Bankruptcy vs. Workout
~ Glenn E Forbes, Esq. (5/2020)
Did you receive a Foreclosure Complaint?
People often ask me whether they are better off filing a Bankruptcy or trying to work out their debts with their creditors. Of course, the advice I may give varies from person to person and situation to situation. However, there are some general guidelines that I use.
The first guideline I use is how much debt there is to discharge. If you have under $10,000.00 of debt that you are going to discharge, it seems that you are not getting a lot of bang for your buck by filing a Bankruptcy. After the court costs are paid, the attorney fee is paid and the cost of the credit counseling is paid, you may end up spending $2,000.00 or more on your Bankruptcy. If you are only discharging $10,000.00 in debt, I don’t like those odds.
The other problem is that if you file a Chapter 7 Bankruptcy you will not be able to file again for eight (8) years no matter how badly you need it. If you file a Chapter 13 Bankruptcy and it is for some reason dismissed, you will not be able to file again for another four (4) years. I have had situations where people have filed a Chapter 7 Bankruptcy with relatively low debt and then because of some calamity, have not had the ability to file years later when they have high debt. That is always something to consider.
The other thing to consider is whether your creditors will in fact take a lower amount. Oftentimes, you will receive offers in the mail from creditors or collection agencies or debt buyers offering to settle for less. However, most of these offers depend on your ability to pay right away; you may or may not be able to do that. Other times, you just can’t get enough of a discount to make the whole thing work. That has to be taken into account in making the decision of whether to file a Bankruptcy.
People often ask me about their credit. To be sure, a Bankruptcy gives your credit a hit. Most people take 3-4 years to recover from the Bankruptcy. However, if you have a lot of debt and have failed to make a lot of payments, your credit is probably not in very good shape anyway. Under those circumstances, a Bankruptcy may not be that much of a detriment to your credit score. When we are preparing Bankruptcies, we have access here at FORBES LAW to a credit report which will predict your credit score one year after Bankruptcy. We often use that as a tool to determine which course to follow.
Finally, rebuilding credit is possible and requires discipline. I have had many clients go into Bankruptcy and three or four years later have credit scores in the 700’s. It is not an insurmountable task but requires fiscal discipline.
Here at FORBES LAW, we will advise you on whether you ought to file a Bankruptcy, do a work out with your creditors or handle your debt in some other way.
Are you being evicted?
~ Glenn E Forbes, Esq. (3/2020)
Although Eviction is a summary proceeding and moves faster than other lawsuits, the fact that you received a "3 Day Notice" does not mean that you have to have all of your stuff out of the rental unit in three days.
The "3 Day Notice" is a pre-requisite to your landlord filing an action in Court to evict you. If those 3 days pass and you have not left the rental unit, your landlord can file an eviction against you. However, for that eviction action to come up for hearing takes about three weeks. During those three weeks you can try to negotiate with your landlord to pay the landlord if you in fact do owe him money. You can also negotiate with the landlord for time to move. And ultimately, you may have a defense to the eviction or you may have a claim against your landlord under the Landlord Tenant Act.
If you receive a foreclosure notice upon your house, there are options available to help you retain your home. Loan modifications are often entered into with the lenders, however, you need to qualify for a loan modification and submit the required documentation to the lender to determine if you qualify. FORBES LAW can assist with collection of the proper documentation to provide to the bank. The basic documentation to submit for a loan modification is as follows:
1) A specific form with detailed information regarding your income and debts.
2) Last three months bank statements
3) Most recent tax returns signed and dated
4) 30 days most recent paystubs or; profit and loss for the last 3 months if self employed
5) Any contributor income
6) A hardship letter signed and dated
7) A tax form to go to the IRS to request your last 3 years tax returns
If the loan modification package submitted to the bank is not complete, the lender will not review until it is complete. Documentation will get old and go “stale” and you will need to start the process from the beginning if that occurs. FORBES LAW will work with you to make sure your package is complete when submitted for review and will also work with you to get any further documentation that may be requested to the lender timely.
If you are offered a loan modification, usually a three month trial period with the new payment amount will occur. The bank reviews the loan modification package and proceeds with a review to determine if the interest can be lowered, the monthly payment amount lowered, and if the past due amount can be capitalized and added to the end of your loan to extend the term of the loan. Payment plans are an option as well, but usually only occur for 12 months, which would mean you would need to pay your current monthly payment along with the past due amount owed to the lender broken up over 12 months.
Many courts in Ohio offer a mediation program for foreclosures to work out a potential loan modification with the lender. FORBES LAW will provide you with advice regarding whether such programs are available in the court in which your foreclosure is pending and will work with the bank during the mediation process.
Finally, if you do not want to retain your home, FORBES LAW can help with options available for liquidation.
If you find yourself in a foreclosure situation, call FORBES LAW so we can provide you with all the options available to you.
The mere fact that you have been sued is in and of itself not a terribly big deal. To be sure, you need to file a response, or Answer, to the complaint, otherwise the plaintiff will get a default judgment against you and have collection opportunities.
Here at FORBES LAW, we can help you handle that case. We will advise you on what steps to take and we will file an Answer if that is what we decide. Once an Answer is filed, usually nothing happens very fast. In fact, a collection lawsuit may take up to a year to get through the courts.
Certainly, if you owe money, you may have to pay some money. However, the case may be resolved or, in fact, the plaintiff may not be able to prove the case and it will be dismissed.
SO DON’T PANIC, we know what to do! Call FORBES LAW at 440 739 6211
You have rights under the Landlord Tenant Act. Your Landlord cannot do certain things, for example, enter your rental unit without reasonable notice, or saddle you with oppressive lease terms. We are familiar with the Landlord Tenant Act at FORBES LAW and can advise you as to your rights.
At FORBES LAW we can help you defend evictions. We know what to file and when to file and how to negotiate.
So, if you are being evicted, call FORBES LAW 440 739 6211
So, you just got your Summons. What is a Summons you ask? It is a form prepared by the plaintiff (a person or entity who brings a legal action) and issued by a court that informs the defendant (you) that you’ve been sued!!! You are probably thinking that a Sheriff will show up at your door tomorrow to take you to jail, take away your property, or that your bank accounts are immediately going to be seized by the plaintiff. This is not true. Although things happen faster sometimes than you want in the law, the Wheels of Justice turn slowly. We realize that the world of courts is new to you. You may never have been to court or even been involved in a court proceeding, but we have! We are in court almost every day. The attorneys at FORBES LAW have over 50 years of combined experience in the Courts of Northeast Ohio – we can handle it!
Have you just been sued?
~ Glenn E Forbes, Esq. (3/2020)
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.
SAMPLE 3 DAY NOTICE
FORBES LAW LLC