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Bankruptcy Statistics: Job loss, medical and divorce are top causes

For most people, the word "bankruptcy "conjures up lots of scary images. It has a reputation that’s linked to destitution, desperation and even public humiliation.

That reputation is wrong.

In fact, if you find yourself in financial trouble, Federal Bankruptcy Laws are specifically designed to protect you from that list of frightening things. After all, a fresh start is sometimes the most sensible approach, and filing for bankruptcy can offer the opportunity you need to start rebuilding from scratch.

In short, bankruptcy doesn’t have to be scary, and it’s much more common than most people realize. National bankruptcy statistics show that each year, more than one million Americans file for protection under Federal Bankruptcy Laws. What’s more, statistics indicate:

  • the average age is 38
  • 44 percent are couples filing jointly
  • 30 percent are women filing alone;  26 percent are men filing alone
  • most are slightly better educated than the general population
  • Two out of three have lost a job
  • Half have experienced a serious health problem
  • The vast majority (91 percent ) have suffered a job loss, medical event or divorce
  • 90 percent have two car payments, a house payment, and an average of $2500 in credit card debt
  • 10 percent were delinquent only five to 29 days before bankruptcy

(Source: The Fragile Middle Class: Americans in Debt, Sullivan, Warren, Westbrook.)

In addition, filing for bankruptcy is typically not a newsworthy event (unless you happen to be a celebrity or other prominent figure).  In most cases, the only people who will know that you have filed will be your creditors.

Bankruptcy shouldn’t be entered into lightly. But, at the same time, be sure you’re not misguided by rumors or half-truths. Educate yourself on the facts, so you can accurately assess your financial affairs and chart a course that best meets your needs.

To get answers to your questions or if you think it’s time to consider bankruptcy, call 614-934-1544 or contact us today to schedule a free consultation.

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Chapter 13 Bankruptcy: Why Chapter 13 may be your best choice

When people think of bankruptcy, they often imagine their financial slate being wiped clean. However, not all bankruptcy filings eliminate all of your debt.

A qualified Ohio bankruptcy attorney can evaluate your situation and help you understand which type of bankruptcy might be right for you, but here are some general reasons why you might choose to file for Chapter 13 rather than Chapter 7.

If you owe money that is not dischargeable in Chapter 7…

Certain kinds of debt cannot be eliminated through bankruptcy. This often includes taxes, child support, or money you may owe a former spouse based on a divorce settlement. If these are the biggest portion of your debt, then Chapter 13 restructuring may be the only way to get debt relief.

If you have liens on your house or car that are more than what the property is worth…

A lien against a piece of property states that if the property is sold, the lienholder (your creditor) gets to take a portion of the sale price first. If the amount of the liens total more than the property is worth, then even if you sell the property, you still owe money. Under Chapter 13, portions of the lien that are more than what the property is worth can be defined as “unsecured” and you may have to pay little or nothing against them. So, if your home is currently worth $150,000 but you owe $200,000 on the mortgage, you could have $50,000 of the lien eliminated under a Chapter 13 restructuring, although you’d still have to pay the $150,000 in full.

If you’re late with your house or car payments and want to keep it…

In Chapter 7 bankruptcy, you might be required to sell your house or car to cover the debt that you owe. This depends on several factors, and your attorney can help you evaluate if this applies to you. However, if you want to keep your home or car and it makes sense for you to do so, Chapter 13 may be the best way to allow that to happen.

You have more assets than the exemptions allow…

The Bankruptcy Code provides certain exemptions that are protected from being taken from you in the bankruptcy process. Most people who file Chapter 7 are “no-asset” cases, meaning that the things that they own are covered by exemptions and don’t need to be considered when determining how to pay back creditors. Many people who have assets of some kind choose to file Chapter 13 because it can help them keep their house, car, and other personal property.

Are you confused?

You’re not alone. Many people try to file for bankruptcy on their own only to get caught in the many legal technicalities and end up paying more against their debts than necessary or losing valuable personal property that they could have kept. Before filing Chapter 13, consult with a qualified bankruptcy attorney to ensure that you take advantage of the maximum legal protections available. To schedule a free consultation with a Columbus Bankruptcy Attorney, call 614-934-1544 or contact us today.

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Am I eligible for bankruptcy under the means test?

If you’re considering bankruptcy, you may have heard of the bankruptcy means test and wondered what it means for your eligibility for bankruptcy. Good news! In general, the bankruptcy means test does not exclude you from filing for bankruptcy.

In 2005, the U.S. government acted to crack down on abuses of the bankruptcy system by passing the means test. The new rule specifically addresses wealthy debtors — people who may have adequate income to pay off their debts.

And even better, the rule only applies to Chapter 7 bankruptcy (in which you have the ability to completely wipe out your consumer debt.) Even individuals that fail the test may still be eligible to file for Chapter 13, under which they would pay back a reduced portion of their debts over time.

So there’s no reason to fear the bankruptcy means test — although you do need to be informed. Here’s what it means for you.

How the rules apply

The language of the test is complex, but it boils down to this:

  • If you earn less than the median income in your state, you are NOT subject to the means test. You don’t have to worry about it.
  • If you earn more than the median income, you do have to pass the means test in order to be eligible for bankruptcy. However, the test is actually rather lenient, as it is designed to catch abuses of the system, not punish legitimate debtors.

How is the bankruptcy means test calculated?

In general, the test calculates your income and your debts, and provides a certain ratio of debt to income at which you are deemed to have “passed.” If you’re unsure if you would be eligible, you should see a qualified bankruptcy attorney in your area, who can help you determine your eligibility. As always, your situation is unique, and an attorney consultation is the only way to get real answers on available remedies for eliminating your debt.

Have a question about the bankruptcy means test?

We’re happy to help. Contact us to schedule your complimentary consultation with an Ohio Bankruptcy attorney. You’ll learn all you need to know about the bankruptcy process, and the best way to start protecting yourself from creditors now. Click here and provide contact information to schedule your free consultation.

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In financial trouble? A four step plan for taking control of debt

If you’re in financial trouble, sitting around worrying won’t help.

When confronted with a challenge, it’s tempting to stick our heads in the sand and pretend it doesn’t exist. This may make us feel better in the short term, but in the long term it only makes the situation worse.

The most important thing to understand is this: You have to take the initiative to fix your financial troubles. No one else can swoop in and set your financial house in order, and unpaid bills simply will not go away.

Once you really understand this, the biggest way to make an impact is to take some simple, concrete steps to get your financial house under control. We don’t suggest that you can fix all your financial trouble overnight — after all, it’s hard to do great work when you’re overwhelmed. But with a couple of hours and some gumption, you can start to pull together some information that can lead to solutions. Here’s how:

1. Set aside a half a day. Clear your schedule, and let others in your household know that you have something important that you need to focus on for a little while. Make sure you have enough time to get the job done — it may only take an hour, but you don’t want to get distracted and end up falling short of your goal.

2. Ahead of the scheduled time, pull together all of your financial paperwork. This includes all of your monthly bills, credit card statements, any collections notices, pay stubs, bank statements, anything having to do with money. You don’t even have to look at it now, you just want to have it available so that when it is time to start going through everything, it’s all in one place. Put it in a giant cardboard box so that it’s at the ready.

3. Sort the paperwork. In order to get an accurate picture of your financial situation, you need to know how much money you have, how much you owe, and what money is coming in and going out every month. So, sort all of your paperwork according to these categories. Your bank statements show how much money you have. Bills that are not for the current month that you haven’t paid show how much you owe. Credit card statements for which you carry a balance can also count for this amount. Your pay stubs, unemployment statements, Social Security benefit, workers’ compensation, pension statements — all of these count as what money is coming in. And then there’s what money is going out, which is typically your current credit card statements and any bills for the last month, including a mortgage or rent, utilities, telephone, cable, car and other regular payments.

4. Total up each category. On a sheet of paper, write down all of the amounts that fit into each column. So, you may find you have $500 in the bank, $1,200 coming in each month, $7,500 in unpaid debts like credit card balances or car loans, and expenses of $2,000 each month for your basic living needs. For every sheet of paper, figure out where it fits into the puzzle and record it so you can get an accurate picture of your current financial situation.

Once you have this total, you can start to look at whether it’s feasible to pay off what you owe, and if you can turn around your financial picture the way that you’re currently living. In our next post, we’ll look at ways that you can start to turn things around, and when to look at other options for your debt management.

You have the power to end your financial troubles. Read more next week, or contact a Columbus Bankruptcy Attorney today to get answers to all of your questions about eliminating your debt. Click here to schedule your free consultation.

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Legal advice critical for those struggling with debt

If you’re struggling with debt, you’re likely struggling alone. Most people don’t seek legal advice or other support for their debt issues until they find themselves backed into a corner, or the stress becomes overwhelming. But well-timed professional help can save you time, money and stress. Here are three signs that it’s time to consider consulting an attorney to answer your questions about dealing with debt.

Seek legal advice if creditors are threatening legal action

Depending on the nature of the debt, creditors have a variety of avenues for collecting outstanding debts, including pursuing you in court, garnishing wages, and placing liens against your property. It’s tough to know which potential consequences are likely or unlikely, and what the long term implications might be on your credit and finances. Sound legal advice can help you determine the best action to take to protect yourself.

Consider legal advice while you’re creating a repayment plan

If you owe more than one creditor, you’ll have to make choices about who you pay, how much, and when. Understanding your legal rights can help you identify the best places to put your money to eliminate your debt while protecting what assets you have. Should you later choose to file for bankruptcy, having legal advice up front will place you in a better position to keep assets that are important to you.

If you’re losing sleep, legal advice may be your solution

Lastly, if your debt situation is keeping you up at night, you don’t have to go it alone. Simply knowing that you have a professional in your corner who can make sure you get the best possible outcome can set your mind at ease. Get all your questions answered, feel more in control of your financial future, and take the first steps toward setting yourself on the right path. All of these will reduce your stress level, not to mention help to correct your financial situation.

Is it time for you to seek legal advice?

For advice on debt elimination and the role bankruptcy can play in rebuilding your finances, contact us for a free consultation with an Ohio bankruptcy attorney. Click here to schedule your consultation.

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Can I avoid foreclosure through bankruptcy?

If you’ve received a notice that your mortgage lender is initiating foreclosure proceedings, you’ll likely do anything to put the brakes on that process. Avoiding foreclosure is a major reason that people come to us to talk about bankruptcy — they’re looking for the solution to save their house.

Based on your situation, bankruptcy may or may not help you avoid foreclosure. In order to get the best outcome, it’s important to understand what protections are available against foreclosure.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy typically offers a full discharge of your outstanding debts without need for repayment. When you file for Chapter 7, you fall under the “automatic stay” provision, which mandates that all creditors stop collections actions until your case is discharged (complete.)

This automatic stay can delay a foreclosure, but may not allow you to completely avoid it. The mortgage lender can still request permission from the court to proceed with a bank sale. Whether or not such a request would be granted is hard to guess. However, filing Chapter 7 will allow you to avoid foreclosure for the next 60 days or so. During that time you might be able to sell your property or work with your lender to find a more palatable solution, so it can be a valuable reprieve.

Chapter 13 Bankruptcy

The other kind of bankruptcy is Chapter 13, which requires repayment of some portion of your outstanding debt. Chapter 13 can be a good choice for avoiding foreclosure. The process for Chapter 13 requires establishment of a payment plan with your creditors. In other words, you’re working with your creditors to find a more workable situation.

Many homeowners facing foreclosure find that the payments required to maintain the payment plan are burdensome. Some bankruptcy proceedings may allow for a loan modification on the mortgage, which could bring down the monthly payment cost. And Chapter 13 also offers the automatic stay protection, ensuring at the very least time to come to a positive solution.

To avoid foreclosure through bankruptcy, seek out an attorney NOW

If you’re facing foreclosure, there’s no time to lose. An in-depth discussion with an attorney will allow you to make educated decisions about bankruptcy as a tactic to postpone or avoid losing your home. Don’t make the mistake of waiting too long. Save money and time by seeking bankruptcy help from a reputable Ohio bankruptcy attorney today. Contact us for your free, confidential consultation today.

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Correcting Credit Report Errors: Improve Your Credit Score in Minutes

Correcting credit report errors after bankruptcy can make a huge difference in your credit score and put money back in your pocket, but only if you know how. Let’s look at the best methods for correcting credit report mistakes.

Why do I need to correct my credit report?

How many times have you been mischarged at a restaurant or at the grocery store? Nobody’s perfect. Whether due to mistakes keying in information or problems with technology, errors happen every day. But in no other area can a mistake cost you more money than in your credit report.

This is why the government passed a law that gives you the right to one free credit report each year from each of the major credit reporting agencies. The information included on your credit report determines your credit score — the three-digit number that credit card companies, banks and other lending institutions use to determine whether you qualify for credit and at what interest rate that credit is available. A small difference in interest rate can mean a big difference in out-of-pocket costs, possibly hundreds of dollars a month on a mortgage. For that reason, the government has declared it your right to manage your credit without any cost to you.

When should I correct my credit report

Many of our clients don’t know the importance of correcting their credit report after declaring bankruptcy. Credit reporting agencies rely on information provided by the banks and other lending institutions to create your credit report. If the bank doesn’t update your information — because of an error or because it simply isn’t their policy to provide the updates automatically — your credit report can continue to show unpaid balances that were discharged through bankruptcy protection. These erroneous records can continue to impact your credit score unless you take action to change them.

About thirty to sixty days after your bankruptcy is discharged is a good time to start looking at your credit report to make any necessary changes. This gives enough time for the banks to update their records with the reporting agencies.

How do I go about correcting my credit report?

It takes some time, but the process is simple. You’ll want to set up a folder or some other place to keep records of what you’ve done, and follow up to make sure that any incorrect records have been corrected. Here are the basic steps:

1. Get your free credit reports. Although many services advertise “Free Credit Reports”, these reports are typically only free if you subscribe to a service or make another purchase. The only truly free credit report source online  is AnnualCreditReport.com, a government-mandated site which provides you the ability to get all three of your credit reports once annually. (You can also request the reports by mail using this form.)

2. Review the reports for accuracy. Go over each report line by line looking for anything that appears inaccurate. If any accounts listed have been paid off or closed, or anything else doesn’t match your records, make a note of it so that you can dispute the records in question.

3. Write a letter to the credit reporting agency. You’ll need to contact the credit reporting agency showing the incorrect records — Experian, TransUnion or Equifax — by mail. In your letter, describe the exact portion of the record that appears incorrect, and provide copies of any documents that support your position. These agencies are required to investigate your dispute and report to you whether or not there has been a change to your credit record in response to your letter. If there is a change, you have the right to a new copy of your credit report to verify the change has been made.

4. Write letters to creditors. After you’ve notified the credit reporting agency of the error, you’ll also want to notify the creditor — the credit card company or bank that issued the credit. They too will investigate your dispute.

5. Keep any correspondence, and follow up with any disputes that aren’t resolved promptly. It’s not enough to send the letter. In most cases you should receive a response within approximately 30 days telling you the status of your dispute. If you don’t receive word from the credit reporting agency in that time, you’ll want to follow up to ensure your dispute was received and check on its progress.

Proactive management of your credit report can help ensure that your credit score rebounds quickly after bankruptcy. For bankruptcy advice and information on how to start rebuilding your finances today, contact us for a free consultation with an Ohio bankruptcy attorney. Click here to schedule your consultation.

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Credit after Bankruptcy: Stepping into Your Financial Future

For those considering declaring bankruptcy, it’s the biggest question — can you get credit after bankruptcy?

Bankruptcy does impact your future finances, but the good news is that the outlook isn’t as dire as you might think. With good financial planning, you can rebuild your scores and begin to receive offers for loans, including mortgages, within months of declaring bankruptcy .

Bankruptcy and your credit score

Your ability to get credit after bankruptcyis linked to your FICO score, a three-digit number created by rating agencies to “grade” your creditworthiness. Although bankruptcy stays on your credit report for seven to ten years, it’s impact on your rating can begin to decline immediately because often it’s the most recent activity in your history that has the most weight. In fact, many of our clients begin to see offers of credit within 90 days after bankruptcy.

Managing your finances well can help you earn good financial grades in the future, and begin to see your score rebound. Here’s how:

  • Pay all of your bills on time. Just as late payments can negatively impact your FICO score, a history of on-time payment can positively impact your rating. Whatever bills you have each month, ensure your payments are scrupulously on time.
  • Get and use credit responsibly. If a serious spending problem is what put you into bankruptcy in the first place, this may not be the best plan. But if you feel ready and able to responsibly manage your spending, get what credit you can and manage it well. Try a secured credit card, designed for those with financial blemishes, and pay off the entire balance each month as scheduled. This will begin to demonstrate that you can manage your finances well.
  • Don’t max out any credit account. Part of your FICO score is linked to the ratio of available credit to credit used — in other words, how close to your limit you are. You want to make sure that you never exceed one-third of the limit on any account. So, if your credit card limit is $500, stop spending at $150, and pay off the balance. This may seem like a difficult restriction, but it shows financial discipline that will pay off in your FICO score.
  • Maintain an installment account. You’ll also need some installment credit, like a car loan, student loan or home loan to show your credit stability. If you still have a student loan after bankruptcy, pay off as much as possible each month. You can probably still qualify for an auto loan after bankruptcy, although the rates will be higher than before bankruptcy. But by paying these rates in the short term, you can get better rates a year or two down the line.
  • Clean up your credit report. Although many of your credit accounts may be eliminated due to bankruptcy protection, they may still show on your credit report as open and overdue. There can also be other errors on your report of which you’re not aware. Take advantage of your right to a free annual credit report (available from AnnualCreditReport.com, a government-mandated secure site) and look it over line by line. If anything seems incorrect, contact the appropriate reporting agency to make adjustments. Accounts that are listed as open or overdue that were included in your bankruptcy should have their status changed, in order for you to be able rebuild your credit.

These steps will help you rebuild credit after bankruptcy and begin to regain the financial flexibility you once had. Some financial discipline now will provide a strong foundation for your financial future.

Wondering how to get started with your own financial turnaround story? Contact us today for a free consultation with a Columbus bankruptcy attorney.

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Bankruptcy confidential: 5 secrets you must tell your bankruptcy attorney

If you’re considering declaring bankruptcy for debt relief, you may feel like you’re in it alone. Just you against the legal system, with all of the rules that you don’t yet understand. Plus, you may be embarrassed to talk about your financial problems, especially with strangers. Perhaps you’ve put off contacting a bankruptcy attorney because of it.

This fear and embarrassment is common — almost universal. Practically every new client approaches their first meeting with a bankruptcy attorney warily, and most have to be encouraged to share all the specifics of their situations.

But your bankruptcy attorney is your partner in the process, duty bound to help you get the best possible debt relief outcome. And while you may not want to share all the nitty-gritty details with someone that you’ve just met, remember — bankruptcy attorneys have heard it all before. We’ve seen every combination of debts and assets, every financial difficulty, anything you can imagine. And while you may feel like the only one that’s gotten into this mess, the scores of smart, responsible, well-meaning people declaring bankruptcy have proven that even the best people get into financial trouble sometimes.

So the worst thing you can do is hide anything from your bankruptcy attorney. Anything that is incorrectly reported when declaring bankruptcy can cause big problems, from a delay in granting the claim to having your activities be considered fraudulent, which can lead to fines and jail time. Here are five things that you must share with your bankruptcy attorney, and the reasons that you must be completely honest to get the best bankruptcy advice and maximum debt relief protection you’re entitled to.

1. All of your income and financial assets — including retirement plans, legal judgments and every bank account. Some people try to protect money from being seized by not disclosing it, or giving money to friends or family members to hold. The problem with this is that many of these accounts — checking accounts, savings accounts, investment accounts and more — will appear on your credit report or other public records. The courts routinely check these sources of information to make sure all parties are playing fair. Hiding assets can lead to fines or even jail time, and can keep you from being granted debt relief at all.

2. Property you want to protect. You may be tempted to transfer cars, real estate, jewelry or other valuable property to others to keep them during the debt relief process. Some people choose to sell these items for a few dollars or simply give them away. There are two problems with this approach. First, many of these items would already be protected from seizure in a court proceeding, so you may be able to keep them anyways. Second, the court will scan other public records such as automobile title transfers and real estate property records to look for assets in your name and may find these transactions. The court not only has the power to pursue this property and attach it to your claim, again they may find your behavior fraudulent and levy fines or dismiss your case.

3. All of the debt that you have. The purpose of declaring bankruptcy is to eliminate as much of your debt as possible so that you can get on stronger financial ground. The process doesn’t work if you don’t disclose all of your outstanding creditors. Tell your bankruptcy attorney right away about any and all debt that you know of — credit cards, auto loans, student loans, alimony, child support, legal judgments, notice of garnishments, medical bills, etc. Your attorney’s job is to determine how best to get you maximum debt relief, and he can’t do that without the full facts.

4. What you’re making payments on — and what you’re not. The process for declaring bankruptcy does take a little time, so you can’t completely stand still while you wait for its protections to kick in. By discussing your personal financial situation with your bankruptcy attorney, he can advise you on how to manage your finances in the short term, including which bills you should pay, which you should not, and where the money should come from to make these payments. Many people make critical mistakes trying to pay off as much debt as possible prior to consulting with a bankruptcy attorney. If you believe you will require debt relief in the future, it’s better to consult a bankruptcy attorney early, before you lose assets, income and property that you could have otherwise kept.

5. Anything that you’re afraid will keep you from bankruptcy protection. If there’s anything that you’re afraid to tell your bankruptcy attorney, tell him that first. Many people are tempted to hide previous bankruptcies, upcoming financial windfalls such as inheritances or legal settlements, personal situations that impact their finances, business interests, and more. This is never, ever a good idea. If these situations come to light during the proceedings, they can delay your case, lead to additional legal fees to amend prior filings, cause you to lose property that may have otherwise been protected, and once again end in fraud charges. It’s your bankruptcy attorney’s job to advise you on the best way to protect your financial future, and he can’t do that effectively without all the facts.

The best way to get the debt relief you’re looking for through declaring bankruptcy is to let your bankruptcy attorney do his job. Provide him all the information you have, answer questions truthfully, and let him figure out the best way to protect the things that are important to you. Our Ohio Bankruptcy Attorneys can advise you on the best way to get started, and the consultation is confidential and absolutely free. Contact us to schedule your complimentary debt relief review.

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Bankruptcy advice: The two secrets no one will tell you about debt relief

When you think of people who seek help from bankruptcy, what do you think?

Until we’ve been through it, we tend to think that people who file for bankruptcy spent too much money, made bad financial choices, and perhaps should have known better. We think we’re somehow different than they are.

SECRET #1: Most Americans are a breath away from needing bankruptcy help.

We see our neighbors who all seem to be doing fine, with their nice houses and cars, their kids in sports and their spring break vacations. So when we start to feel the financial pressure of too much debt, we think we’re alone in our situation.

But at the end of last year, consumer debt stood at $2.5 trillion in the U.S. — about $8,100 for every man, woman and child in the country excluding mortgage debt.

With that debt load, it doesn’t take much to get into deep financial quicksand fast. A couple of missed paychecks, an unforeseen home or car repair, or an exorbitant medical bill and it becomes much harder to balance the checkbook at the end of each month.

If you’re struggling to meet ends meet, are facing collections actions or watching your credit rating decline, you may be reluctant to seek bankruptcy advice. After all, you don’t want to think of yourself as one of those free spenders who didn’t manage their finances. The secret is that you’re not — you’re just like everyone else on your block or in your building. It just so happens that you hit a rough patch and are now feeling the pain.

What we don’t realize is that many of our successful, smart peers and neighbors are in the same boat as we are, working very, very hard to have the life that we want for our families and walking the edge of financial disaster.

So when we find ourselves losing sleep at night over our mounting bills or avoiding reading the mail, we don’t ask for the help or advice that we need.

We think, “I’m not them. I don’t need bankruptcy help. Bankruptcy is for people who have made bad decisions.”

The truth is that bankruptcy was developed to help you and me — people who work, pay their bills, keep to a budget, clip coupons at the grocery store, and somehow still found themselves unable to keep up.

SECRET #2: Asking for bankruptcy advice doesn’t make you a bad person.

The second misconception that keeps us from seeking help and advice on bankruptcy is the idea that filing for bankruptcy is some financial scarlet letter — a mark forever on your record that reminds you and others of your mistakes.

What most of us don’t realize is how common bankruptcy has become, and how discreet process truly is. Because your neighbors have the same worries as you, they’re not talking about their finances at dinner parties. You’ll never know which of your friends and colleagues have filed unless you do a search of public records. And while searching for our old high school buddies on Facebook has become popular, it’s not common to check their financial history.

In the right circumstances, bankruptcy can mean a fresh start, a foundation for rebuilding, and a load off of your mind. You can sleep better at night and ensure that your financial future is brighter. You can take the lessons that you’ve learned and move forward, instead of constantly watching the creditors at your heels.

THE TRUTH: The only thing that bankruptcy takes away from you is your debt.

Everyone who comes to us for bankruptcy advice tells the same story.

“I never thought I’d be here.”

And the truth is that no one plans to need bankruptcy help.

If you never thought you’d be here, you’re not alone. If you take charge of your financial future, get the bankruptcy advice that you need, and choose to file for bankruptcy, you’re not alone either. You’re in the good company of your friends, family and neighbors who didn’t think they’d be making that decision either.

Don’t make the mistake of waiting too long to get bankruptcy advice. Seeking bankruptcy help from a reputable Ohio bankruptcy attorney today can save you thousands of dollars and hundreds of headaches and grey hairs. Contact us for your free, confidential consultation today.

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Received notice of garnishment? What to do now to stop garnished wages

Have you received a notice of garnishment? If you have, you don’t need to panic. Now’s the time to get informed about what a notice of garnishment means for you and your finances. Let’s look at the facts.

A notice of garnishment is a legal notification that a writ of garnishment has been ordered against you. This means that a court has judged that you owe funds to a creditor that you have not paid, and has ordered your employer to garnish your wages — or remove up to 25% of your post-tax earnings from your paycheck and give that money to the creditor that filed for the writ against you.

You may be panicked to think that your paycheck will be smaller when you’re already struggling with debt. It’s important to get educated about your options so that you can make smart choices in this difficult situation. So before we talk about how to respond to a notice of garnishment, let’s look at some mistakes that you don’t want to make.

Three mistakes to avoid after a notice of garnishment

Faced with garnished wages, you may be looking for any alternative to fix the situation. Here are three things you should NOT do to try to stop wage garnishment:

Can I plead with my employer to give back my garnished wages? If your employer has been court ordered to turn over your garnished wages to a creditor, they must do so under penalty of law. It’s not the employer’s choice, so you won’t be able to convince them not to remove the funds from your paycheck.

Should I quit my job and go work elsewhere? Quitting your current job will not erase the debt — it will only leave you without the money to pay it. Once you find another job, the creditor can file to have your wages garnished there. You’re best off staying employed where you are.

Can I dispute the notice of garnishment if I owe the money? If you truly owe your garnished wages, disputing a garnishment will not make the garnishment go away. Instead, it could cost you time and money that could be better spent eliminating the debt.

The only real solutions to garnished wages

Once a legal judgment has been placed against you for a valid debt, it’s unlikely to get it removed. You really only have two options to stop your employer from reducing your paycheck.

Work with the creditor. If you haven’t yet attempted to contact the creditor and ask for a payment plan or debt reduction, you can try to work something out with them. Unfortunately, by the time there’s a garnishment in place, the creditor may not be willing to work with you because they’ve already gained a legal judgment for the money. If you’re unable to work out a solution with the creditor, your other option is…

File for bankruptcy. Bankruptcy protections automatically put a stop to garnished wages.  If bankruptcy is right for your situation, you can either completely eliminate the debt or greatly reduce it. Bankruptcy prevents creditors from taking any other legal action against you to collect debts, including garnishment. It provides the only way under the law to stop a valid wage garnishment.

Is bankruptcy right for you?

Only a licensed Ohio bankruptcy attorney can evaluate your situation and help you decide if and when bankruptcy is the right choice for your financial situation. Contact us for a free, confidential consultation with an Ohio bankruptcy lawyer to discuss your debt elimination options.

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Stop Wage Garnishment Before it Happens

Having trouble paying the bills you have now? Imagine taking a 25% pay cut.

That’s the danger for those who don’t stop wage garnishment in its tracks. Many people don’t know that a credit card company, cell phone provider, or virtually any other company can take money straight out of your paycheck to cover a debt.

Garnishment is a legal mandate that your employer withhold money from your paycheck and pay the creditor in question. A simple filing process and court approval allows them to contact your employer and instruct them to take money out of your paycheck to pay your outstanding debts. And more and more, garnishments are how collections agencies are getting paid.

If you want to stop wage garnishment, you can’t afford to ignore your debts. You may have drawers full of collections notices that you haven’t read, or you may have disconnected your phone to avoid the collections calls. This is normal — if you don’t know how to eliminate your debt or stop wage garnishment, you may not know where to start.

How can you stop wage garnishment?

  • Pay your debts. Sure, this works, but how practical is it? If you’re struggling with debt, you probably don’t have the money right now to pay off your debts. And since multiple creditors can file against you, unless you pay off all of your debt, you can’t guarantee that you’ll stop wage garnishment.
  • Work with your creditors on a payment plan. Try opening those collections notices and calling the number that they provide. Ask if they offer a payment plan. Offer a small payment each week or month that you know you can make consistently. Some creditors may work with you, but if the debt has already gone to collections, they may be less forgiving. Collections agencies make their money based on what they collect, so if they have a choice between a payment plan you might pay, or a garnishment that’s guaranteed, you can guess which is more attractive.
  • Get legal help. The best way to fully evaluate your options to stop wage garnishment is to get professional help. Although creating a payment plan may be a good first step, the creditor doesn’t have to abide by your agreement, so it doesn’t truly stop wage garnishment.  And the small payments you make may mean that you’re never truly debt-free. Consulting an Ohio bankruptcy lawyer can help you fully understand your options for eliminating your debt so you can make an educated decision.

It’s hard to stop wage garnishment alone


Big companies and collections agencies have entire departments of lawyers and experts whose job it is to get your money. Even your best efforts at fixing the situation may not be enough. Our Columbus bankruptcy attorneys can give you the support and answers that you need to stop wage garnishment and pursue bankruptcy if it’s right for you. Contact us today to schedule your free bankruptcy consultation.