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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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New Ohio Homestead Exemption Provides More Protection for Homeowners

Homestead exemptions have been enacted in most states to protect homeowners from their creditors. Outside of bankruptcy, a homestead exemption protects your primary residence from judgment creditors. Inside the bankruptcy process, the homestead exemption prevents the trustee from selling your home to satisfy creditor claims. The basic idea behind the homestead exemption, and exemptions in general, is that creditors shouldn’t be able to take everything you have, your home being no exception.

Ohio’s Homestead Exemption Just Got A Lot Bigger!

As of March 27, the Ohio homestead exemption is now $125,000, which represents a 500% increase from the previous homestead number of $21,625. Married couples filing a joint bankruptcy case can double the exemption to protect up to $250,000 of home equity in a primary residence.

How It Works

The homestead exemption applies to equity, not overall real estate value. You can calculate home equity by subtracting any outstanding mortgage balances from the appraised value of your home. Need an example?

Let’s say you and your wife live in Dayton and jointly owe a judgment creditor $1,000,000. You own a home also worth $1,000,000 that has a mortgage lien of $850,000. Your home equity is $150,000. Due to the judgment as well as other debts, you and your wife file for chapter 7 bankruptcy.

In the example above, you’ll be able to file bankruptcy, shed all of your unsecured debts, and still keep your home.

Why? How?

Because Ohio’s new homestead exemption allows married couples to protect up to $250,000 of equity in a primary residence. With only $150,000 of equity in the example above, you’re in the clear despite the fact that your house has an appraised value of $1,000,000.

What Happens if the Cards Fall the Other Way?

For the sake of discussion, let’s say your home equity was $500,000 instead of $150,000. What then?

Well, in this example, the trustee would sell the home, but you and your wife would be entitled to the amount of your exemption. After the home was sold, you’d be receive a check for $250,000. The rest would go to your creditors.

What Happens if it’s a Close Call

Let’s change the facts again and say that your home in Dayton has $257,000 of appraised equity, putting you only $7,000 over the limit. Do you lose the home?

Absolutely not.

Trustees don’t want to sell your home. It causes them to incur costs and takes valuable time and money. In cases where equity barely peeks out over the exemption limit, it is almost always possible to negotiate a cash settlement with the trustee and keep your home.

A Word About Investment Property

It is important to understand that the Ohio homestead exemption applies only to primary residences, investment property is not protected. The facts of each case matter, but a primary residence can usually be defined as a home that you live in everyday. The place where your groceries are kept, where you put the kids to bed, where the paper is delivered. You get the idea. The house at the lake that you visit every other weekend is not your primary residence.

If you’re unsure as to the status of your real estate under the law, consult a lawyer.

See also: What Property Can I Keep in Chapter 7?, Can I Keep My House and Car if I File for Bankruptcy?

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Can Debt Collectors Harass and Call Me in Ohio? What Are My Rights?

Debt Collector Laws OHIt’s dinner time and the phone is ringing…again.

You told the jerks to stop calling but it didn’t do a bit of good. Your phone is ringing off the hook. The kids want to know what’s up. Even your Mom is receiving calls. Stress levels are rising, and fast.

Is this legal? Can debt collectors ruin your life over a past due credit  card bill?

The answer is no, debt collector harassment is not legal. Whether you’re in Ohio or another state, there are laws in place to prevent bill collectors from taking things too far, but you’ll need to pay attention to the rules if you hope to win the war. I’ve assembled a cheat sheet of sorts below that lays out the rules for fighting back against the debt collection machine.

The Fair Debt Collection Practices Act (FDCPA)

The FDCPA is a federal law that governs the behavior of the debt collection industry by preventing and punishing behavior that rises to the level of harassment. Its protections are powerful. However, before we delve into the particulars, I should mention that the FDCPA only applies to debt collectors pursuing consumer debts, it does not apply to the original creditor.

What does this mean?

It means that if the party you originally borrowed money from is harassing you, you won’t have recourse under the FDCPA. In order to trigger federal protection, your debt must have been sold to a third party debt collector. A common scenario in the debt world unfolds something like this: you borrow money on a credit card or some other unsecured loan. You fall behind on payments. The creditor send letters and tries to collect, but gives up after 6 months or so. They “write off” your debt, meaning they no longer count on it as a performing asset. To recoup some of their investment, they sell the debt to a debt collector. The debt collector either pays a small fraction of the loan for the rights to collect the whole note, or take a percentage of what they collect if they can get some money out of you.

Now you see why they’re so eager to get cash out of you. Their business is getting “hopeless” past due accounts to pay up. With that background out of the way, we can now get into the details of what exactly the FDCPA prevents bill collectors from doing.

– Debt collectors are prohibited from making false or misleading statements to collect a debt. The 11th Circuit Court of Appeals has recently ruled that there is no such thing as a harmless debt collection lie.

– Debt collectors cannot communicate about a debt at an unusual time or place. This means no calling early in the morning (before 8am) or late at night (after 9pm).

– Once a debt collector knows you are represented by an attorney, they must communicate with your attorney, not with you. Similarly, debt collectors can only communicate with a third party, like a friend or relative, if necessary to ascertain your location. If they already know how to contact you, then communicating with a third party is a violation of the FDCPA.

– Debt Collectors are prohibited from making threats while collecting a debt. This is a big one as debt collectors are often abusive, especially over the phone.

You’ve Identified a Violation, Now What?

Well, for starters make sure it’s well documented. Remember that you’ll be required to prove the FDCPA violation in court. Some states, like New York, only require the consent of one party before recording a phone call. In these situations, you can legally record a threatening debt collector and offer it as evidence.

In other cases, such as when a debt collector is illegally communicating with a third party, your fax machine will be your best friend. Let’s say you’ve told a debt collector to stop calling, but they ignore you. Hiring an attorney to handle the matter will only trigger FDCPA protection if it’s communicated in writing. In other words, if a debt collector is harassing you, make sure you can prove that the behavior took place, you asked repeatedly for it to stop and you did so in writing.

Once you’ve assembled evidence of an FDCPA violation, contact a lawyer, this is where the fun begins.

Penalties For Violating the FDCPA

In addition to attorney’s fees, the FDCPA allows debtors to collect actual and statutory damages from debt collectors who violate its terms. As a practical matter, actual damages are likely to be limited. Aside from emotional distress, debt collectors who behave poorly are mostly a nuisance, they rarely cause economic damage. In recognition of this, Congress allows for $1,000 of statutory damages each time a bill collector violates the FDCPA. This means that if you can prove that a debt collector violated the FDCPA, you’ll be entitled to $1,000 and your attorney will be able to recover her expenses as well. All in all, not a bad way to teach those pesky debt collectors a lesson huh?

Other Considerations: Statute of Limitations and Filing for Bankruptcy

Be aware that the time limit within which a claim for damages under the FDCPA must be brought is one year. Regardless of the evidence you assemble, after the statute has run, you will not be able to file suit.

Another thing to keep in mind is bankruptcy. While bankruptcy is a last resort for most folks, it offers powerful protections against debt collectors and collection lawsuits. Once a bankruptcy case is filed, a court ordered injunction called the automatic stay goes into effect which prevents all creditors from contacting you for any reason. The automatic stay protects against collection calls, lawsuits, foreclosure, garnishment and any other type of collection activity a creditor can possibly throw at you.

See also: How Does the Automatic Stay Work in Consumer Bankruptcy?