Chapter 13, also known as the “wage earner’s plan,” is a form of consumer debt reorganization that allows debtors to restructure payments by combining many debts into a “plan.” Debtors then make one monthly payment for all of the debts included in the plan to the Chapter 13 trustee. For more detailed information about Chapter 13, click here
*The law requires that we tell you that we are a debt relief agency.
We help people file for Bankruptcy Relief under the Bankruptcy Code."
At FORBES LAW LLC, we will help relieve your financial stress.
A bankruptcy discharge is the prize for a bankruptcy debtor. It comes 60 days after the meeting of creditors in most chapter 7 cases and at the end of the plan payments in chapter 13 cases. A discharge discharges the debtor from the legal obligation to pay his or her debts. However if you want to pay a debt if you feel a moral obligation the bankruptcy code expressly permits you to voluntarily repay a debt.
I have clients often say to me that they don’t want to discharge a particular debt and therefore don’t want to list it but the bankruptcy code requires that you list all your assets and all your debts. The bankruptcy code also provides that you can voluntarily repay a debt after discharge. It is important to know that there are some types of debts which are not dischargeable. For example, support obligations and most obligations arising from a divorce are not dischargeable. Most federal taxes are not dischargeable. Most state and local income taxes are not dischargeable. Student loans generally are not dischargeable. Certain other debts such as those that are procured by fraud or have to do with theft or larceny are not dischargeable. Those debts though have to be proven to be non-dischargeable. They are not automatically non-dischargeable and if you have a situation like that we at FORBES LAW will explain it to you. Finally, most governmental fines and penalties are not dischargeable. So merely because you are awarded discharge doesn’t mean that those non-dischargeable debts are necessarily discharged.
The Reward - DISCHARGE
If you are contemplating filing Bankruptcy, there are several things that you should avoid doing:
~ use any of your credit cards, obtain cash advances, use convenience checks, or do balance transfers on your credit cards
~ pay loans to family or friends.
~ leave assets off your Bankruptcy Petition.
~ fail to let your attorney know if you are getting a substantial tax refund.
~ fail to let your attorney know if you are about to receive an inheritance or large insurance settlement.
~ try to hide income from your small business.
~ sell, transfer or give property to anyone without talking to your Bankruptcy Attorney.
~ cash out retirement plans or 401k’s.
~ take out a second mortgage.
~ hide assets or debts.
~ take out "payday loans."
~ fail to list debt to family or other "insiders."
~ write bad checks.
~ forget to tell your Bankruptcy Attorney about liens you may have on your home so they can be avoided.
~ make major financial decisions without consulting a Bankruptcy Attorney.
~ misrepresent any facts to your Bankruptcy Attorney or the Bankruptcy Court.
~ incur more debt once you have considered bankruptcy as an option.
If you are considering bankruptcy you are most likely thinking of a chapter 7. Chapter 7 is what most people mean when they say they want to file a bankruptcy. Chapter 7 is considered to be a bankruptcy but basically is what that means that any non-exempt assets you have will be liquidated and those funds paid over to your creditors in proportion to their claims. I don’t want you to necessarily be too concerned about the liquidation asset. Most assets are exempt and therefore will not be liquidated. There is an article in this series on exemptions and if you wish you may also go to the internet and check Ohio Revised Code Section 2329.66 for the exemptions.
In exchange for liquidation of non-exempt assets, the debtor receives a discharge. That is the debtor is excused from paying his or her dischargeable debts. And of course the phrase dischargeable is the key. If you are concerned that you may have a non-dischargeable debt, that will be something that we can talk about. Common non-dischargeable debts are certain taxes, support obligations, divorce obligations, most student loans and the like. As we contemplate a chapter 7 bankruptcy we here at FORBES LAW will determine whether you have non-dischargeable debts and advise you thereon. For example, if you have $100,000 in dischargeable debt and $10,000 in non-dischargeable debt it may be the best strategy to file a chapter 7 case, discharge the dischargeable debt and work out the non-dischargeable debt after bankruptcy. This often happens with non-dischargeable taxes. Discharging credit card or other dischargeable debt may put you in a position where you can more easily enter into an installment agreement with the Internal Revenue Service to take care of your non-dischargeable taxes.
Another thing to consider in looking at a chapter 7 is whether or not you can pass the Means test. The Means test is essentially a test to determine whether you are too rich for chapter 7. It is in some ways a mathematical formula. There are three analyses we use in determining Means test issues. The first one is whether your income exceeds the median income in this state for your family size. If it does not then you automatically pass the Means test. Assuming you do not pass the Means test because of your income there is a mathematical formula which we will go through which takes into account your income and expenses including your mortgage and car expenses and even if you don’t pass the Means test based on median income you may pass it based on a calculation. The third way to analyze the Means test is special circumstances. You may have special circumstances that will override the Means test calculation. For example, if you have extremely high medical costs and will likely have extremely high medical costs in the future that may be a special circumstance that would allow you to pass the Means test even if you do not pass it based on a calculation or the median income portion of the test.
In any event, at FORBES LAW we will do the calculations needed to determine whether or not the Means test will allow you to do a chapter 7 case. I say allow because if you do not pass the Means test your filing will be presumed to be an abuse of the bankruptcy system. Although there are ways to contest your filing being an abuse of the bankruptcy system we don’t want to get there unless we have to.
Glenn E. Forbes, Esq. has over forty (40) years of legal experience including substantial experience in the Bankruptcy law area. We do not make our living by mass-producing Chapter 7 bankruptcy filings. We don't strive to file thousands of cases like other firms in the industry do. We provide individualized services to each client, and we are more than qualified to handle the more complex Chapter 7 and Chapter 13 cases that other firms and attorneys simply won't touch.
The first thing someone in your shoes you must realize is that you are not alone. No one wants to grow up to be a bankruptcy debtor. Things happen. The recent downturns in the economy are a critical part of the recent bankruptcy filings across the United States. Thousands of people have lost their jobs. Thousands of businesses have closed. This causes a 'trickle-effect.' Thousands of people have experienced medical issues that prevent them from working. In many of these instances, bankruptcy is the only way to stay afloat, and the option of bankruptcy is provided for that reason.
The most important piece of information that Debtors must realize is that they should only follow the advice of a licensed attorney.
Chapter 7 Bankruptcy, or liquidation, permits you to eliminate as much debt as possible while retaining exempt assets.
Chapter 11 Bankruptcy allows for business reorganization, permitting the business to settle its outstanding obligations over time and in accord with its cash flow, while the business continues to operate.
Chapter 13 Bankruptcy permits you to set up long term repayment plans with creditors and avoid, in many cases, burdensome interest charges.
STOP CREDITOR HARASSMENT!
Every person and in fact every bankruptcy debtor has certain property that they can hold exempt from their creditors or a bankruptcy trustee. In other words, there are things that neither your creditors nor your bankruptcy trustee can take away from you. Every bankruptcy debtor is entitled to exemptions. Some in other states are entitled to federal exemptions. However here in Ohio we must use the Ohio exemptions. For those of you who like to read statutes they are set out in Section 2329.66 of the Ohio Revised Code.
The most common exemptions, the ones that most people are concerned about I will briefly discuss. The first is the homestead exemption or an exemption for equity in your home. The current homestead exemption for each person is $145,425. To show you how that works, if you have a free and clear house worth $140,000, neither your creditors nor the bankruptcy trustee can take it away from you. If you are married and have a free and clear $280,000 house neither the bankruptcy trustee nor your creditors can take it away from you. If you have a $500,000 house titled in your names as a married couple with a $100,000 mortgage your equity in that house would be exempt.
The second exemption most people are concerned about is motor vehicles. A motor vehicle exemption is $4000 for one motor vehicle per debtor so if you have a free and clear motor vehicle titled in your name worth $3500 neither the bankruptcy trustee nor your creditors can take that away from you. Similarly if you have a $10,000 car and a $6500 lien on it that equity is protected by your exemption.
You also have an exemption for cash or money in the bank up to $500 so neither your creditors nor the bankruptcy trustee can take your last $500.
Your household goods and furnishings are also exempted. Each person can exempt $625 per item up to a total value of $13,400. If you think about the value of used household goods most people don’t have nearly $13,400 in household goods.
The jewelry exemption is $1700. Again, thinking about the value of used jewelry most people’s jewelry is exempt.
For bankruptcy debtors only there is a wild card exemption of $1325. Something that is not covered by your other exemptions may be exempt up to a value of $1325.
If there are exemption issues in your situation we here at FORBES LAW will explain those issues to you more fully; just give us a call.
It’s much like a Chapter 13 bankruptcy, except for business entities like LLC’s or corporations. Usually, Chapter 11 cases do not involve a trustee, and the debtor acts as the trustee for the business. Businesses acting as trustees are considered “debtors in possession.” Appointment of a trustee requires some wrongdoing or gross mismanagement on the part of existing management and is relatively rare.
The Goal is to Restructure:
Chapter 11 cases restructure businesses with the aim in mind of making the business viable again. Often, this means refinancing some debts and avoiding others. As with other cases, the “automatic stay” protects the business from its creditors. Litigation against the debtor is stopped and settled by the Bankruptcy Court, or allowed to resume in adversary proceedings.
At FORBES LAW LLC, we pride ourselves in the fact that, due to our extensive experience in the bankruptcy field, we are willing and able to undergo even the most complex bankruptcy case, including Chapter 11.
If you are in need of a business restructure, or would like further information, please do not hesitate to contact us.
If we are filing a bankruptcy case on your behalf, the only methods of payment we are permitted to use are debit cards, cash, checks or money orders.
The procedure in any bankruptcy case is somewhat similar. The first "piece of the puzzle" is information gathering. At FORBES LAW LLC, we pride ourselves in obtaining the documentation and verification that will eventually be requested by the Trustee. If complete information is not provided by the Debtor, the case cannot proceed.
HELPFUL STEPS TO A SUCCESSFUL BANKRUPTCY
Retain FORBES LAW LLC so that we may begin working on your case. Once you pay your retainer fee, you can refer creditor calls to our office. We will also be in a position to start analyzing your financial situation and begin the initial drafting of your petition and schedules.
READ your Fee Agreement and ALL correspondence you receive from our office. Be familiar with the terms of our contract, document requirements and payment arrangements.
Provide and update ALL requested documentation in a timely manner. The speed and efficiency of your bankruptcy filing depends on you.
Make timely payments towards the balance of fees and costs as indicated in your Fee Agreement so that we can timely file your case with the U.S. Bankruptcy Court.
Complete the first session of credit counseling upon instruction from the paralegal
Upon receipt, review the initial draft of your petition and schedules completely, and provide any changes or corrections to the paralegal PRIOR to your signing appointment
*your case will not be scheduled for filing until all of these requirements have been met.
If you have questions about our Fee Agreement or procedure, please contact Cecily A. Renzi, Paralegal at 440-739-6211, extension 130 or email@example.com
At FORBES LAW LLC, we strive to provide timely service to all of our clients. Generally, if you provide us with all of the required information, payment of fees and costs and complete the first session of required credit counseling, we will have your case prepared to file in as little as a day or two. The timing is up to you.
It is important, however, that you do not wait until the last minute to contact us, as sufficient time is needed to accurately analyze and prepare your case.
A voluntary bankruptcy is commenced when you file a petition with the Bankruptcy Court requesting protection from your creditors under Chapter 7 or Chapter 13. A husband and wife may file one petition together and commence a joint case.
What you should bring when you come to see us
The Bankruptcy Reform Act of 2005 has suggested that bankruptcy practioners provide reasonable back up or proof of a Debtor's financial situation. Therefore, as part of our due diligence, each Debtor is required to provide the following information to our office so that we can verify your assets and liabilities prior to filing your case with the U.S. Bankruptcy Court:
~ Legible copies of paystubs that you have received for the six (6) months prior to filing your case. Additional paystubs may be required if delays occur in the preparation of your case.
~ Legible copies of ALL bank statements for the six (6) months prior to filing your case for each account that a Debtor maintains.
~ Legible copies of ALL retirement, 401k, pension, annuity, or other financial statements for the last six (6) monthsprior to filing your case for each account that the Debtor maintains.
~ Legible copies of ALL life insurance policies owned by the Debtor showing whether the policy is term or whole life, the name of the beneficiary and the cash value of each policy.
~ Legible copies of ALL deeds, mortgages, leases or other documents showing ownership or leasing of any real property occupied or owned by Debtor.
~ Legible copies of ALL titles, memorandum of titles and proof of insurance for each vehicle that a Debtor owns or leases.
~ Legible copies of the most recent tax return filed, in addition to the prior two (2) years of tax returns that a Debtor has filed.
GET started on the road to financial relief today!!
Our lobby hours are 9:00 A.M. to 4:30 P.M. Monday through Friday.
Office hours by appointment
*Our office closes for lunch between 12:00PM and 1:00PM.
Saturday and evening appointments are available by special request.
We are conveniently located in downtown Painesville, Ohio, about 30 miles east of Cleveland
and 30 miles west of Ashtabula County.
FORBES LAW LLC
Main Street Law Building
166 Main Street
Painesville, OH 44077
The information you obtain at this site is not, nor is it intended to be, legal advice
You should consult an attorney for individual advice regarding your own situation.
BEFORE YOUR SIGNING APPOINTMENT:
~ Be sure to have less than $400 in ALL bank accounts (individual filers) and $800 (joint filers), including cash on hand
~ Provide your most recent paystubs to the paralegal
DURING YOUR SIGNING APPOINTMENT:
~ Review the final draft of your petition and schedules; this is the final time to make changes
~ If changes are required after the case is filed, you will be charged additional fees and possible costs
~ You will receive your case number and date of your 341 Meeting during the appointment (if a Chapter 7)
~ You will receive a complete copy of the signed petition and schedules, together with a copy of the court docket and Notice of Bankruptcy filing
AFTER YOUR SIGNING APPOINTMENT:
~ You will receive a letter from our office with important instructions regarding your 341 Meeting. The letter will outline the date and time of your 341 Meeting, together with the requirement to bring your social security card and current photo ID with you.
~ You will receive a notice from the US Bankruptcy Court specifying the date of your 341 Meeting, together with a notation regarding the requirement to bring your social security card and current photo ID.
~ You may receive a letter from your Trustee requesting various documents in addition to the documents we have in our file
~ Within forty-five (45) days of filing your case, you must complete the Debtor Education portion of the required credit counseling.
~ Ten (10) days PRIOR to your 341 Meeting, call our office to schedule a phone appointment with the attorney to prepare for the 341 Meeting
~ The 341 Meeting takes place in downtown Cleveland; if you need directions, please call our office at least one (1) business day PRIOR to your 341 Meeting
~ The 341 Meeting is conducted in a conference room type setting with other Debtors – you will not appear in a courtroom
~ You will receive an official Order of Discharge three (3) to four (4) months after your case has been filed
FORBES LAW LLC
CONGRATULATIONS! YOU HAVE TAKEN THE FIRST STEP TO FINANCIAL FREEDOM AND A FRESH START!
Call and make your appointment for a FREE 30 minute phone consultation 440-739-6211