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Bankruptcy Can Stop Wage Garnishments and May Offer Refunds

Posted on Sunday, March 27th, 2016 at 11:19 pm    

This week, our bankruptcy web video series explains how a Chapter 7 or Chapter 13 Bankruptcy can stop a wage garnishment.  Justin Lawrence, the founder of Lawrence & Associates, explains how a bankruptcy can even force the company garnishing your wages to return your money to you if the bankruptcy is filed within ninety (90) days.  Time is of the essence, so watch this video and call for more information today!


How to Protect Your Tax Refund When You File Bankruptcy

Posted on Monday, March 21st, 2016 at 12:13 pm    

In the newest video in our bankruptcy web video series, Justin Lawrence of Lawrence & Associates explains how bankruptcy filers can keep a tax refund in either a Chapter 7 or a Chapter 13 bankruptcy, and how the tax refund can be used to pay necessary bills or even for the bankruptcy itself!

This video applies to Kentucky and Ohio bankruptcy filers; if you live in another state, please confirm that the rules given in this video will apply in your state as well.


What’s the difference between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy?

Posted on Monday, January 25th, 2016 at 9:10 am    

Anyone who needs to file a bankruptcy is faced with an important choice: Chapter 7 or Chapter 13? Finding out what those terms mean is as simple as going to your local library, but knowing when you can file a Chapter 7 or when you should choose a Chapter 13 requires expert legal knowledge. At Lawrence & Associates, our Northern Kentucky attorneys can make sure you file the right kind of bankruptcy for your situation, whether you are facing foreclosure from a bank like Wells Fargo, being sued for medical bills by a hospital like St. Elizabeth, or confronting a mountain of Capital One credit card debt.

chapter-7-squareChoosing the right kind of bankruptcy can mean the difference between keeping your house, keeping your car, keeping your money, or losing it all. Geography matters: Northern Kentucky and Cincinnati have very different bankruptcy exemptions, and this is a big factor in the choice between Chapter 7 and Chapter 13. Other factors include your past income and current assets. Only by knowing the asset exemptions and median income levels applicable to the Northern Kentucky and Cincinnati areas can the choice between Chapter 13 bankruptcy and Chapter 7 bankruptcy be made. For example, the median income is lower for Northern Kentucky residents than it is for Cincinnati residents, and people over median income have to file Chapter 13. Therefore, if all else is equal, someone living in Cincinnati can file a Chapter 7 with the same income that forces a Northern Kentucky resident into a Chapter 13!

What Stops You From Filing a Chapter 7 Bankruptcy?

In general, you cannot file a Chapter 7 bankruptcy if you: a) have filed a bankruptcy in the last eight years; b) have assets with significant, unexempt value that you don’t want to lose, or; c) have income over median for your household size in the Commonwealth of Kentucky. Anyone falling into any of those categories may have to file a Chapter 13 bankruptcy. Figuring out how to correctly assess the value of your property, or the correct number for median income, can be a daunting task. Further, the consequences of making a mistake are very drastic; you could lose your property or get kicked out of bankruptcy and into the arms of your creditors! The attorneys at Lawrence & Associates can make sure your bankruptcy is filed correctly so that you get the maximum benefit from your decision to file.

Why Might You Want to File a Chapter 13 Bankruptcy?

If you are behind on a secured debt such as a mortgage or a car loan, but want to keep the house or car, you will have to file a Chapter 13 bankruptcy so you can set up a payment plan. There is no such thing as a repayment plan in a Chapter 7 bankruptcy, and if you are behind on paying the debt on a car or house then you will lose it. The repayment plans afforded in a Chapter 13 Bankruptcy also go toward non-dischargeable debts such as taxes, student loans, or child support. If your current repayment schedule makes it impossible to make ends meet, then filing under Chapter 13 allows you to change the repayment schedule to suit your monthly budget.

Another reason to file a Chapter 13 bankruptcy is to get predatory car loans under control. Many Chapter 13 bankruptcy filers can reduce the amount they need to pay on a car loan if they have owned the car for more than two-and-a-half years and if the amount on the loan is more than the value of the car. Also, the interest rate on a car loan can often be reduced when the loan is paid off through a Chapter 13 bankruptcy.

How Can I Get My Bankruptcy Started?

Lawrence & Associates employs highly skilled bankruptcy attorneys, and we offer free consultations with an attorney to find out whether Chapter 7 or Chapter 13 is right for you. Get the answers you are looking for, and avoid the hassle of creditors and the confusion of following the bankruptcy laws on your own. We are Working Hard for the Working Class, and we want to work hard for you. Call Lawrence & Associates today!


A Debt Collector Threatened Me with Fraud and Jail. Can They Do That?

Posted on Tuesday, October 13th, 2015 at 3:01 pm    

jailcellLawrence & Associates has told you before about creditor harassment, and with a list of things the creditor can and cannot do. We’ve also talked repeatedly about illegal scams where someone calls and pretends to be a debt collector in order to swindle you out of money. This post is slightly different. Here, we talk about the debt collector’s threat of fraud and related threat of jail time. Fraud allegations are different because a debtor really can go to jail for actual fraud. However, because debt collectors generally don’t understand the real meaning of the word fraud, the threat of jail time for fraud charges is almost never a real concern for every day debtors like you. Here’s why:

What Is Fraud?

So what separates an average joe who can’t pay his credit cards on time from a criminal who is defrauding business of its hard earned money? In a word, intent. One must actually intend to commit fraud, because a necessary element of fraud is the knowledge that a representation made is false. For judges and prosecutors, there is no question that someone has not committed fraud simply because they find themselves unable to pay their bills. The real question is whether the person with the unpaid bill, at the time he or she took out credit, knew that the debt would never be paid back. As a practical matter, that is difficult to prove in the context of taking out a loan. It is one thing to show that a bad check was written when the check writer knew the account balance was too low. It is another thing entirely to say that someone signing for a loan never intended to pay it back. None of us have a crystal ball.

As a practical matter, most creditors don’t even try to prove fraud. The bar is simply too high, and the likelihood of winning too small. Further, the fact that some debts won’t be paid back is factored into the creditor’s business model. That is why credit card companies and banks are billion dollar businesses despite the bankruptcies filed on their loans every day. Rather than prove fraud, these companies simply sue for money. The difference is profound. Fraud is criminal and involves jail time. A civil suit for money is a matter of a garnishment or lien against property.

There Is a Way Out of Crippling Debt

Debt Consolidation Companies aren’t always a solution, but bankruptcy is always the nuclear option to debt problems. Although you don’t have to worry about debtor’s prison or fraud, you do need to worry about your credit score, your debt-to-equity ratio, and many other variables that determine the kind of life you live. Although it is counterintuitive, bankruptcy can drastically improve these factors and your ability to live the life you deserve.

Lawrence & Associates has helped many clients who have been hassled by debt collectors, and we’d be happy to help you. We are Working Hard for the Working Class, and we want to work for you! Give us a call for your free consultation, today!


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 Marriage Affects Bankruptcy

Posted on Monday, May 11th, 2015 at 2:06 pm    

At Lawrence & Associates, our bankruptcy attorneys deal with a lot of bankruptcies that come at the same time as a marriage or divorce. Many Northern Kentucky residents find that they either want to get rid of debts before they get married (often to avoid affecting the other person’s credit), or find that their debts become overwhelming following even the most amicable and fair divorce. In this post, we will talk a little bit about how an upcoming marriage can affect the filing of a bankruptcy.

Wedding Bells and Bankruptcy – What You Should Know

weddingflowersOne of the questions we get asked most often at our Fort Mitchell, Kentucky office is whether a bankruptcy should be filed before or after the couple gets married. Generally, the concern is that getting married will somehow make the other spouse responsible for the indebted spouse’s debts. We’ll deal with two scenarios: one in which both spouses-to-be are indebted and need to file bankruptcy, and one in which only one spouse is indebted and needs to file.

First, let’s assume both of the soon-to-be married couple both have an avalanche of debt and both require bankruptcy. In that instance, it will usually make sense for the couple to get married before filing. First, a married couple only has to pay one court filing fee and one attorney fee, so the cost of filing is cheaper. Second, in both Kentucky and Ohio, all bankruptcies – regardless of whether they are Chapter 7 or 13 – require all household income to be listed. (This information helps determine whether you can file a chapter 7 or a chapter 13, and also how much a payment in a Chapter 13 will be.)

Therefore, an engaged couple in the same household is treated the same as a married couple when household income is taken into consideration. It would be rare that an engaged couple would want to file separate bankruptcies before getting married, but that might be wise if: a) the couple lives apart, b) at least one qualifies for a Chapter 7 while living alone, and c) when the engaged couple combines incomes, it would force them into a Chapter 13. In that case, filing separately would allow the spouse with the Chapter 7 to get in and out of bankruptcy quickly, rather than being in the bankruptcy for three to five years. However, this involves a means test calculation and the means test is complex. We do not recommend that you do this without an attorney.

Next, let’s assume only one person has a lot of debt coming into the marriage, while the other person has very little debt. The second person may not need a bankruptcy, although the first might. The analysis changes very little from the first scenario. If only one person is filing, the fees and costs will be the same regardless of whether that person is married or not. There is still no change in household income based on marriage; rather, the court looks at whether the two people are co-habitating regardless of marriage. One of the biggest concerns voiced is that the partner without the debt does not want his or her credit affected by the bankruptcy. However, in Northern Kentucky and Greater Cincinnati, the courts will not require the non-filing spouse’s social security information on the bankruptcy documents. Therefore, the non-filing spouse’s credit will not be affected by the bankruptcy. Just like in the prior scenario, the toughest question is for spouses-to-be who don’t live together before marriage. In that situation, an experienced bankruptcy attorney should determine whether moving in together will change the type of bankruptcy you can file.

Marriage Equality and the Supreme Court

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.

Get Legal Advice to Prepare for Bankruptcy Before You Make Any Life Changes

There are still a few free lunches in the world. One is in the form of a bankruptcy consultation. 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 couples and helping them achieve a debt free future. If you are getting married and have questions about bankruptcy, please give us a call today!


The Telephone Consumer Protection Act (TCPA) Protects Debtors From Harassment Such as Robo Call Abuse and Other Techniques

Posted on Thursday, January 15th, 2015 at 4:22 pm    

Robo CallsRecently, the Telephone Consumer Protection Act has become a big deal. This important law says that big banks, mortgage companies, and credit card companies cannot harass you when trying to collect a debt. Specifically, the TCPA doesn’t allow the creditors to call your cell phone without permission to do so. Robo calls that happen multiple times per day are especially frowned upon (although not outright illegal yet), and can result in big penalties for the creditor.

Example: Bank of American and the Coniglios of Florida

The TCPA is a powerful law, as is the Fair Debt Collection Practices Act. Either can make a creditor sorry for using abusive methods to collect a debt. Take, for example, the example of the Coniglios, a Florida couple that began receiving harassing calls from Bank of America. They sometimes received robocalls five times per day, all related to a mortgage they were behind on. Bank of America had the option to foreclose on the house, or to re-structure the mortgage so the Coniglios could get caught up, but it apparently chose to do neither. Instead, Bank of America allegedly decided to harass the Coniglios into giving up the home via robocall.  The Coniglios took them to court and they wound up receiving over $1,000,000 from Bank of America as a penalty for Bank of America’s conduct – an amount that came to approximately $1,500 per call!

Debt Harassment is Happening in Northern Kentucky Also

While the Coniglios’ case is unusual in size and scope, similar conduct by creditors causes Northern Kentucky families grief and hardship every day. Many times, this harassment forces families into bankruptcy and further hurts their credit. The emotional impact of the banks’ harassment only adds to the families’ stress from being financially strained.

If you or someone you know is suffering financially, or getting harassed by their lenders, know that you (or they) don’t have to suffer alone. A Northern Kentucky Bankruptcy Lawyer can help you!

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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Know the Consequences of Sending Gifts, Payments, and Transfers to Family Before Filing for Chapter 7 Bankruptcy

Posted on Monday, December 22nd, 2014 at 2:33 pm    

Fraudulent TranfersOnce you file for Chapter 7 Bankruptcy, the bankruptcy code provides a trustee to check into any assets that were transferred for up to a year before you filed. The trustee will be looking for “gifts” and “favorable payments.” A favorable repayments can show a preference in paying one debt over another.  A gift can show that a “fraudulent conveyance” was made. When a favorable payment or gift is paid to a family member or “insider”, the bankruptcy code is really harsh. Favorable payments and gifts to insiders can be looked at for up to two years before the bankruptcy was filed in most cases.  In Kentucky this can be extended to 5 years by the trustee using what is called a “strong arm” provision that allows trustees to use state law to go after preferences and fraudulent transfers.

Examples of Why You Need to be So Careful…

  1. Borrowing From a Close Relative for a Business – The borrower with the business intended to pay this relative back in a lump sum from a retirement account, but then it began looking like bankruptcy was imminent. This would create a double problem. The first problem is that exempt funds that would have ridden through the bankruptcy would have been converted to non-exempt funds. The second would be that the trustee pull that large lump sum payment back into the estate from the relative. From those reclaimed funds, the trustee would pay himself a percentage and the rest would have gone to unsecured creditors.
    Result… The retirement would be gone and the relative would remain largely unpaid (they would be treated the same as any other unsecured creditor and receive cents on the dollar).
  2. Securing a Personal Residence but Having a Considerable Amount of Unsecured Debt – Someone with considerable unsecured debt has their personal residence secured to the hilt, but they owned several acres in another state free and clear of any lien. –  It was important to this person to retain the out-of-state land because they wanted to give the land to someone else to keep it in the family.
    Result… Viewed as a fraudulent conveyance and the land would be taken and sold by the trustee with proceeds going to unsecured creditors.

These examples highlight the importance of sitting down with a northern kentucky bankruptcy lawyer practitioner who can help you with a comprehensive plan. Lawrence & Associates can provide swift legal action to help protect you and your family.

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.


Tips For Filing Bankruptcy in Northern Kentucky During the Holidays

Posted on Thursday, December 11th, 2014 at 4:27 pm    

Holiday BankruptcyBelow are some thing to keep in mind this holiday Season if a bankruptcy is a possibility before the new year…

  1. Gifts –  Christmas gifts that are worth hundreds of dollars must be listed in your bankruptcy.
  2. Expensive Items Purchased –  Any items purchased to be kept in house or given away as a gift  to someone else has to be reported. Luxury items being purchased will raise red flags that could prevent you from discharging your debt. A luxury item is defined as something costing more the $650.
  3. Tax Refunds – Tax refunds are considered an asset and must be reported even if you do not know the exact amount you will be receiving.
  4. Home Equity – If you have a lot of equity in your home, it can limit the amount of exemption you can put towards your assets. Be very careful.

If you are planning to go bankrupt over the holidays, it would be good to consultant with a Northern Kentucky bankruptcy attorney as soon as possible.

At Lawrence & Associates, we help our clients understand how bankruptcy laws are made to protect them and will allow for a brighter financial future.

Contact Us (859.371.5997) for a Free Consultation

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