It is not uncommon for me to receive a telephone call from a bankruptcy client at Halcomb Singler letting me know that they received a motion to lift the stay, but they don't know what it means.
Before we can discuss what it means to lift the automatic stay it is important to understand what the automatic stay does in a bankruptcy case. The automatic stay is a legal term that refers to the protection that a debtor receives from creditors during the course of a bankruptcy proceeding. Typically, (though not necessarily if the debtor has had bankruptcy cases dismissed in the prior year) when a bankruptcy petition is filed creditors are no longer allowed to try to collect from the debtor(s). This means that lawsuits are stopped, the phone will stop ringing off the hook and any wage garnishment will stop. The automatic stay is one of the reasons why filing bankruptcy can be such a relief to debtors and probably part of the reason bankruptcy is sometimes referred to as bankruptcy protection.
However, the automatic stay does not protect debtors in every circumstance. There are exceptions for divorce, criminal proceedings and several others that are beyond the scope of today's discussion. In addition, a creditor can ask the bankruptcy court for permission to "lift" the stay to continue collection efforts against the debtor in some circumstances. So, when a creditor files a Motion to Lift the Automatic Stay it typically means that they want to continue to collect or continue litigation on a debt that is not allowed due to the automatic stay.
The most common reason for a creditor to file a motion for relief from the automatic stay is because the debtor owns a home that he or she is surrendering (walking away from) in bankruptcy or because a debtor is behind in payments on a house that he or she wants to keep. Since the lender knows that the debtor is not going to be making them any more payments they want to get permission from the Court to either file a mortgage foreclosure lawsuit or to continue to litigate a mortgage foreclosure lawsuit that it filed prior to the debtor's bankruptcy. In order to lift the stay a creditor must show that it has a lack of adequate protection in property, that the debtor does not have equity in such property and that it is not necessary to an effective reorganization.
If a debtor wants to surrender a house through bankruptcy there is likely nothing that needs to be done in response to a motion to lift the automatic stay. However, if the debtor is attempting to retain the house an objection must be made to the motion or it will be granted by the judge. If the debtor files an objection the motion will be set for hearing in front of the judge. At that hearing the debtor will have the opportunity to tell the judge why the lender should not be able to lift the automatic stay. The most common reason that debtors object is that they disagree with the lender's accounting. In short, the debtor believes he or she has made 4 payments since the filing of the bankruptcy petition, but the lender only shows 1 payment has been made. If a debtor receives a motion for relief from stay it is important that he or she contact his or her attorney to discuss the motion. At my office I will typically send a debtor notice of the filing of a motion for relief from stay when I know they would like to keep their house and ask them to make an appointment to meet with me to discuss it.
Filing a bankruptcy is generally a very stressful time for clients and the receipt of a Motion to Lift the Automatic Stay is no exception. However, in my opinion, that stress can be greatly reduced by having a knowledgable bankruptcy attorney. Live in Indianapolis, Carmel, Zionsville, Fishers, Noblesville, or any other area in central Indiana and considering bankruptcy? I am happy to meet with you to discuss your options including both bankruptcy and non-bankruptcy options. To schedule a free initial bankruptcy consultation call (317) 575-8222 or click here.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Monday, June 27, 2011
Friday, June 24, 2011
Various Bankruptcy Fees You Hadn't Thought About
Most potential clients that I meet with at Halcomb Singler, LLP, regarding bankruptcy expect that if they decide to retain me to file their bankruptcy that I will charge a fee. However, there are some additional fees that debtors will have to pay to get through bankruptcy.
Prior to filing a bankruptcy there is a requirement that debtors complete a credit counseling course. This course can be done online, over the phone or in person with a credit counselor. Your attorney should be able to give you the name of a credit counselor to contact to satisfy this requirement. The fees between credit counseling companies vary. The particular counselor that I recommend to clients charges $35.00. Once you have finished the course the credit counselor will typically e-mail your attorney a copy of your certificate of completion for filing with the court.
Once your bankruptcy petition has been prepared and it is ready to file you will need to pay a filing fee. In the Southern District of Indiana, Indianapolis Division, the required filing fee is $299.00 for a Chapter 7 Bankruptcy and $274.00 for a Chapter 13 Bankruptcy. What is a filing fee? This is a fee that must be paid to the court in order to file the initial documents required in a bankruptcy case. The fee does not go to pay your lawyer. It is used to pay for the operation of the bankruptcy court and the trustee who reviews your bankruptcy case. Typically a debtor will pay this filing fee to his or her attorney, who will then pay it to the Court on the date of the filing of your bankruptcy petition.
If the filing fee is going to break you, talk to your attorney about the option of paying the fee in installments or having the fee waived altogether. In the Indianapolis bankruptcy court the filing fee for a Chapter 7 can be broken down into 4 installments if the court approves. Typically, a debtor would pay $75.00 to the Court on the date of filing, $75.00 another thirty (30) days after filing, $75.00 sixty (60) days after filing and $74.00 ninety (90) days after filing. I typically recommend that my clients do not ask the Court for permission to pay their filing fees over time because if the debtor is late on a filing fee installment then their bankruptcy petition is dismissed and they have to start again at the beginning, which is going to cost them additional attorney fees and filing fees. However, it is an option. In addition, in a very few cases it is possible to have the filing fee reduced or waived altogether. In a debtor cannot afford the filing fee a motion can be filed to have the filing fee waived. However, the judge may only waive your filing fee if your income is less than 150% of the official poverty line applicable to your family size and you are unable to pay the fee in installments. If you ask the judge to waive your filing fee this will require an additional hearing in front of the judge. It is very rare to have the filing fee waived. In fact, I have never had it happen in one of my cases. I do recall one case where the filing fee was reduced to $100.00, but that has only happened once.
Once your bankruptcy petition has been filed there will be an additional fee to complete the financial management course. Typically this fee is lower than the credit counseling course and is normally $10.00 to $15.00. This is a very important course because if you fail to take it your case will be closed without a discharge. If you are interested in addition information on the financial management course please see my previous blog posting on financial management.
As you can see, it is important not only to factor in the cost of attorney's fees if you are filing a bankruptcy, but also the additional fees that people often overlook. Since these fees can run almost $350.00 they should be taken into account when you are budgeting how to pay for your bankruptcy.
For a free initial consultation at Halcomb Singler, LLP, Carmel, Indiana, cal 317-575-8222 to set up an appointment or click here and our office will contact you to set up an appointment. These appointments typically take about an hour and we can explore whether or not you are a good candidate for bankruptcy and discuss other options that may be available to help you deal with your debt.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Prior to filing a bankruptcy there is a requirement that debtors complete a credit counseling course. This course can be done online, over the phone or in person with a credit counselor. Your attorney should be able to give you the name of a credit counselor to contact to satisfy this requirement. The fees between credit counseling companies vary. The particular counselor that I recommend to clients charges $35.00. Once you have finished the course the credit counselor will typically e-mail your attorney a copy of your certificate of completion for filing with the court.
Once your bankruptcy petition has been prepared and it is ready to file you will need to pay a filing fee. In the Southern District of Indiana, Indianapolis Division, the required filing fee is $299.00 for a Chapter 7 Bankruptcy and $274.00 for a Chapter 13 Bankruptcy. What is a filing fee? This is a fee that must be paid to the court in order to file the initial documents required in a bankruptcy case. The fee does not go to pay your lawyer. It is used to pay for the operation of the bankruptcy court and the trustee who reviews your bankruptcy case. Typically a debtor will pay this filing fee to his or her attorney, who will then pay it to the Court on the date of the filing of your bankruptcy petition.
If the filing fee is going to break you, talk to your attorney about the option of paying the fee in installments or having the fee waived altogether. In the Indianapolis bankruptcy court the filing fee for a Chapter 7 can be broken down into 4 installments if the court approves. Typically, a debtor would pay $75.00 to the Court on the date of filing, $75.00 another thirty (30) days after filing, $75.00 sixty (60) days after filing and $74.00 ninety (90) days after filing. I typically recommend that my clients do not ask the Court for permission to pay their filing fees over time because if the debtor is late on a filing fee installment then their bankruptcy petition is dismissed and they have to start again at the beginning, which is going to cost them additional attorney fees and filing fees. However, it is an option. In addition, in a very few cases it is possible to have the filing fee reduced or waived altogether. In a debtor cannot afford the filing fee a motion can be filed to have the filing fee waived. However, the judge may only waive your filing fee if your income is less than 150% of the official poverty line applicable to your family size and you are unable to pay the fee in installments. If you ask the judge to waive your filing fee this will require an additional hearing in front of the judge. It is very rare to have the filing fee waived. In fact, I have never had it happen in one of my cases. I do recall one case where the filing fee was reduced to $100.00, but that has only happened once.
Once your bankruptcy petition has been filed there will be an additional fee to complete the financial management course. Typically this fee is lower than the credit counseling course and is normally $10.00 to $15.00. This is a very important course because if you fail to take it your case will be closed without a discharge. If you are interested in addition information on the financial management course please see my previous blog posting on financial management.
As you can see, it is important not only to factor in the cost of attorney's fees if you are filing a bankruptcy, but also the additional fees that people often overlook. Since these fees can run almost $350.00 they should be taken into account when you are budgeting how to pay for your bankruptcy.
For a free initial consultation at Halcomb Singler, LLP, Carmel, Indiana, cal 317-575-8222 to set up an appointment or click here and our office will contact you to set up an appointment. These appointments typically take about an hour and we can explore whether or not you are a good candidate for bankruptcy and discuss other options that may be available to help you deal with your debt.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Monday, June 20, 2011
Whether or Not to Surrender Your Home in Bankruptcy
After the decision to file bankruptcy has been made the next decision is often whether to keep the house. This is a very difficult decision and not one that should be taken lightly. At Halcomb Singler I counsel clients regarding whether or not to surrender their home in many bankruptcy cases. I recognize that it is an extremely difficult decision for debtors who decide to surrender their homes. However, I encourage debtors to think about life after bankruptcy when making this decision and to strive to take as much emotion out of the decision as possible. But what should debtors take into consideration when attempting to make this very difficult decision?
First and foremost I believe that debtors should take a good hard look at their budget and determine whether or not they can afford the house moving forward. It is important to think about not only the mortgage expense itself, but the costs of owning and maintaining the house. I find many debtors focus on their mortgage payment and think they should keep the house because they would pay just as much money in rent as the mortgage payment. While this is often true, it is important to remember that when you rent you don't have to pay to replace the dishwasher or paint the exterior. The expenses of maintaining the home should not be taken lightly because it is often these expenses that cause financial hardship. I urge debtors to keep in mind that they want to start off on the right financial foot after bankruptcy and if it is clear that they will not be able to maintain the home and make the payment that surrendering should be seriously considered. The last thing that you want is to end up in debt again in the future because a house is dragging you down.
Another factor to take into consideration is whether your home is under water. To be under water means that your house is worth less than you owe. Make sure that you are not adding sentimental value to the worth of your home. If possible, have a real estate agent pull comps or do a market analysis on the property. If you are significantly under water you should seriously consider surrendering the property. Keep in mind that none of us really know what will happen with the real estate market here in Indianapolis (or anywhere else really), but I wouldn't expect a $30,000.00 increase in the value of a $100,000.00 house in the next 5 years. Also keep in mind that if you are thinking that a move may be necessary for work or any other reason in the short-term that you will not be able to sell your home without bringing money to the closing table if you are under water.
In my opinion, the hardest thing for people to do when they are trying to make the decision of whether or not to keep their home is to take the emotion out of the decision. To some extent, this is an impossible feat. There is going to be emotion involved in this decision. However, it is important to remember that a house is made out of boards and drywall. The place you live with your family, where ever that may be, is your home. Your children can still be happy in a rented house. In my opinion, your kids will be happiest when you are happiest. If surrendering a house and freeing yourself of the stress that comes along with paying the mortgage and those unexpected expenses of homeownership are will make you happiest then your kids will notice.
I have spent this blog focusing on the reasons to let a house go and I want to stress that this is not the only option. There are many circumstances where it is a great idea to keep the house. If you have a fair amount of equity that is exempt in a bankruptcy proceeding, you are current on the payments and you have sufficient income to keep up with the mortgage payments and expenses without much trouble after the bankruptcy petition is filed then it makes sense to keep, or reaffirm, on the mortgage debt.
As I stated at the beginning of this blog, I believe that the decision of whether or not to keep a house is the second hardest decision for a debtor to make (next to deciding to file bankruptcy in the first place). An attorney who practices bankruptcy law should be able to make a recommendation regarding whether it is best to surrender your house. However, the final decision rests with you and it is important to make an informed rational decision that will help you recover financially after bankruptcy. If you live in the Indianapolis area and would like to meet to learn your options regarding debt settlement or bankruptcy call my office to schedule an appointment at 317-575-8222 or click here. There is no fee for this consultation.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
First and foremost I believe that debtors should take a good hard look at their budget and determine whether or not they can afford the house moving forward. It is important to think about not only the mortgage expense itself, but the costs of owning and maintaining the house. I find many debtors focus on their mortgage payment and think they should keep the house because they would pay just as much money in rent as the mortgage payment. While this is often true, it is important to remember that when you rent you don't have to pay to replace the dishwasher or paint the exterior. The expenses of maintaining the home should not be taken lightly because it is often these expenses that cause financial hardship. I urge debtors to keep in mind that they want to start off on the right financial foot after bankruptcy and if it is clear that they will not be able to maintain the home and make the payment that surrendering should be seriously considered. The last thing that you want is to end up in debt again in the future because a house is dragging you down.
Another factor to take into consideration is whether your home is under water. To be under water means that your house is worth less than you owe. Make sure that you are not adding sentimental value to the worth of your home. If possible, have a real estate agent pull comps or do a market analysis on the property. If you are significantly under water you should seriously consider surrendering the property. Keep in mind that none of us really know what will happen with the real estate market here in Indianapolis (or anywhere else really), but I wouldn't expect a $30,000.00 increase in the value of a $100,000.00 house in the next 5 years. Also keep in mind that if you are thinking that a move may be necessary for work or any other reason in the short-term that you will not be able to sell your home without bringing money to the closing table if you are under water.
In my opinion, the hardest thing for people to do when they are trying to make the decision of whether or not to keep their home is to take the emotion out of the decision. To some extent, this is an impossible feat. There is going to be emotion involved in this decision. However, it is important to remember that a house is made out of boards and drywall. The place you live with your family, where ever that may be, is your home. Your children can still be happy in a rented house. In my opinion, your kids will be happiest when you are happiest. If surrendering a house and freeing yourself of the stress that comes along with paying the mortgage and those unexpected expenses of homeownership are will make you happiest then your kids will notice.
I have spent this blog focusing on the reasons to let a house go and I want to stress that this is not the only option. There are many circumstances where it is a great idea to keep the house. If you have a fair amount of equity that is exempt in a bankruptcy proceeding, you are current on the payments and you have sufficient income to keep up with the mortgage payments and expenses without much trouble after the bankruptcy petition is filed then it makes sense to keep, or reaffirm, on the mortgage debt.
As I stated at the beginning of this blog, I believe that the decision of whether or not to keep a house is the second hardest decision for a debtor to make (next to deciding to file bankruptcy in the first place). An attorney who practices bankruptcy law should be able to make a recommendation regarding whether it is best to surrender your house. However, the final decision rests with you and it is important to make an informed rational decision that will help you recover financially after bankruptcy. If you live in the Indianapolis area and would like to meet to learn your options regarding debt settlement or bankruptcy call my office to schedule an appointment at 317-575-8222 or click here. There is no fee for this consultation.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Friday, June 17, 2011
Filing Bankruptcy with Halcomb Singler Indianapolis and Surrounding Areas
There are many great bankruptcy attorneys in Indianapolis and the surrounding areas. I would always urge any person considering filing a bankruptcy petition to consult with an attorney to assist them with the filing of the petition. Sometimes people ask me whether they can file a bankruptcy petition on their own without an attorney. The short answer to that question is, yes. An individual or couple may represent themselves in the filing of their bankruptcy petition. However, an individual or couple may also rewire their own home, do chiropractic manipulations on each other or repair the brakes on their own vehicles. You get the point. Just because you could, in theory, do something on your own does not mean that it makes sense to do so. Bankruptcy, in my opinion, is something that an individual should attempt to do on his or her own. There are simply too many rules and pitfalls that come along with bankruptcy to try to muddle your way through it. And, many of the actions that you may take just prior to the filing of a bankruptcy can cause problems once your case is filed.
Honestly, I am never excited when I see that one of the debtors being called prior to my case at bankruptcy court is pro se, or representing him or herself. Usually a pro se case means that it will take longer and that it will be painful to watch because the debtor will not understand what the trustee is asking or what requirements he or she may have missed. One of the most common errors I see people who have filed their own Chapter 7 bankruptcy make when I observe them at the 341 hearing is that on the date that he or she filed their bankruptcy petition they had $1,500.00 in their possession. However, they used that money to pay rent, make a car payment, or any other number of things and do not have that money at the time of the hearing. The pro se debtors are totally stunned when the trustee tells them that they are going to need $1,250.00 and the pro se debtor is trying to tell the trustee that they don't have $1,250.00 to give them. If the pro se debtor had an attorney the attorney likely would have advised that on the date of filing you are only allowed to have $350.00 that is exempt, or protected, from the trustee in cash or intangible funds in Indiana. An attorney would have advised the pro se debtor to pay the rent, car payment, etc., prior to the date that the bankruptcy petition was filed. But since the pro se debtor didn't have an attorney he or she just didn't know any better. The biggest problem with representing yourself in a bankruptcy is that you don't know what you don't know. Typing up the bankruptcy documents and filing them is the easy part. Anyone can do that....it is the knowledge of when to file them and what actions to take prior to or after the filing of the bankruptcy that an attorney can tell you.
I have already told you that I think there are many good bankruptcy attorneys in Indianapolis and the surrounding areas, but many people ask me why they should choose Halcomb Singler, LLP, for their bankruptcy advice. At Halcomb Singler we strive for excellent customer service. Even though we are attorneys, we recognize that attorneys are in the customer service business. We will return your phone calls and answer your e-mails and some attorneys are either not good about doing this or simply don't have the time to get this accomplished.
In addition, at Halcomb Singler, you will be dealing directly with your attorney. There will not be 3 people answering and screening your calls prior to being passed through to the attorney. The same goes with meetings. An attorney (not a legal assistant or paralegal) will meet with you each and every time you come to Halcomb Singler, not just during the first consultation. Finally, you will work with the same attorney during the pendency of your bankruptcy case. This is a benefit because if you have a question you know that you can ask someone with knowledge of your case. In addition, the attorney that represents you at your 341 hearing will be the same attorney you have worked with on your case. Some law firms have attorneys cover their hearings for them and you don't meet the attorney until the day of the 341 hearing. While this is certainly a permissible practice, at Halcomb Singler we avoid this because we want to make sure that our clients are comfortable on the day of their hearing. Overall, we understand that both making the decision to consider bankruptcy and the filing of a bankruptcy are very stressful times in the life of an individual and we do as much as we can to make it a smooth process.
If you live in Indianapolis, Carmel, Noblesville, Fishers, Zionsville or the surrounding areas and are considering bankruptcy please do not hesitate to call for your free consultation at (317) 575-8222 or click here.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses
Honestly, I am never excited when I see that one of the debtors being called prior to my case at bankruptcy court is pro se, or representing him or herself. Usually a pro se case means that it will take longer and that it will be painful to watch because the debtor will not understand what the trustee is asking or what requirements he or she may have missed. One of the most common errors I see people who have filed their own Chapter 7 bankruptcy make when I observe them at the 341 hearing is that on the date that he or she filed their bankruptcy petition they had $1,500.00 in their possession. However, they used that money to pay rent, make a car payment, or any other number of things and do not have that money at the time of the hearing. The pro se debtors are totally stunned when the trustee tells them that they are going to need $1,250.00 and the pro se debtor is trying to tell the trustee that they don't have $1,250.00 to give them. If the pro se debtor had an attorney the attorney likely would have advised that on the date of filing you are only allowed to have $350.00 that is exempt, or protected, from the trustee in cash or intangible funds in Indiana. An attorney would have advised the pro se debtor to pay the rent, car payment, etc., prior to the date that the bankruptcy petition was filed. But since the pro se debtor didn't have an attorney he or she just didn't know any better. The biggest problem with representing yourself in a bankruptcy is that you don't know what you don't know. Typing up the bankruptcy documents and filing them is the easy part. Anyone can do that....it is the knowledge of when to file them and what actions to take prior to or after the filing of the bankruptcy that an attorney can tell you.
I have already told you that I think there are many good bankruptcy attorneys in Indianapolis and the surrounding areas, but many people ask me why they should choose Halcomb Singler, LLP, for their bankruptcy advice. At Halcomb Singler we strive for excellent customer service. Even though we are attorneys, we recognize that attorneys are in the customer service business. We will return your phone calls and answer your e-mails and some attorneys are either not good about doing this or simply don't have the time to get this accomplished.
In addition, at Halcomb Singler, you will be dealing directly with your attorney. There will not be 3 people answering and screening your calls prior to being passed through to the attorney. The same goes with meetings. An attorney (not a legal assistant or paralegal) will meet with you each and every time you come to Halcomb Singler, not just during the first consultation. Finally, you will work with the same attorney during the pendency of your bankruptcy case. This is a benefit because if you have a question you know that you can ask someone with knowledge of your case. In addition, the attorney that represents you at your 341 hearing will be the same attorney you have worked with on your case. Some law firms have attorneys cover their hearings for them and you don't meet the attorney until the day of the 341 hearing. While this is certainly a permissible practice, at Halcomb Singler we avoid this because we want to make sure that our clients are comfortable on the day of their hearing. Overall, we understand that both making the decision to consider bankruptcy and the filing of a bankruptcy are very stressful times in the life of an individual and we do as much as we can to make it a smooth process.
If you live in Indianapolis, Carmel, Noblesville, Fishers, Zionsville or the surrounding areas and are considering bankruptcy please do not hesitate to call for your free consultation at (317) 575-8222 or click here.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses
Friday, June 10, 2011
Can a Creditor Garnish Your Next Paycheck?
When I meet with potential clients at Halcomb Singler, LLP, about bankruptcy in Indiana I often hear horror stories about what they have been told by debt collectors. I have heard of a collector telling a sick woman that if she didn't pay her bills that her children would have to pay them after she died. I have heard of a collector telling a person that they would call the police if the debt wasn't paid. Thankfully, these are two of the worst examples I have ever heard. However, it is very common for creditors to tell you that they are going to garnish your next paycheck.
Depending on the circumstances, this may or may not be true. In almost all circumstances in order to garnish wages the creditor must have filed a lawsuit. This does not mean that an attorney has sent a letter or that you received a certified letter from the creditor. You will know that a lawsuit has been filed because it will be delivered by the sheriff or via certified mail and will contain a summons and complaint. The summons and complaint will have a case number and will have been file-stamped by a the clerk of courts.
Once a summons and complaint are received you (the Defendant) have a specific amount of time to respond, depending on whether the case has been filed in small claims court or in plenary court (plenary court is everything that is not small claims). If you have been sued in small claims court, the current maximum that a creditor can claim in Indiana is $6,000.00. If you have been sued in small claims court there will be a date on the complaint where you need to appear at court to defend yourself. If you fail to appear on that date a default judgment may be entered against you. If you receive a complaint for plenary court there will be no court date noted on the complaint. In these cases you have between 20 and 23 days to respond (depending on how you received service) or a default judgment may be entered against you. In either situation, if you receive a complaint and do nothing a judgment will eventually be entered against you.
Once a judgment has been entered against you then the judgment creditor can take steps to garnish your wages. First they send interrogatories to your employer. Theses are questions about your pay that your employer must answer and send back to the court to verify your employment and rate of pay. Once the Court has received the answers back from your employer you may be eligible for garnishment. However, garnishment of your wages requires an order signed by the judge.
Therefore, if you have not had a lawsuit filed against you then any creditor who tells you that your next paycheck is going to be garnished is probably telling you a lie. However, if you have had a lawsuit filed against you and have received notice that a judgment was entered and your employer told you they received questions from the Court about your rate of pay there is a good chance that your next paycheck could be reduced by 25%, which is the current rate of pay that can be garnished in Indiana.
I believe that once you receive a summons and complaint it is time to meet with a lawyer. An attorney can help you determine how you should proceed whether it be by disputing the debt, entering into a payment arrangement with the creditor, making a lump sum settlement offer or filing a Chapter 7 or Chapter 13 bankruptcy. By the time you receive a lawsuit you need to have a plan of how to deal with the debt because it is not going to just go away on its own. If you live in Hamilton, Marion, Boone, Madison, Tipton, Howard, Hendricks, Johnson, Hancock or any other county in central Indiana and would like to speak with me about a complaint and summons and more information about bankruptcy and your options please click here for an appointment or call me at (317) 575-8222.
Depending on the circumstances, this may or may not be true. In almost all circumstances in order to garnish wages the creditor must have filed a lawsuit. This does not mean that an attorney has sent a letter or that you received a certified letter from the creditor. You will know that a lawsuit has been filed because it will be delivered by the sheriff or via certified mail and will contain a summons and complaint. The summons and complaint will have a case number and will have been file-stamped by a the clerk of courts.
Once a summons and complaint are received you (the Defendant) have a specific amount of time to respond, depending on whether the case has been filed in small claims court or in plenary court (plenary court is everything that is not small claims). If you have been sued in small claims court, the current maximum that a creditor can claim in Indiana is $6,000.00. If you have been sued in small claims court there will be a date on the complaint where you need to appear at court to defend yourself. If you fail to appear on that date a default judgment may be entered against you. If you receive a complaint for plenary court there will be no court date noted on the complaint. In these cases you have between 20 and 23 days to respond (depending on how you received service) or a default judgment may be entered against you. In either situation, if you receive a complaint and do nothing a judgment will eventually be entered against you.
Once a judgment has been entered against you then the judgment creditor can take steps to garnish your wages. First they send interrogatories to your employer. Theses are questions about your pay that your employer must answer and send back to the court to verify your employment and rate of pay. Once the Court has received the answers back from your employer you may be eligible for garnishment. However, garnishment of your wages requires an order signed by the judge.
Therefore, if you have not had a lawsuit filed against you then any creditor who tells you that your next paycheck is going to be garnished is probably telling you a lie. However, if you have had a lawsuit filed against you and have received notice that a judgment was entered and your employer told you they received questions from the Court about your rate of pay there is a good chance that your next paycheck could be reduced by 25%, which is the current rate of pay that can be garnished in Indiana.
I believe that once you receive a summons and complaint it is time to meet with a lawyer. An attorney can help you determine how you should proceed whether it be by disputing the debt, entering into a payment arrangement with the creditor, making a lump sum settlement offer or filing a Chapter 7 or Chapter 13 bankruptcy. By the time you receive a lawsuit you need to have a plan of how to deal with the debt because it is not going to just go away on its own. If you live in Hamilton, Marion, Boone, Madison, Tipton, Howard, Hendricks, Johnson, Hancock or any other county in central Indiana and would like to speak with me about a complaint and summons and more information about bankruptcy and your options please click here for an appointment or call me at (317) 575-8222.
When I meet with potential clients at Halcomb Singler, LLP, about bankruptcy in Indiana I often hear horror stories about what they have been told by debt collectors. I have heard of a collector telling a sick woman that if she didn't pay her bills that her children would have to pay them after she died. I have heard of a collector telling a person that they would call the police if the debt wasn't paid. Thankfully, these are two of the worst examples I have ever heard. However, it is very common for creditors to tell you that they are going to garnish your next paycheck.
Depending on the circumstances, this may or may not be true. In almost all circumstances in order to garnish wages the creditor must have filed a lawsuit. This does not mean that an attorney has sent a letter or that you received a certified letter from the creditor. You will know that a lawsuit has been filed because it will be delivered by the sheriff or via certified mail and will contain a summons and complaint. The summons and complaint will have a case number and will have been file-stamped by a the clerk of courts.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Monday, June 6, 2011
Bankruptcy's Financial Management Course
If you have file a bankruptcy petition or are considering the need for bankruptcy you will soon be aware that there are a few hoops that must be completed on top of the filing of your bankruptcy petition. These "hoops" as I call them are financial courses. One is called a Credit Counseling course and must be completed (in most cases) prior to the filing of the bankruptcy petition. The second is called a Financial Management Course and must be completed within 45 days of the 341 meeting of creditors (this hearing must be attended by all bankruptcy debtors and is typically 30 to 45 days after the filing of your bankruptcy petition). Most of my clients at Halcomb Singler complete these courses online. However, it is possible to complete them via telephone if that is your preference. The courses are designed to put bankruptcy debtors on a good path toward financial health after the filing of a bankruptcy by giving information and requiring that the debtor(s) take a quiz in order to receive his or her certificate of completion.
As the title suggests, I am going to concentrate on the Financial Management Course today. The financial management course is also often referred to as the "post-filing" course. This is true because you cannot complete the financial management course until after your bankruptcy petition is filed. It is required that you complete this second course within 45 days of your 341 hearing. It is very important that this course is completed within the time limits. This is true because if the debtor fails to complete this course and file the necessary form with the court within the allotted time, the Court may (and does) close the case without a discharge. This means that the person has gone through the bankruptcy process and has not received the benefit of being discharged from his or her debts.
If a bankruptcy case is closed without a discharge it normally possible to successfully petition the Court to reopen the bankruptcy to allow the debtor to file the necessary form to allow for the discharge of the debtor's debts. However, this process requires an additional filing fee and likely addition attorney fees. Therefore, I typically ask my clients to complete their financial management course as soon as their bankruptcy petition is filed to insure that we do not have a case where the debtors fail to complete the financial management course on time. There is a fee that the provider charges for this class. Typically this course would cost about $15.00 and it does take about two (2) hours to complete the course. I have had many bankruptcy debtors tell me that they found the course very helpful. So, be aware that there are real consequences to failing to complete this course and get it out of the way early in your bankruptcy.
For those living in Indianapolis, Carmel, Fishers, Noblesville, Zionsville, or any area near Indianapolis I offer a free consultation to those considering bankruptcy. I will sit down with you, go over your situation, give you my opinion as to whether bankruptcy would be beneficial for you, and answer your questions regarding bankruptcy. For your free consultation call me at (317) 575-8222 or click here to request that our office contact you to schedule an appointment.
As the title suggests, I am going to concentrate on the Financial Management Course today. The financial management course is also often referred to as the "post-filing" course. This is true because you cannot complete the financial management course until after your bankruptcy petition is filed. It is required that you complete this second course within 45 days of your 341 hearing. It is very important that this course is completed within the time limits. This is true because if the debtor fails to complete this course and file the necessary form with the court within the allotted time, the Court may (and does) close the case without a discharge. This means that the person has gone through the bankruptcy process and has not received the benefit of being discharged from his or her debts.
If a bankruptcy case is closed without a discharge it normally possible to successfully petition the Court to reopen the bankruptcy to allow the debtor to file the necessary form to allow for the discharge of the debtor's debts. However, this process requires an additional filing fee and likely addition attorney fees. Therefore, I typically ask my clients to complete their financial management course as soon as their bankruptcy petition is filed to insure that we do not have a case where the debtors fail to complete the financial management course on time. There is a fee that the provider charges for this class. Typically this course would cost about $15.00 and it does take about two (2) hours to complete the course. I have had many bankruptcy debtors tell me that they found the course very helpful. So, be aware that there are real consequences to failing to complete this course and get it out of the way early in your bankruptcy.
For those living in Indianapolis, Carmel, Fishers, Noblesville, Zionsville, or any area near Indianapolis I offer a free consultation to those considering bankruptcy. I will sit down with you, go over your situation, give you my opinion as to whether bankruptcy would be beneficial for you, and answer your questions regarding bankruptcy. For your free consultation call me at (317) 575-8222 or click here to request that our office contact you to schedule an appointment.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Wednesday, June 1, 2011
Affording the Payment is Different than Affording the Debt
I meet with people all the time who are really trying to dig their way out of debt. They come to Halcomb Singler, LLP, to discuss their options including debt consolidation/creditor workouts, mortgage modifications/foreclosure defense as well as Chapter 7 and Chapter 13 bankruptcy. And one thing I have noticed is that many people have a hard time understanding how they are getting behind on bills because when they add up their income and expenses the numbers are about the same. Over the years I have observed that just because you can afford the payment doesn't mean you can afford the debt and I'd like to discuss what exactly I mean by that in the rest of this blog entry.
One example that I see quite often is that an individual or couple has gotten behind on mortgage payments. The mortgage payment in and of itself is typically very reasonable and the person I am meeting with believes it is an affordable payment. However, time and time again people fail to take into account all of the upkeep that comes with owning a home. I myself have to write a fairly substantial check for the replacement of my air conditioning and furnace tomorrow.....and at some point so will each and every person who owns a home. It is very easy to forget about the fact that the appliances aren't going to last forever and that the home will need to be painted (inside and out) on occasion and that the plumbing in the bathroom doesn't last forever, etc. The list could go on forever. However, until you have been a homeowner through a few planned and unplanned repairs or upgrades I believe it is difficult to appreciate how much it really costs to own a home. Certainly when you purchase a home the monthly payment, taxes and insurance should be taken into account in considering whether you can afford the home. In my experience people are very good at taking these items into account. However, make sure that you can afford more than the monthly payment prior to purchasing a home because if the decision is made taking only the payment into consideration it can spell disaster for your budget and financial health.
But the "I can afford the payment" attitude goes far beyond the purchase of a home. It can be used to justify a new piece of jewelry when there is a 12 months same as cash deal at the store, the purchase of an item on a television shopping network or the new play gym for the kids. I believe that the "I can afford the payment" mentality is very dangerous and often gets people into financial trouble because instead of looking at the total amount of debt that they may incur they are only looking at the monthly payment. It is very easy for a person to accumulate thousands of dollars of debt by continuing to tell themselves that they can afford another $80.00 a month or another $150.00 a month. However, if a short-term layoff or health problem prevents that person from earning a paycheck for even a month it can be the beginning of a downward spiral that ends in bankruptcy. Once a few payments are missed that it can be very difficult to recover even if one finds another job or the health issue is resolved. This is because once a payment is missed the interest rates go way up and there are late fees tacked on to what is already owed on the payments that were once affordable. It is simply a cycle that is very hard to escape from once it has started.
So how do we avoid the "I can afford the payment" attitude? It's simple and two-fold. The first rule is to make sure that you are living below your means. Living below your means is a very subjective statement. To me it means having enough money left over after you have paid your monthly bills each month to save at least 20% of what you earn after taxes for retirement and a rainy day. In my opinion, if you are living in a way that you are able to pay your monthly bills each month, but could not pay $1,000.00 for an unexpected vehicle repair without using credit you are living outside of your means. The second rule to avoidance of the "I can afford the payment" lifestyle is to shun credit. If you want the new appliance save up for it and pay cash. If you want another car figure out how much you want to spend and start setting aside some amount monthly to go for that car. Don't buy something you can pay for in cash. (If you've read my other blog postings you know that a house and your own student loans are my exceptions to this rule). Get yourself to a place where you are uncomfortable owing money to anyone or anything. If you don't have all of the payments to think about then the temporary loss of a job or health problem I spoke about before are less of a financial crisis and will cause you and your family less stress.
So avoid the "I can afford the payment" analysis for your next purchase and start to improve your financial health. If you are a person living in the Indianapolis/Hamilton County area who has, unfortunately, gotten to a point where the payments are overwhelming and you are not sure what to do next I am happy to meet with you to try to work out a plan out of debt. There is no fee for this consultation. Just click here to fill out our information page (we don't ask for your address) and my office will contact you for an appointment or call at (317) 575-8222.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
One example that I see quite often is that an individual or couple has gotten behind on mortgage payments. The mortgage payment in and of itself is typically very reasonable and the person I am meeting with believes it is an affordable payment. However, time and time again people fail to take into account all of the upkeep that comes with owning a home. I myself have to write a fairly substantial check for the replacement of my air conditioning and furnace tomorrow.....and at some point so will each and every person who owns a home. It is very easy to forget about the fact that the appliances aren't going to last forever and that the home will need to be painted (inside and out) on occasion and that the plumbing in the bathroom doesn't last forever, etc. The list could go on forever. However, until you have been a homeowner through a few planned and unplanned repairs or upgrades I believe it is difficult to appreciate how much it really costs to own a home. Certainly when you purchase a home the monthly payment, taxes and insurance should be taken into account in considering whether you can afford the home. In my experience people are very good at taking these items into account. However, make sure that you can afford more than the monthly payment prior to purchasing a home because if the decision is made taking only the payment into consideration it can spell disaster for your budget and financial health.
But the "I can afford the payment" attitude goes far beyond the purchase of a home. It can be used to justify a new piece of jewelry when there is a 12 months same as cash deal at the store, the purchase of an item on a television shopping network or the new play gym for the kids. I believe that the "I can afford the payment" mentality is very dangerous and often gets people into financial trouble because instead of looking at the total amount of debt that they may incur they are only looking at the monthly payment. It is very easy for a person to accumulate thousands of dollars of debt by continuing to tell themselves that they can afford another $80.00 a month or another $150.00 a month. However, if a short-term layoff or health problem prevents that person from earning a paycheck for even a month it can be the beginning of a downward spiral that ends in bankruptcy. Once a few payments are missed that it can be very difficult to recover even if one finds another job or the health issue is resolved. This is because once a payment is missed the interest rates go way up and there are late fees tacked on to what is already owed on the payments that were once affordable. It is simply a cycle that is very hard to escape from once it has started.
So how do we avoid the "I can afford the payment" attitude? It's simple and two-fold. The first rule is to make sure that you are living below your means. Living below your means is a very subjective statement. To me it means having enough money left over after you have paid your monthly bills each month to save at least 20% of what you earn after taxes for retirement and a rainy day. In my opinion, if you are living in a way that you are able to pay your monthly bills each month, but could not pay $1,000.00 for an unexpected vehicle repair without using credit you are living outside of your means. The second rule to avoidance of the "I can afford the payment" lifestyle is to shun credit. If you want the new appliance save up for it and pay cash. If you want another car figure out how much you want to spend and start setting aside some amount monthly to go for that car. Don't buy something you can pay for in cash. (If you've read my other blog postings you know that a house and your own student loans are my exceptions to this rule). Get yourself to a place where you are uncomfortable owing money to anyone or anything. If you don't have all of the payments to think about then the temporary loss of a job or health problem I spoke about before are less of a financial crisis and will cause you and your family less stress.
So avoid the "I can afford the payment" analysis for your next purchase and start to improve your financial health. If you are a person living in the Indianapolis/Hamilton County area who has, unfortunately, gotten to a point where the payments are overwhelming and you are not sure what to do next I am happy to meet with you to try to work out a plan out of debt. There is no fee for this consultation. Just click here to fill out our information page (we don't ask for your address) and my office will contact you for an appointment or call at (317) 575-8222.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
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