, you must pay the fair market value of the vehicle. For example, if you own a car worth $6,000 but owe $12,000 on it, you can pay your creditor $6,000 and keep the car free of the old lien.

The third option is to simply surrender the vehicle. You will no longer have a car, but you will also no longer have a car loan to worry about. This may also be a good option if you owe more on your car than your car is worth.

And file Chapter 13 bankruptcy:

Under Chapter 13 bankruptcy, if you keep up your payments you can keep your car. Your creditor may require you to sign a reaffirmation agreement.

If you have fallen behind on your payments, working out a payment plan with your creditor will be a part of the Chapter 13 proceedings. If you purchased your car within 30 months of filing for bankruptcy, you will owe the full value of the car. If you bought your car more than 30 months before filing, you will have to repay only the present value of the car. So, if you own a car worth $5,000 but owe $8,000, you only have to repay $5,000. This is called a “cram down.”

If you lease your car…

And file Chapter 7 bankruptcy:

You can decide whether to surrender the lease. If you’d like to get out from under the monthly payments, you can return the car and your debt will be discharged. The dealership has no right to come after you for future payments or late fees.

And file Chapter 13 bankruptcy:

You can assume the lease and keep making monthly payments; as long as you do you can keep your car.

You can also surrender the lease. The creditor will sell the car and apply the proceeds to your debt. If you owe more than the value of the car, you will be required to pay the difference. That debt will be discharged under your Chapter 13 payment plan.

What if my car has already been repossessed?

If the creditor has already sold or disposed of your car, you have no recourse. If, however, the creditor has repossessed the vehicle but has not yet disposed of it, you can demand that the car be returned. If the creditor has not sold the vehicle, it is still a part of your bankruptcy estate and the automatic stay protects your right to possession of the car.[iv]

See also: What Property Can I Keep in Chapter 7?

[i] R.C. 2329.66(a)(2).

[ii] R.C. 2329.66(a)(17).

[iii] In re Miller 427 BR 616.

[iv] In re Curry 347 BR 596.

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Ohio Bankruptcy Laws: What Property Can I Keep in Chapter 7?

Ohio Chapter 7 Bankruptcy: What Happens to My Property?

If you are considering bankruptcy, you have probably found yourself wondering exactly what, if any, property you own can be taken to pay your creditors. In a bankruptcy case, your property is held in an estate that is managed by a trustee. Theoretically, the trustee is the person responsible for selling off your property and using the money to pay your debts. However, most people who file for Chapter 7 find that they keep all of their property because it is exempt. Exempt property is anything you own that the trustee cannot sell to satisfy your obligations. In other words, when an exemption applies, you get to keep your stuff.

How Bankruptcy Works in Ohio

When you file for bankruptcy in Ohio, you must use the Ohio bankruptcy laws to protect your stuff. All states have their own bankruptcy systems, but some will also allow you to choose the federal system. In Ohio, you do not have that option (it doesn’t make much of a difference because Ohio laws are more favorable to consumers).

If you file for Chapter 7 bankruptcy, a trustee will assess the value of all of your property, and will determine what things are exempt. Then, the trustee will sell all of your non-exempt property (this happens rarely), and give the money to your creditors. After your nonexempt property has been sold, and your creditors have received the proceeds, all remaining debts are then forgiven or discharged.

If you file for Chapter 13 bankruptcy, your lawyer will help you work out a payment plan with your creditors. In this form of bankruptcy, exempt property helps the trustee determine exactly how much you can afford to pay your creditors. Rather than liquidating nonexempt property like in a chapter 7, debtors keep their property in chapter 13 but pay the nonexempt amount as part of their monthly payment.

See also: Can I qualify for chapter 7 bankruptcy?

Therefore, regardless of whether you file for Chapter 7 or Chapter 13 bankruptcy, you will need to understand exactly what things you own are protected. In order to thoroughly understand your bankruptcy case and provide yourself the best protection possible, you should consider speaking with a bankruptcy attorney.

Bankruptcy Exemptions in Ohio

Listed below are some of the most common bankruptcy exemptions utilized in Ohio.  If you are married, then you should know that married couples are allowed to “double.” Doubling means that each of the amounts listed below can be applied up to its maximum for the property each spouse. For example, you and your spouse may each exempt your own car up to the full exemption amount.

These amounts refer to the equity value of the asset. The equity value is the amount that the piece of property is worth in liquidation. The “liquidation value” of an asset is the amount that the asset is worth after any liens on the asset are subtracted. For example, if a home worth $100,000 has a $25,000 lien on it, then the home’s liquidation value is $75,000.

  1. Homestead Exemption: Up to $125,000 of equity in your home is exempt
  2. Motor Vehicle: Up to $3,675 of value in a motor vehicle is exempt
  3. Cash: Up to $450 of cash that you currently have is exempt.
  4. Household Goods: Up to $575 of value in any household item is exempt, for a maximum of $12,250 total value of household goods. This means multiple items can be protected up to $575 a piece, but the total after adding up those items cannot exceed $12,250.
  5. Jewelry: Up to $1,550 total value for jewelry is exempt. This means $1,550 for ALL of your jewelry, not per item.
  6. Tools of Trade: Up to $2,325 is exempt. The “tools of the trade exemption” refers to property that is used for a person’s profession or business.
  7. Life Insurance: The full amount of your life insurance policy is exempt
  8. Burial Plot: The full amount of your burial plot is exempt.
  9. Workers’ Compensation: Workers’ compensation benefits are exempt.
  10. Unemployment Benefits: Unemployment benefits are exempt.
  11. Retirement Plan: Almost all forms of retirement plans are exempt up to their full amount.

What Else Should I Know?

Again, these are only the most common exemptions that apply in a bankruptcy case. However, every situation is different, and you need to understand the aspects of your unique case.  Bankruptcy is a difficult, and often frustrating process, especially if you are inexperienced in this area. Therefore, you should consider speaking with an experienced bankruptcy attorney before filing your case, selling any of your property, or attempting to negotiate with your creditors.

See also: Bankruptcy in Ohio: What You Need to Know