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Frequent Bankruptcy Question: Can I File Bankruptcy More Than Once?

Posted on Wednesday, July 1st, 2015 at 9:34 pm    

bankruptcyOur Northern Kentucky office regularly helps local families file bankruptcy a second or even third time. More than one bankruptcy filing is not only possible, it can be expected in certain circumstances. For example, if a client has significant tax debts and credit card debts and knows high payments in a Chapter 13 bankruptcy are likely, it might make sense to file a Chapter 7 to get rid of the credit card debts first, and then file a Chapter 13 to pay off the tax debts.

The issue many clients do not understand is that a certain period of time has to happen between bankruptcies before the second bankruptcy can result in a discharge, or before the second bankruptcy is even possible. Lawrence & Associates’ attorneys see many people who need to file a second bankruptcy, only to get frustrated when they are told they cannot get a discharge or that they will have to file a different bankruptcy than the kind they wanted. For that reason, we are offering the following general guidelines for potential clients so they have a rough guess as to the options available to them in a second bankruptcy filing.

Filing a Chapter 7 as a Second Bankruptcy

You cannot file a Chapter 7 if you filed a previous Chapter 7 within the past eight years in which you received a discharge. Similarly, you cannot file a Chapter 7 if you filed a previous Chapter 13 within the past six years in which you received a discharge. There is an exception to the six year rule if your prior bankruptcy either paid all the unsecured claims in full or plan payments in the earlier case were at least seventy percent of the unsecureds and the good faith plan in the prior case was the debtor’s best effort. You also cannot file a Chapter 7 if you have had a previous bankruptcy dismissed either voluntarily by you, or because a Kentucky or Ohio court ruled that you were in bad faith or violation of a court order.

Some rules for you to take away: If it has been more than eight years since you filed your bankruptcy, you are ok no matter what you file now. If it has been less than eight years, you need to determine both whether a bankruptcy is possible and whether a discharge is possible. The six year test has exceptions that rely upon the judgment of the court in each individual case, and it is in your best interests to get an experienced bankruptcy attorney, like those at Lawrence & Associates, who will be familiar with the way local courts lean on this subject.

Filing a Chapter 13 as a Second Bankruptcy

As a general rule, a Chapter 13 bankruptcy can be filed at any time after a prior bankruptcy. The issue is not whether the Chapter 13 can be filed, but rather whether the debtor can receive a discharge in the Chapter 13. Discharge in a Chapter 13 will be denied if a prior Chapter 7, 11, or 12 was filed within four years of this Chapter 13’s filing, or if a prior Chapter 13 was filed within two years of this Chapter 13’s filing. Additionally, if the Chapter 13 is being filed within one year of a prior bankruptcy’s dismissal, a motion to extend the automatic stay must be filed so creditors do not have the right to pursue foreclosure, repossession, or garnishment during the bankruptcy.

A Chapter 13 can still have value even if a discharge is not available, so it is a good idea to talk to an experienced bankruptcy attorney to determine if a Chapter 13 will help no matter how long it has been since your last bankruptcy. Further, the automatic stay is critical for Northern Kentucky and Greater Cincinnati residents to preserve their assets in bankruptcy, so be sure to consult with a lawyer before filing.

Every Case Is Different, So Don’t Go It Alone!

These are general rules, and every case is different. There may be something about your case that is unique and requires a variation from the norm. Don’t file bankruptcy without legal help. Lawrence & Associates takes pride in representing Northern Kentucky and Greater Cincinnati residents just like you. We are Working Hard for the Working Class, and we can help. Call today!

Contact Us (859.371.5997) for a Free Consultation


How the Supreme Court’s Decision on Marriage Equality Affects Our Clients

Posted on Tuesday, June 30th, 2015 at 4:22 pm    

A few weeks ago, a Lawrence & Associates blog discussed the interplay between marriage and bankruptcy. At the time, Kentucky and Ohio were two of only four states in which courts had upheld bans against same-sex marriage, and we noted that a case before the United States Supreme Court could change the status of same-sex married couples in a bankruptcy:

At this time, same-sex couples are not allowed the right of marriage in either Kentucky or Ohio and therefore do not get the benefit of filing together. They do not get the cheaper filing rates of opposite-sex married couples, although the rules regarding household income are the same. The United States Supreme Court is currently considering this issue, so that rule may change. If so, we’ll update this blog in a different post to reflect that change.

supremecourtLast week, the United States Supreme Court ruled in Obergefell v. Hodges that same-sex couples have a right to marry under the United States Constitution. This landmark decision, similar to Brown v. Board of Education decades ago, advanced the goal of equality for all American citizens.

What Does this Mean for Bankruptcy Filers?

What this means for you depends on who you are. If you are not in, or about to enter, a same-sex marriage, then this ruling has no effect on your rights whatsoever. However, if you live in the Northern Kentucky or Southern Ohio areas, are in, or about to enter, a same-sex marriage, and are considering filing bankruptcy, then you have gained rights that had been previously denied to you. Insofar as it relates to a Chapter 7 or Chapter 13 bankruptcy, you now have the right to file together, with only one filing fee. (This applies to both attorney fees and court costs.)

You will also be recognized as one household by the bankruptcy court once you have been married. By contrast, couples that are just dating are treated the same as roommates in the same household. Married couples, however, must list their spouse’s income on their bankruptcy, even if the spouse is not filing. This has no effect on the spouse’s credit, but it does affect one’s ability to file for a Chapter 7 bankruptcy. A Chapter 7 debtor must be under median income for his or her household size in the state in which he or she lives. Household income includes a spouse’s income regardless of whether the spouse files. Thus, a same-sex couple may be forced to file a Chapter 13 bankruptcy where before they could have filed separate Chapter 7s.

What Does this Mean for Those with an Injury?

In Workers’ Compensation, spouses of an injured worker do not have a claim for damages, so nothing will change for Workers’ Comp filers. In Personal Injury claims, however, a spouse historically has a right to damages called loss of consortium. This is the loss of the injured person’s household services, affection, ability to have sex, etc. Same-sex married couples are now going to be afforded the same loss of consortium rights that other married couples have enjoyed for centuries. Loss of consortium is a small factor for small injuries (and in fact can be worthless in many small injury claims), but is a major factor for major injuries, sometimes totaling millions of dollars. The adopted children of same-sex couples also enjoy a version of loss of consortium based upon the loss of a parent’s affection, or vice versa.

In disability claims, married same-sex couples will likely enjoy the same spousal benefits that opposite-sex married couples enjoy.

Find Out How the Supreme Court’s Ruling Affects You Personally Before Filing Bankruptcy

Being recognized as a same-sex couple can have beneficial or negative effects on any court action. At Lawrence & Associates, we give free consultations on all our cases. Please call us to get more information on how the Obergefell v. Hodges case applies to your legal proceeding. We take pride in representing Northern Kentucky and Greater Cincinnati couples. If you are getting married and have questions about bankruptcy, please give us a call today!

What Happens When I Surrender My House in Bankruptcy?

Posted on Wednesday, June 24th, 2015 at 1:20 pm    

Regardless of whether you file a Chapter 7 or a Chapter 13 bankruptcy, you have the option at the time of filing to keep or surrender your home. Many Northern Kentucky residents file bankruptcy especially for the purposes of keeping their homes, especially during the recent foreclosure crisis. However, others in the Northern Kentucky area file bankruptcy for the purpose of getting out from under crippling debts, which often includes the mortgage. People in that group will surrender their house in the bankruptcy, which means they give it back to the bank. This article talks about what happens when you decide to surrender your home.

The Process of Giving the Home Back

keys-400When you file your bankruptcy, you will have the option to surrender the house. If you file a Chapter 7 bankruptcy, you will use the Form 8 to make this choice. If you file a Chapter 13 bankruptcy, you must fill in the appropriate section of the Plan to surrender. In either event, the filing of the bankruptcy gives the mortgage company all the information they need to know they can take the house back.

However, the bank does not get to automatically take the house back. The automatic stay applies even to property you have surrendered in the bankruptcy, and will prevent the mortgage lender from taking the house without first asking the bankruptcy court for permission. Typically, mortgage companies will file a proof of claim and a motion for relief from stay with the bankruptcy court before it does anything else. You typically will not object to the motion for relief from stay if the debtor has surrendered the home, and the court will enter an order granting the motion.

After the mortgage company gets its order granting relief from stay, it still has to file a foreclosure action in state court. Even though you have surrendered the house, you will still get served with all the foreclosure paperwork. This is normal, and it does not mean you have to appear in court or file anything with the court. If you know you surrendered the property and have no intention of fighting to keep it, you can just throw all the papers sent to you in the recycling bin. Eventually, the mortgage company will get a judgment and a Master Commissioner’s sale will be set. The Master Commissioner’s sale is the date that the property will be taken out of your name and put into the buyer’s name.

Problems that Can Arise Before the Bank Takes the House Back

Many months can pass between the day you file your bankruptcy and the day the Master Commissioner’s sale takes place. During this time, you own the property and it is yours to maintain, regardless of whether you filed a Chapter 7 or Chapter 13 bankruptcy. This is both good and bad.

On the good side, since you own the house you are free to live in it up until the date of the Master Commissioner’s sale, and you can do so without paying anything to the mortgage company. This allows you to save the money you would normally pay toward rent or mortgage payments to give yourself a financial cushion going forward. Likewise, you can rent the property to someone and keep the rent payments (but make sure you are up front with the renter about the bankruptcy). However, if you choose this option, be ready to move your things quickly. If you enter the home after the Master Commissioner’s sale, you are trespassing.

On the bad side, you are responsible for maintaining the property and making payments to homeowner’s associations until the date of the master commissioner’s sale. If the city has an ordinance requiring the grass to be cut and they cite you for letting it grow too long, that citation is yours to pay. If the HOA makes an assessment against the homeowners after the bankruptcy but before the Master Commissioner’s sale, that is your assessment to pay. Remember that a bankruptcy only eliminates debts that exists before you filed, so debts like these that come up after the bankruptcy will not be covered by it. You cannot force the mortgage company to file the foreclosure quickly, and sometimes they wait a very long time.

Why it is Usually Better to Surrender the Home in Bankruptcy

There are other ways to allow the bank to take a home back. You could enter a short sale, or sign a “deed in lieu of foreclosure.” The problem with these solution is that they may be taxable to you. The IRS requires a tax paid for forgiveness of debt, so if the mortgage company writes off $100,000 of debt using these options, then you will owe the IRS taxes on $100,000.

A bankruptcy does not create a taxable event, although its effect is worse on your credit. Thus, you need to weigh your options prior to picking one of these alternatives.

Get Legal Advice Before Getting Rid of Your Home

Bankruptcy consultations are free, so take advantage of them. When Lawrence & Associates does a bankruptcy consultation, we do not charge you or ask you to sign a contract. If you decide to retain us, you can do so at a second appointment or at the first, whichever you choose. We take pride in representing Northern Kentucky and Greater Cincinnati residents, and we can advise you on how to best let go of a home that has become an albatross around your neck. Please give us a call today!

How Do I Know if that Debt Collection Call Was Really a Scam?

Posted on Monday, May 4th, 2015 at 2:03 pm    

Lawrence & Associates’ bankruptcy section sees many calls from Northern Kentucky residents who have been contacted by debt collectors – or at least people claiming to be debt collectors. In this post, we will discuss whether a call to collect a debt might be a scam, or whether a legitimate debt collector is lying about what they can do to collect a debt.

Did the IRS Really Just Call Me About Past Due Taxes?

debt-scam-callsBetween January and April of 2015, many Greater Cincinnati residents began receiving phone calls (sometimes automated) from callers claiming to be IRS representatives. These calls were especially common in Northern Kentucky. The calls stated that the person being called owed unpaid and past due income taxes. The caller then demanded that the taxpayer give up personal information – including a social security number – and sometimes demand that the taxpayer make an immediate payment on the balance owed.

If you receive a call like this, it is a scam. The IRS has held a press conference on this, and has publicly stated that they do not make phone calls for past due taxes owed. Instead, the IRS sends letters. Further, the IRS generally avoids filing lawsuits related to past due taxes. Instead, the IRS will often seize any future tax returns, because this allows them to be repaid without having to pay an attorney. Don’t fall for this scam!

Can I Go to Jail for a Past Due Debt?

Many Greater Cincinnati residents receive phone calls from debt collectors threatening jail time if a debt is not paid. The debt collector will state that failure to make a payment by a certain date will result in a sheriff or the state police arresting the debtor and taking them to prison. Many Cincinnati and Northern Kentucky residents become so afraid of prison time that they go without food in order to make a payment.

This is a scam; debtor’s prison was outlawed centuries ago. While it is true that fraudulently incurring a debt can land someone in prison in both Kentucky and Ohio, unwisely taking out a debt simply is not fraud. In fact, in the thousands of bankruptcies this law firm has filed over the years, we have never once seen a client charged criminally for fraud. So rest easy – there is no jail time for accidentally getting behind on a payment. The sheriff’s deputy will visit you if you are sued, but this is only to serve you with the complaint from the civil suit. If you are sued civilly, that just means the creditor wants money from you. And if you are sued civilly, Lawrence & Associates can help you take care of that lawsuit by filing a bankruptcy.

Bankruptcy Foreclosure Scams – Can you Save Your Home for $800?

If your home has never been foreclosed upon, you’ve probably never seen this scam. But anyone in the Northern Kentucky area that has been served with foreclosure papers can probably recite this scam by heart. Usually in a snail mail letter, or sometimes even in the local newspaper, companies will offer “mortgage assistance” or “foreclosure counseling” – two very vague terms that really mean nothing. The letter will offer to work out the mortgage arrearage by having the homeowner sign a deed over to the “foreclosure counselor,” or by transferring a fraction of the interest in the home to another person in bankruptcy. By doing so, this company promises that attempts to foreclose on the property will stop.
This is also a scam. Yes, attempts to foreclose on the property will stop for a while. But you can also lose ownership of your home. Further, the foreclosure will only be stopped temporarily at best. Once everything is sorted out, and assuming the homeowner still has a home, the foreclosure will proceed. This type of scam has gotten so bad that the federal government has written a report warning homeowners about it. Never sign a deed without consulting with an attorney first, under any circumstances! And never believe that your foreclosure will be permanently stopped without making plans to repay the arrearage on the mortgage.

Bankruptcy Can Legitimately Stop the Problems These Scams Claim to Stop

If you are on the receiving end of any of these scams, you probably have real financial problems. Financial problems that cannot be resolved by setting up a short repayment plan with a creditor are nearly always best solved by filing bankruptcy. Remember, the most common reaction of most Northern Kentucky residents upon filing a bankruptcy is wishing they had investigated the possibility before sinking their time and money into poorly thought out financial “solutions.” Lawrence & Associates can help Northern Kentucky and Greater Cincinnati clients file bankruptcy and stop the harassment. Call us today and learn how we can help you!

Steps To Take Before, During, and After a Bankruptcy To Reduce The Impact On Your Credit

Posted on Friday, April 17th, 2015 at 4:42 pm    

credit-scoreMany people wonder how they can protect their credit during a bankruptcy. There are actually several steps you can take before, during, and after a bankruptcy to help reduce the bankruptcy’s impact on your credit to the greatest extent possible. The Fort Mitchell, Kentucky offices of Lawrence & Associates can help you find ways to mitigate credit damage based on your particular circumstances. In the meantime, here are some tips:

Tips Before Bankruptcy

A Fort Mitchell, Kentucky resident with credit card accounts that have zero balances should stop using them immediately! If the balance is less than six hundred dollars, paying it off may be a good idea before the bankruptcy. However, you should never pay more than $600 toward your debts prior to bankruptcy, and you should always consult with an attorney before doing so. Many credit card companies will keep a person’s account open during bankruptcy if the card has a $0 balance when the bankruptcy is filed. If the account remains open until after the bankruptcy, then that card can be used to rebuild credit.

Tips During Bankruptcy

A Northern Kentucky resident can help to improve credit as well. Reaffirming on a loan or lease for a car will help to improve your credit rating. Future car payments will also help boost your credit score. It is not wise to reaffirm on a vehicle if the payments are beyond your ability to pay, but with a careful budget in place payments toward a mortgage or a car loan will continually improve your credit score. A good Northern Kentucky Bankruptcy attorney will prepare a budget that allows for such payments.

Tips After Bankruptcy

In Fort Mitchell, Kentucky, almost everyone that exits a bankruptcy gets credit card solicitations immediately. If the solicitation comes from a legitimate and well known credit card company, they might help you improve your credit. You’ll need to make sure that the company reports the credit line to the credit bureaus, so the payments on the card will help your credit. If you do accept such a credit card, be sure to charge only minimal amounts to it such as gas or groceries. Most importantly, ALWAYS pay the card off at the end of the month to avoid interest taking a big bite out of your budget. Finally, be sure to always pay all loan or credit card payments on time, as timeliness is important to your credit rating.

Unfortunately, our office does not provide additional services for rebuilding your credit after bankruptcy, although we can help you file bankruptcy or preserve your credit rating before filing bankruptcy. If you’d like more advice on filing bankruptcy or maintaining or preparing to preserve credit during bankruptcy, call Lawrence & Associates at our Fort Mitchell, Kentucky or Warsaw, Kentucky today!

If you are overwhelmed by mounting debt and tired or receiving harassing phone calls from creditors, contact Lawrence & Associates today. We can help you obtain that fresh start that you deserve!

Contact Us (859.371.5997) for a Free Consultation

Lawrence & Associates Help a Client Keep Her Home Using Chapter 13 Bankruptcy

Posted on Tuesday, April 14th, 2015 at 4:47 pm    

save my home from foreclosureThere are many reasons that individuals and families find they can no longer afford to pay monthly bills. Some may have recently gone through a divorce or been saddled with overwhelming medical bills. Others have been injured at work or in an accident and are unable to earn an income. Many are facing increased interest rates on mortgages or credit cards and cannot keep up. There are also people who simply let spending get out of control and cannot find a way out. We want to share a recent case we handled to give you an idea of what we can do for our clients. We will supply as many details as possible while still respecting our clients need for privacy.

The Situation

Our client needed to stop a foreclosure on her Northern Kentucky home. She was behind on her mortgage because she had unexpectedly gotten laid off, and it had taken her a few months to find a new job. The foreclosure had been filed and she had no way to defend it.

What We Did

When out client called Lawrence & Associates, we let her know that she could save her home with a Chapter 13 bankruptcy, so long as she filed the bankruptcy before the Master Commissioner’s sale on her home. Even if the mortgage company gets a judgment on the foreclosure, they cannot take the home so long as the mortgage arrearage is repaid inside a Chapter 13 bankruptcy.

The Result

Our client got to keep her home and she was able to repay her mortgage arrearage. With her new job and reduced debt, F.S. has gotten the fresh start through the bankruptcy court.

Contact Us (859.371.5997) for a Free Consultation

Providing You With Debt Relief Solutions Through Bankruptcy

Regardless of the reasons that brought you to financial distress, filing for bankruptcy does not make you a bad person. In fact, the government created bankruptcy in order to help people recover from unmanageable financial problems. At Lawrence & Associates, we help our clients understand how bankruptcy laws are made to protect them and will allow for a brighter financial future.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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Illness and Overwhelming Medical Bills Send Many into Bankruptcy

Posted on Thursday, April 2nd, 2015 at 3:53 pm    

chapter 7 bankruptcyAccording to a 2007 study, 62.1% of all bankruptcies have a medical cause and the share of bankruptcies attributable to medical problems rose by 50% between 2001 and 2007. [1] Moreover, a recent article in Forbes highlighted one woman’s story of illness and mounting debt and stated that overwhelming medical bills cause 17-62% of all bankruptcy declarations. [2]

Stephanie Casey Diagnosed with Multiple Sclerosis

The woman featured in the Forbes article, 30-year-old Stephanie Casey, discusses her diagnosis with Multiple Sclerosis and the skyrocketing medical bills and debt associated with the diagnosis. Before the diagnosis, Mrs. Casey and her family were in an ideal situation- they had health insurance, IRA accounts, a sizeable emergency fund, were saving for a home, and no debt. However, the medication for MS rose from $2,800.00 to $3,600.00 per month and even with health insurance, Mrs. Casey was responsible for $250.00 per month. That’s over $3000.00 a year spent just on injections to help slow the progression of MS!

The High Cost of Healthcare

In the article, Mrs. Casey also expresses concern for her future and the future of her family. She states, “If I lose my vision, like 81% of MS patients do, and can’t work–this would mean that I’d no longer be covered by health insurance after 18 months of COBRA–we’re prepared to file for bankruptcy. If I don’t have insurance, and I lose my income, our family would be functioning on my husband’s salary alone to cover a $2,200 a month mortgage–and my $3,500 per month medication.” She goes on to state, “We’d be bankrupt within a few months of running up credit card bills to pay for the drugs, so it would be better for me to file individually, get down to no income and qualify for disability insurance and patient assistance programs from the drug manufacturers.”

Filing for Bankruptcy May Help

Although Mrs. Casey’s situation may seem extreme, many insurance companies in Northern Kentucky cancel coverage when the employee suffers a disabling illness because they become too sick to work, leaving them with medical bills and no insurance.With the rising costs of medical care and the increase of individuals struggling to stay on top, filing for bankruptcy may help relieve some of that debt. A Northern Kentucky Bankruptcy Attorney can help you get a better idea of what disclosures are required in order to file for bankruptcy and what debts will be discharged.

If you are overwhelmed by mounting debt and tired or receiving harassing phone calls from creditors, contact Lawrence & Associates today. We can help you obtain that fresh start that you deserve!

Contact Us (859.371.5997) for a Free Consultation

A Fresh Take on Bankruptcy: Filing for Bankruptcy Can Benefit Individuals, Companies and Society

Posted on Friday, March 27th, 2015 at 4:08 pm    

fresh start bankruptcyThe Webster Dictionary defines bankruptcy as the quality or state of being bankrupt or the utter failure or impoverishment. Although the definition of bankruptcy gives off a negative connotation, it doesn’t have to. Filing for bankruptcy can benefit individuals, companies and society as a whole.

A Fresh Start

People often don’t understand the process of filing for bankruptcy, however, bankruptcy is a legal procedure by which an individual or a business can discharge its debts when the petitioner (the person or company filing bankruptcy), does not have the means to pay off the debt within a reasonable period time. Bankruptcy can help both individuals and companies have a fresh start.

An Over Abundance of Debt Options

In today’s environment of the over abundance of credit cards, pay day loans, car loans, and first, second and third mortgages, it is very easy to fall behind in paying bills, which often leads to people drowning in debt. Falling deep into debt is not a positive thing for either the individual or for society. In fact, according to the Federal Reserve, the average household in the United States has approximately $15,799 in credit card debt, $54,000 in household debt and credit card debt for the United States totals $793.1 billion. [1] With statistics like this, it is no wonder why so many of us are struggling and forced to file for bankruptcy.

Earnings Are Meant to Motivate

Although our clients often worry about embarrassment that may come from filing for bankruptcy, many of our clients who are forced to file for bankruptcy are hard working individuals who can no longer afford to hand over every penny they make to creditors and there is nothing embarrassing about that. After all, the purpose of earnings is to motivate people to work hard, but how motivated can you be if you know that most of the money you make will go to creditors? Without the option of filing for bankruptcy, many people would work long hours just to hand over hard earned money to creditors.

Bankruptcy Stop the Calls and Collections Immediately 

Bankruptcy helps to give debtors a fresh start, alleviating what could be a tremendous burden. Further, when an individual or company files for bankruptcy, the automatic stay goes into effect meaning the harassing phone calls, letters and potential lawsuits from all creditors stop.

If you are overwhelmed by mounting debt and tired or receiving harassing phone calls from creditors, contact Lawrence & Associates today. We can help you obtain that fresh start that you deserve!

Contact Us (859.371.5997) for a Free Consultation

Footnote: [1] http://www.statisticbrain.com/credit-card-debt-statistics/

Can My Social Security Disability Be Garnished by Someone I Owe? It Depends Who You Owe…

Posted on Thursday, March 26th, 2015 at 4:21 pm    

Social SecurityAt Lawrence & Associates, many of our clients come to us with garnishments already in place. Those clients are usually at the point of desperation, because a garnishment is the death sentence for the careful balance we strike with our creditors. Suddenly, instead of staying one step ahead of the bills, we are one step behind and losing more ground every day.

What Can Be Garnished?

When a judgment results in a garnishment, it’s important to know what can be garnished and what cannot. Everyone knows that a paycheck or bank account can be garnished, and that the IRS can withhold a tax refund to repay past due income taxes from a prior year. What many Northern Kentucky residents don’t realize is that social security disability checks can also be garnished under special circumstances.

Private Debt Collectors Can’t Garnish Disability Benefits But They Can Go After Bank Accounts

First, let’s start with private – as opposed to government – debts. Generally, private creditors such as credit cards or medical providers (think Capital One or St. Elizabeth Hospital) cannot garnish social security disability benefits. They can, however, garnish bank accounts that hold these benefits if the benefits are deposited by check or if the bank that holds the disability funds is also the bank you owe money to.

The U.S. Government Can Garnish a Percentage Your Social Security Disability Benefits

The amount of the garnishment depends on what kind of debt you owe. If you owe money to the IRS for back due taxes, the IRS can garnish up to 15% of your disability check. If you owe money for student loans, the government can also garnish up to 15%, although it cannot touch the first $750 of disability payments. If you owe child support or spousal support, your social security disability benefits could be garnished by as much as 50% to 65%!

Chapter 13 Bankruptcy Stops Private and Government Garnishment of Your Social Security Disability Benefits

In Northern Kentucky, a Chapter 13 bankruptcy is a good way around a social security disability garnishment. Even the government has to obey the automatic stay, which is the bankruptcy court’s order that requires all creditors to stop collecting their debts once a bankruptcy is filed. In a Chapter 13 bankruptcy, you can pay off non-dischargeable debts – such as student loans, taxes, or child support – over a three to five year period without those debts incurring interest or penalties in the meantime.

Contact Us (859.371.5997) for a Free Consultation

Relevant Posts

Bankruptcy Explained: Personal Bankruptcy Can Stop the Repossession Action and In Some Cases Get Vehicles Returned.

Posted on Friday, March 20th, 2015 at 1:18 pm    

If you have fallen behind on your car payment and face the threat of repossession, or if your car has already been repossessed for non-payment, a personal bankruptcy filing can stop the repossession action and, in the right circumstances, allow you to recover your vehicle. You want an experienced attorney to handle these matters for you, one who has protected the rights of others in similar circumstances. Bankruptcy Lawyers offer extensive experience to people with concerns about the repossession of personal property.

Experienced  Attorneys Can Stop Repossessions

Whether you have just received notice that your property is subject to repossession or your vehicle has already been repossessed, a Northern Kentucky Bankruptcy Lawyer can help. If you still have possession of your property, theycan work directly with the lender to restructure or renegotiate the terms of your loan. However, in many circumstances, the most effective way to stop a repossession or regain your property is through a Chapter 7 or Chapter 13 bankruptcy filing.

Bankruptcy options include…

  • Chapter 7 – Depending upon your income, you may be eligible for total and permanent financial resolution absolving you from certain types of debt, and immediately stopping all contact from debt collectors, garnishment, vehicle repossession, medical debt relief, tax relief, and credit card relief.
  • Chapter 11 – For business owners only. Allows you to completely reorganize your business debts while keeping your business intact.
  • Chapter 13 – Allows you to reorganize your debts into monthly payments you can afford and still pay off the debt over a period of time established by the court. This can have long-term benefits demonstrating to your lenders your willingness to pay them.

Immediate Relief

If you a Bankruptcy Attorney before your property is taken, they can immediately file a bankruptcy petition, which will put an automatic stay in place, suspending all legal proceedings, including repossession actions. Even if your car or other property has been repossessed, they may still be able to get it back for you by filing for bankruptcy protection before the property is sold. The sheriff may have served you with an Order of Replevin or the tow truck may be there right now, but we can still help prevent repossession.

Regardless of where you are in the repossession process, time is always of the essence. Your best chance to stop a creditor from repossessing your property is to contact Lawrence & Associates right away. We are always prepared to take swift legal action in order to stop a repossession and protect our clients.

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