Provided below, is a brief overview of the stages in a bankruptcy proceeding:

1. Pre-bankruptcy financial counseling: Before you can file for bankruptcy, you will be required to meet with a government-approved credit counselor. During this initial meeting, your credit counselor will discuss your bankruptcy options, and help you create a budget plan based on your current financial situation. This is designed to help you decide whether you really need to file for bankruptcy, or if another option may be better suited for you.
2. Filing the initial paperwork: Next, your attorney will help you file the initial paperwork. This filing is complex, and you will be required to provide documentation of your current financial situation; income, assets and debts. Upon completion of the paperwork, your attorney will file your petition with the bankruptcy court, after reviewing it with you. This begins the official case timeline.
3. Review and automatic stay: Upon receipt the initial filing, the court will review your paperwork and grant an automatic stay. An automatic stay prevents creditors from harassing you to collect on your debts to those creditors during the bankruptcy proceedings.
4. Meeting of the creditors: The court and the bankruptcy trustee assigned to your case will schedule for a meeting of the creditors, where you, your attorney and your bankruptcy trustee will meet with any creditors who attend. If you elect to file for Chapter 13 bankruptcy, a three to five-year repayment plan will be formulated. If you elect to file for Chapter 7 bankruptcy, the bankruptcy trustee will review all of your assets to make sure they’re exempt.
5. Debtor education course: Next, you will be required to complete a debtor education course. These courses are often available online, and take a few hours to complete. The courses are designed to teach you how to properly manage your money, so that you do not find yourself in a similar circumstance down the road.
6. Notice of discharge: When your case is finished, and your debts are discharged, you will receive a notice of discharge. The timing of this notice depends on whether you file for Chapter 7 or Chapter 13.

After the initial filings, the bankruptcy process is easier than you may think. Working with our skilled bankruptcy attorneys can make it even easier. For help with your bankruptcy case, call Dworken & Bernstein today.

It isn’t a magic bullet, however—there are certain types of debt that cannot be discharged. Here’s a brief overview of what you can expect from filing. As always, talk to an attorney for specific advice for your case.

What Bankruptcy Can Do

Filing for bankruptcy will accomplish the following:

• Temporarily stop eviction or foreclosure: As long as your eviction or foreclosure is still in progress, filing may give you a little extra time. You may be able to bring your accounts current under a Chapter 13 payment plan.
• Keep creditors from harassing you: Once you file, creditors must immediately stop harassing you.
• Discharge secured debt by giving up the asset: If you have secured debt (mortgages and car loans are two common types), you may get rid of your debt by giving up your car, home or other property to wipe out the debt.
• Discharge unsecured debt: Bankruptcy allows you to wipe out unsecured debt, such as utility bills, credit card debt and more.

Depending on the type of bankruptcy for which you file, you may be entitled to additional benefits. These include keeping certain assets that aren’t protected under exemptions when you file for Chapter 13.

What Bankruptcy Can’t Do

There are certain types of debt that bankruptcy does not wipe out. Most tax debts, child support, spousal support and student loans will not be discharged. There are limited exceptions in each case, of course—your attorney will let you know whether you may qualify for one of them. Furthermore, if you fail to list a debt in your bankruptcy filing, or your debt is related to fraud, you may not be able to wipe it out.

Finally, bankruptcy can’t help you keep assets you can’t afford. For example, Chapter 13 allows debtors to keep their houses as long as they keep up with their payment plan—and current payments. If you’re unable to afford both your payment plan and the past-due amount, the bank can foreclose.

For help filing for bankruptcy, call Dworken & Bernstein today.

Now imagine that you’ve been notified that you were overpaid unemployment insurance—and it’s your responsibility to pay the state back. Suddenly, bankruptcy may look like your only option. Can you discharge unemployment overpayments in bankruptcy, or is that one of the rare debt types that cannot be discharged?

Unemployment Overpayments and Bankruptcy

Ohio officials recently announced that the state overpaid unemployment to the tune of $1.2 billion. Even if you received a notice that you were overpaid—and owe the state money as a result—you still have some options available.

First, you may be eligible for a waiver. If the mistake was a clerical error on their end (and not fraud on your part), Congress’s Continued Assistance Act makes it possible for states to forgive and waive overpayments. However, Ohio doesn’t have a set policy on waivers yet, so you may need to pursue another option.

Next, you can file an appeal. A lawyer can help you navigate this complex process. If all else fails, your attorney can help you negotiate a payment plan with the state. These options could help you avoid filing for bankruptcy, which would allow you to avoid credit and related consequences.

If you do choose to file for bankruptcy, here’s the good news: there’s nothing that exempts unemployment overpayments from being discharged. You can file for Chapter 7 or Chapter 13 bankruptcy—the right type will depend on your financial situation. If the debt is massive (some Ohioans report that they were overpaid tens of thousands of dollars), and you are ineligible for a waiver or payment plan, this may be the best choice.

Discuss Your Options with an Attorney

When you’re considering bankruptcy, it’s important that you talk to an attorney. They’ll talk to you about your options, whether that includes appealing decisions, filing for a waiver or choosing which type of bankruptcy is right for you.

An experienced bankruptcy attorney will also help you strategize. For example, filing for Chapter 13 bankruptcy allows you to keep some assets, as long as you stay current on your payment plan. Your lawyer will assist you in negotiating the most favorable outcome—if you have to file at all.

For help with your bankruptcy case, call Dworken & Bernstein today.

Depending on the type of bankruptcy petition you file, the answer may be different. Here’s a basic overview of how bankruptcy can affect applying for a mortgage. As always, be sure to consult with your attorney. The specific details of your case may affect the answer.

Chapter 7 Bankruptcy

When you file for Chapter 7 bankruptcy, some assets could be sold off to pay your creditors, though that typically doesn’t happen, for multiple reasons. But either way, you will receive your bankruptcy “discharge.” Once the case is completed, you will no longer have the debt hanging over your head.

A Chapter 7 bankruptcy stays on your credit report for a full 10 years. However, that doesn’t mean you’ll have to wait the entire decade to get a mortgage. As long as you actively work to rebuild your credit score, and avoid accruing more unpaid debt, you may be able to get a mortgage in a few short years. Don’t try to apply while your bankruptcy case is still in court, though—lenders are unlikely to want to extend credit at that point.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows you to hang on to your assets. You’ll come up with a three to five-year repayment plan. At the end of the repayment period, if you’ve kept up with your payments faithfully, your debt is discharged.

A Chapter 13 bankruptcy only stays on your credit report for seven years. However, it’s wise to forego a mortgage application until after your repayment plan is complete.

As you can see, filing for bankruptcy will affect your financial affairs for up to a decade. On the other hand, it’s not the credit score death sentence that it might initially seem. As long as you meet your obligations and have a good debt-to-income ratio, lenders are more likely to take a chance.

For assistance with your bankruptcy case, call Dworken & Bernstein today.

Repossession is upsetting and even scary for some people. However, you may be able to get your car back by filing for bankruptcy. Here is an overview of your options.

Repossessed Cars Explained

When creditors repossess your car, they usually tell you how much you must pay to get the vehicle back. This is usually the amount by which you fell behind, plus any fees they tack on as a result.

If you do nothing, the car will be auctioned off. If they get less for the car than you owe on the loan, you’ll be presented with a vehicle loan deficiency—in other words, a bill for the remaining balance.

Chapter 13 Bankruptcy

If your car has been repossessed and you want to get it back, you can file for Chapter 13 bankruptcy. This is often not worth the cost of the Chapter 13, though a Chapter 13 may be very worthwhile if the default involves your home. Note that this type of bankruptcy allows you to keep some of your assets, such as your home and car. However, in either case, you will repay your creditors over the next five years through an agreed-upon payment plan. If you fall behind on those payments, your bankruptcy claim can be dismissed, and your assets repossessed.

Chapter 7 Bankruptcy

If your car has been repossessed, and you don’t want to keep it, filing for Chapter 7 bankruptcy will eliminate the need to pay the vehicle loan deficiency. If you qualify for Chapter 7 bankruptcy, you may be required to sell some of your assets, but you will typically be permitted to keep most of those assets. Any proceeds are used to repay your creditors—even if you can’t raise the full amount—and your debts are permanently discharged.

In short, it may be possible to get your repossessed vehicle back by filing for bankruptcy. However, it’s important that you talk to an attorney first. Bankruptcy can wipe the slate clean and give you a chance for a fresh start, but each type comes with its own special rules and obligations. You need to understand what you’re agreeing to before you can make the right decision for your situation.

For help with bankruptcy and vehicle repossession, turn to Dworken & Bernstein.

Debt Collectors and Bankruptcy

When you file for bankruptcy, all creditors are instructed to immediately stop contacting you to collect your debt. Creditors agree to do this because they’re ordered to do so by the “Automatic Stay”. They may get a portion of the debt paid off through bankruptcy. They may also sell off your debt to debt collectors.

When a debt collector starts contacting you prior to a bankruptcy proceeding, refer all communication to your attorney. If the debt in question has been included in your filing, the debt collectors should not be calling. If, however, you accidentally left a legitimate debt out of your paperwork, your attorney will discuss your options with you.

The same applies when a debt collector contacts you after the debt has been discharged in bankruptcy. Once your bankruptcy case is completed, you are no longer liable for those debts. Do not be intimidated into paying anything until you’ve cleared it with your bankruptcy lawyer.

Is the Debt Really Yours?

It’s worth noting that you may not be responsible for the debt in the first place. Debt collectors must prove that they own your debt—that is, if someone other than your original creditor sues you, they must show that they bought your debt.

Ohio also limits the amount of time debt collectors have to take action on credit card debt. If it’s been more than six years since the latest of the debt being overdue and your last payment, you’re off the hook. Finally, you may have been mistakenly identified as the debtor, or someone else fraudulently incurred the debt in your name. You should not be liable in these cases.

What to Do if a Debt Collector Files a Lawsuit

If the debt collectors file a lawsuit during or after your bankruptcy, collect all documentation regarding the debt. Write down all the dates and times the debt collectors call you, and include the collector’s name, company and whether the person tried to harass or intimidate you. Then pass this information on to your attorney. They’ll help you determine the best course of action.

For help with your debt collection issues, call the bankruptcy lawyers at Dworken & Bernstein today.

Since your marital status and divorce settlement affect your bankruptcy filing, be sure to talk to an attorney before moving forward. Here are a few things you should know before you file.

• Bankruptcy does not absolve you from paying child support. Child support is one of the few types of debt that is never discharged in bankruptcy. If you’re struggling to pay your child support obligations, your best option may be to petition the family court for a support modification. Otherwise, the debt will continue to accrue. This can result in serious consequences.
• You can file for bankruptcy before or after divorce. Most couples want to know whether it’s better to file before or after divorce. This is entirely dependent on what kind of assets and debt you have, and what you intend to keep after splitting. Your domestic relations and bankruptcy attorneys can work together to help you decide whether a joint bankruptcy or filing separately (before or after divorce) would be most beneficial.
• You can file for bankruptcy jointly or separately. Whether you file jointly or separately depends on whether you’re willing to work together. For example, filing jointly doubles your exemptions, which may mean you get to hold on to valuable assets like your home. On the other hand, if only one spouse files before divorcing, the other spouse will be on the hook for joint debt that is discharged. The non-filer’s divorce attorney can negotiate for partial or equal repayment in the marital settlement.
• Ohio is an equitable distribution state—plan accordingly. Unlike community property states, debtors in Ohio will be responsible for debts based solely on creditor agreements. Your family law judge may also order either spouse to help pay separate debts, in whole or in part. For example, this can happen when one spouse’s name is on the mortgage and the other stayed home to raise the children.
• The division of assets in your divorce will affect your bankruptcy. Finally, when you file for bankruptcy after divorce, be prepared to list all of your assets from the divorce settlement. People who receive spousal or child support must list it as income, and people who pay support should list it as an expense. Also, transfers that took place in the divorce action will be reviewed by the Bankruptcy Court.

Divorce and bankruptcy can be convoluted, overwhelming experiences. Get the legal help you need when you call Dworken & Bernstein today.

Many clients ask if they can discharge their student loans in bankruptcy. Historically, the answer would have been no—but times are changing, and there is some hope on the horizon.

Proving Undue Hardship

Undue hardship means that it’s difficult, if not impossible, to pay your loans back. It is extremely hard to prove that your student loans present an “undue hardship,” but it is possible. It’s smart to work with an experienced bankruptcy attorney for the best results. He or she may be able to make an argument based on your past relationship with the loan and/or based on your income and expenses that some or all of the loan might be discharged.

Potential New Legislation

Don’t lose hope. As you may know, President Biden has been in the news because he and our new Secretary of Education are “looking into” the legality of canceling up to $50,000 in student loans for everyone. There have also been proposals to attack student loan debt by Biden, and others, and to expand the forgiveness of student loans after a certain amount of years if a certain percentage has been paid. Additionally, Senator Elizabeth Warren has introduced a bill that would get rid of the exemptions for discharging student loan debt in bankruptcy. If either of these legislative options come to pass, it would be a breath of fresh air for many.

The best way to find out whether you can get your loans discharged is to work with a skilled bankruptcy attorney. Call Dworken & Bernstein to determine your options for discharging debt in bankruptcy.

As always, it’s good to have an experienced bankruptcy attorney helping with your case. They’ll be able to guide you through the process to get the best results possible.

How to Prove Self-Employment Income

Normally, people who file for bankruptcy provide income proof like pay stubs and tax returns. That’s harder when you’re self-employed. Chances are that you pay yourself out of your business funds rather than create your own pay stubs. Additionally, self-employment income is usually more irregular than working for someone else; especially when you’re starting your business.

If you’ve kept good business records, however, it won’t be too difficult to show your own income. You’ll need to show two to several years of income tax statements (depending how you’re filing),  bank account and business statements, and business receipts like invoices, cash payments, check stubs and more. This will help the bankruptcy court determine the full extent of your income.

The Importance of Profit and Loss Statements

It’s always a good idea to not only have an accountant, but have them create profit and loss statements for your business. If you don’t have one, you can do it yourself. The goal is to create a complete and detailed financial history. It should show the profits you gained as well as the expenses you incurred.

If you’re filing for bankruptcy, you may have more losses than gains—and that’s fine. You must be accurate and complete in your accountings, even if it’s embarrassing or painful to think about. Courts do not look kindly upon people who omit important evidence. In fact, it could jeopardize your entire case.

While self-employment presents a few challenges, like a more complicated paper trail, there’s no reason you can’t file for Chapter 7, or even Chapter 13 bankruptcy in Ohio. Working with a bankruptcy attorney can help you determine the best course of action so you can recover quickly from your loss.

If you need help exploring your options, call Dworken & Bernstein for a consultation today.

Here is a basic overview of the two most common types of personal bankruptcy. Before you file the initial paperwork, consult an experienced bankruptcy attorney to discuss your options.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy isn’t available to everyone; you have to pass the “means test” to ensure your income is under the maximum limit. However, if you do qualify, it will wipe out your unsecured debt like credit cards and medical bills.

If you’re eligible, you are required to sell all of your non-exempt assets to pay off your creditors. Some property can be protected by an exemption, such as household goods, clothing, cars, and equity in your home. The rest of your valuable property must be documented so the bankruptcy trustee can determine what must be sold. If you have no non-exempt assets, you won’t have to sell anything.

Once you’ve complied with the requirements, your remaining unsecured debt is forgiven—even if the assets weren’t enough to pay off your entire debt. During the course of the case, debt collectors are prevented from contacting you. After the discharge, you are no longer liable for paying them back.

Chapter 13 Bankruptcy

You can file for Chapter 13 bankruptcy if you don’t pass the means test for Chapter 7, or if you want to keep some of your assets. Chapter 13 bankruptcy requires the debtor to create a repayment plan which reimburses creditors for all or a portion of your debt. This type of bankruptcy is suitable for people with regular income who are simply behind on their bills and need to prevent litigation, wage garnishment, or catch up on their mortgage. How much you’ll pay monthly depends on your debt, income and other important factors.

When you file for Chapter 13 bankruptcy, keep in mind that you’ll need to repay your creditors an amount equal to the assets you are retaining.

A Word of Caution

Filing for bankruptcy will not discharge all of your debts. For example, child support, alimony, and most tax liens are not eligible. It’s important that you discuss your case with an attorney to get a clear picture of how each type of bankruptcy may affect you.

Talk to an Ohio Bankruptcy Attorney Today

When you need bankruptcy assistance from an experienced lawyer, turn to Dworken & Bernstein. Our attorneys can help you make the right choices for your individual needs. Call today for a consultation.