Getting Your Drivers License Back

Many bankruptcy filers are filing because they need help getting their drivers license back. The fines can be quite oppressive sometimes.

A bankruptcy can discharge certain fines that block you from getting your drivers license. If those discharged fines were the only obstacle between you and your drivers license, you are likely to get it back and be on the road soon. Often, my clients may have to pay a nominal court cost or reinstatement fee. It varies from case to case.

Our office will do everything we can to help you get your drivers license back. You will have to do a few things yourself, such as actually going to the BMV and getting clearance to get your drivers license back. However, we will remain with you on the phone, make calls, send faxes--whatever it takes. We will be your friend and adviser throughout the process.

The process of getting your drivers license back can be unpredictable. Ohio does not have a good system for this. But with our experience and your determination, we'll get it done together!

Call us to discuss further!

Should You File Bankruptcy?

Nobody files for bankruptcy protection because they want to. It is a serious decision and scares many people. As I will discuss below, there is no shame in making the right decision for you, your family, and your community.

There are many reasons not to be scared of bankruptcy. Once you consult with an experienced attorney and weigh your options, there is no reason to delay or be scared once you decide it is the right decision for you.

Here are a few questions to ask yourself right off the bat:

1.      Have you consulted with a reputable financial adviser?

2.      Do you feel your financial situation is uncontrollable?

3.      Are you not answering your phone or sick of getting calls about debt collection?

4.      Are you using credit or borrowed money to pay for necessities?

5.      If I asked you “how much debt do you have?” would you be able to answer that question?

Each of these questions are important when deciding to file for bankruptcy protection. Generally, you need to think of it on a 7-10 year timeframe. After about 7 years, your bankruptcy will likely not appear on your credit report any longer (although it will be a public record). The harshest consequence of filing bankruptcy (in my opinion) is that it appears on your credit report, although there are other personal issues I discuss with my clients as a counselor.  

That being the case, will your financial situation improve in the next 7 years? If you are only making the minimum payments on credit cards, racking up new debt to pay for necessities, and not in control of your finances—then most likely your financial situation will still be bad in7 years.  

If you file bankruptcy now, most of your debt will be gone immediately. In 7 years, the bankruptcy damage to your credit will begin to repair. So essentially, after that period, the harshest consequence to filing bankruptcy is mitigated. Again, the courts and Congress have made the point of bankruptcy law clear: it is to get people a fresh start so that they can be productive members of society.

Depending on other circumstances, you may see improvements in your credit worthiness after filing bankruptcy within a year or so. I have written about how retirees and other categories of people have no reason not to file bankruptcy if they cannot live a productive life with their current debt.

The point of bankruptcy is to invoke some ancient rules that go all the way back to the Old Testament. These rules are designed to make you and your community better by offering you the opportunity to become a productive citizen again. We want you working gainfully, not just paying off old debts for the rest of your life.

UPDATE:
Thanks to a follower on Facebook, I have decided to do an update to this article. She questioned the 7 year time frame I speak of above. Here is how it is put by Free Credit Score.com:

"Credit reports and scores were designed to assist lenders in deciding who was more or less likely to fulfill their financial obligations.  When someone files for bankruptcy, it's extremely damaging to their credit score as it's a failure to meet all (or almost all) of their financial obligations.  While through discipline and hard work, it is possible to quickly bounce back from the financial implications of a bankruptcy, the credit implications will last for at least seven years.  During that time period, it is unlikely that a person will be approved for new loans or credit accounts, and if they are the terms are likely to include high fees and interest rates."

As I wrote above, the credit damage begins to repair. Essentially, the bulk of the negative effects are worn off by the point. So I stand by my 7 year time frame, although it is definitely 10 years for the full recovery.

Free Bankruptcy Lawyer Consultation: www.bankruptcylawyerdirecttalk.com

Bankruptcy and Foreclosure

So you haven’t been able to pay your mortgage. In Ohio, as in America, we really believe in the sanctity of a person’s home. That is why we have a very extensive process of foreclosure before you can lose your home. To handle these difficult situations, you need to be educated on several different aspects of the process.  

1. Learn About the Rules of Foreclosure

To learn details about how the foreclosure process works in Ohio, see this website: http://www.savethedream.ohio.gov/index.aspx. This website will explain things better than I ever could. Meanwhile, bankruptcy provides a few tools for dealing with foreclosure. There are two main types of bankruptcy that individuals generally consider: chapter 7 and 13.  

2. What if you Get Into an Emergency Situation?

Bankruptcy rules can possibly help you if you get into a financial emergency. Before you consider bankruptcy, you should understand the difference between secured and unsecured debt; and how it is treated in bankruptcy. Here are a few things to understand:

·        Secured debt means that the creditor can take some property from you if you don’t pay the debt. That means that the property is collateral on the loan.

·        Unsecured debt means that there is no collateral on the loan or that there is nothing the creditor can take from you, simply because you didn't pay. Rather than take property from you, the creditor will have to go through the debt collection process. This generally involves filing notices on your credit reports and filing a law suit. 

The company that provides your mortgage is a secured creditor and your debt under the mortgage is a secured debt--meaning they can take the house from you if you don't pay them what you owe. Under bankruptcy law, secured creditors have more rights. Generally, they can either demand to be paid or take the property back. Debtors have three choices: 1) redemption (basically a refinance), 2) reaffirmation, and 3) surrender. 

The surrender option is the most powerful. This option gives the bankrupt debtor the option to: 1) discharge the debt owed, and 2) get out of the contract. This is a good option if the debtor is willing to give up the property and start over somewhere else.

Reaffirmation means that the debtor wants to continue making payments and keep the property. However, the creditor does not have to reaffirm if the debtor is not keeping up with payments.

Chapter 7 and Foreclosure

A Chapter 7 is a relatively quick bankruptcy process that eliminates most debt types and usually only takes a few months. If you are going through the foreclosure process on your home, Chapter 7 can slow it down, but it can only stop it if you have a way of catching up on the payments you owe.

The filing of a bankruptcy will institute an “automatic stay.” This stay forbids creditors from attempting to collect a debt without court permission. If you are not caught up on your mortgage, you can bet the mortgage company will ask the court for permission to re-institute the foreclosure. If you are not caught up on your mortgage, they’ll probably get that permission. However, the stay gives you some time to catch up—which gives you a good chance of reaffirming.

Chapter 13 and Foreclosure

Under a chapter 13 bankruptcy, the debtor will get into a payment plan. As part of this plan, the debtor will pay the unpaid payments on the mortgage, while continuing to make current mortgage payments. Basically, this option gives you an opportunity to pay the mortgage payments over a longer period of time. Meanwhile, the process will allow you to ultimately get your unsecured debt under control, so that you can afford the payment plan.

Chapter 13’s are very complicated and require an attorney’s consultation to fully understand.

Please feel free to contact our law office for more information. 
(614) 284-4394
josh@joshbrownesq.com 

 

What is Bankruptcy?

Bankruptcy is something many people have heard of but they don't exactly know what it is. In fact, many people use the term "bankrupt" very imprecisely. Politicians for example, often exclaim "the United States is bankrupt!" or "that guy is morally bankrupt!"

Essentially, bankruptcy means that you have filed a petition with a bankruptcy court, asking the court to initiate some ancient rules--rules that are referred to in the Old Testament. There are two main rules in play.

• First, is the "stay" or "automatic stay." The stay is an order from the court to the world that no debt collectors are to attempt to collect a debt from the petitioner (called a "debtor") unless the court approves of it. This stops all wage garnishments, court proceedings, phone calls, etc.. You name it. 
• The second rule is the "discharge." If the court believes you qualify, it will grant a discharge of all the debtor's debt, except for that which Congress has decided is not dischargeable. That is mainly (but not solely) child support, alimony, and (ironically) certain taxes. Since ancient times, bankruptcies are available every 7 years. In the U.S. it is available every 8 years, with some exceptions. 

The purpose of asking for the initiation of these bankruptcy rules, is because they provide a process for getting a financial "fresh start." In fact, bankruptcy courts often refer to bankruptcy's purpose as "getting a fresh start." The discharge gets rid of oppressive debt; while the automatic stay gives you a breathing space to undergo the process of getting a discharge. The theory is that the government would rather have you working productively, than solely working to pay your bills. If you are only working to pay bills, then you may not have an incentive to work at all. Especially if the end is never in sight. Many people in that situation would simply stop working.

When considering the debtor's rights, the bankruptcy courts will look to make sure that the debtor doesn't have enough money available to pay debts and expenses on a periodic (generally month-to-month) basis. Those debtor's rights will depend generally on the money the debtor has available and the debtor's income--although several other factors may come into play as well.

Congress has set up a system of bankruptcy "chapters" that provide a framework for debtors to exercise their bankruptcy rights. Generally, individual and business debtors use chapter 7 and individuals sometimes use chapter 13 (on rare occasions, both might file under chapter 11). Generally, you consult with an attorney to decide which chapter to file for. We'll only address individual bankruptcies here and not chapter 11's which are rarely used.

Filing bankruptcy immediately creates a bankruptcy estate. The bankruptcy estate consists of all the assets of the debtor that are not "exempted" from the estate. Generally, a debtor's bankruptcy petition will exempt most or all of their personal belongings from the estate--at least that is what we attempt to do. Congress has created broad rules defining what is exempt. Those rules attempt to exempt items that debtors need to survive, plus a little extra.

The Courts will appoint a Trustee to manage the affairs of the estate. The Trustee's job is to sell the assets of the estate in order to pay the debtor's creditors. The Trustee gets to keep a percentage for himself. If any asset of the estate is not exempt, the estate Trustee will take it and sell it off to creditors if the Trustee thinks there is enough value in the item to make it worth his efforts. The theory behind this, is that the courts should not discharge a debtor's debt unless the debtor's assets are used to pay off creditors first.

After the Trustee has administered the assets of the estate (or determined that there are no assets) then the U.S. Department of Justice has an office that will take a look at the petition. Their office is called the U.S. Trustee's Office (not to be confused with the estate Trustee--there is no connection between the two). This office plays an oversight role and basically tries to root out petitioners who are not playing by the rules.

So in summary, bankruptcy is a two-handed process where--on one hand--a person petitions a court to grant the petitioner a stay on collection of debt until the court can grant a Discharge Order. On the other hand, the court will put the petitioner's non-essential (i.e., non-exempt) belongings into a bankruptcy estate and sells off the assets of the estate to pay off creditors.