Frequently Asked Questions
WHAT MAKES US DIFFERENT FROM OTHER LAW FIRMS?
HOW IS BANKRUPTCY DIFFERENT FROM A NEGOTIATED DEBT SETTLEMENT PLAN?
WHAT ARE THE BENEFITS OF FILING BANKRUPTCY?
CAN I BE FIRED FROM MY JOB IF I FILE BANKRUPTCY?
WHAT TYPE OF DEBTS CAN BE INCLUDED IN BANKRUPTCY?
WHAT PROPERTY CAN I KEEP IF I FILE FOR BANKRUPTCY?
HOW DO I KNOW IF I SHOULD FILE FOR BANKRUPTCY?
WHEN IS IT TOO LATE TO FILE FOR BANKRUPTCY?
WHAT ARE THE DIFFERENT TYPES OF BANKRUPTCY?
WHICH TYPE OF BANKRUPTCY SHOULD I FILE?
WHAT WILL HAPPEN TO MY CREDIT IF I FILE BANKRUPTCY?
WILL MY BANKRUPTCY HURT OTHER PEOPLE?
IF I AM MARRIED, MUST MY SPOUSE FILE WITH ME?
HOW DO I GET STARTED FILING FOR BANKRUPTCY?
HOW MUCH DOES IT COST TO FILE BANKRUPTCY?
WHAT MAKES US DIFFERENT FROM OTHER LAW FIRMS?
Four things make Marshall D. Cohen Co., LLC, different from other law firms.
First, we are committed one hundred percent to protecting your rights in bankruptcy. Bankruptcy law is the only type of law we practice, and we’ve been doing just this for over twenty years. We have represented thousands of individuals and businesses that have filed for bankruptcy protection. We have the experience to provide you with accurate and practical advice.
Second, we will be here after your case is completed, even years after your case is over, to make sure that your rights are upheld. We will be here to stand up for you against any illegal creditor attempts to collect money or damage your credit report after your bankruptcy is over.
Third, we understand how difficult the decision to file for bankruptcy can be. At a time when you may feel vulnerable, we will treat you with the respect and dignity you deserve. We will see that others treat you the same way. We will provide you with advice that focuses on obtaining the outcome you wish to achieve, rather than the outcome your creditors or others may tell you is possible.
Fourth, we strive to provide all of our clients with unmatched service. Whether returning your phone calls or answering your questions thoroughly, we always strive to respond quickly and efficiently.
WHAT IS BANKRUPTCY?
Bankruptcy is a legal proceeding in which a person who cannot pay all of his or her bills can obtain protection from creditors and eliminate his or her debts in whole or in part. Bankruptcy is provided for in the Constitution of the United States. The ability to file bankruptcy is established by federal law, and all bankruptcy cases are handled in federal court.
Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you. In bankruptcy you are asking the court to provide you with a discharge of your indebtedness. This discharge permanently stops your creditors from seeking to collect current debts from you.
HOW IS BANKRUPTCY DIFFERENT FROM A NEGOTIATED DEBT SETTLEMENT PLAN?
Bankruptcy differs from a negotiated debt settlement plan in two fundamental ways.
First, only bankruptcy can provide you with a discharge of your indebtedness. A discharge is an order from a federal court that prevents your creditors from ever attempting to collect the debts you currently owe. The discharge is permanent, and if a creditor violates your discharge, you may have the right to sue the creditor for money in a federal court. By contrast, in a negotiated debt settlement plan creditors must first voluntarily agree to accept less than the amount that is legally owed. A person’s credit report might show that the debt was settled, but unless creditors agree to provide a person with a legally binding release, debt settlement cannot provide any legal protection.
The second difference is that the bankruptcy discharge is permanent and binding on creditors. Bankruptcy provides you with a fresh start that enables you to recover from debt and rebuild your financial life and credit. With negotiated debt settlement there is usually no legally binding release provided by creditors. Therefore, it is possible that sometime later a person could be contacted again by a debt collector who may try to collect a debt that a person believed was previously settled. Because of this, it can be difficult to reestablish credit after a negotiated debt settlement.
WHAT ARE THE BENEFITS OF FILING BANKRUPTCY?
Filing bankruptcy can provide you with many benefits. Chief among these are
- Eliminating the legal obligation to repay most or all of your debts
- Stopping creditor harassment and allowing you to regain your peace of mind
- Allowing you to recover you dignity and rebuild your financial life
- Stopping foreclosure on your home or mobile home and allowing you an opportunity to catch up on missed payments
- Stopping repossession of a car, truck or other property, and allowing you to force a creditor to return your property to you if it has already been repossessed
- Stopping wage garnishee or bank account attachment
- Stopping utility service disconnection, or forcing the utility to reconnect your service if it has already been shut off
- Allowing you to obtain your driver’s license if it was taken because of an accident in which you did not have insurance
- Allowing you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more money than you actually really owe.
CAN I BE FIRED FROM MY JOB IF I FILE BANKRUPTCY?
No. The bankruptcy code contains protections for those people who seek bankruptcy relief. These protections also include protection against the denial of future utility service and of various government-granted licenses and permits.
DO THE NEW BANKRUPTCY LAWS PREVENT ME FROM FILING ON SOME TYPES OF DEBTS, SUCH AS CREDIT CARDS OR DOCTOR BILLS?
No. Many people are aware that Congress changed the bankruptcy laws in October, 2005. Unfortunately, there is still a great deal of misinformation circulating about these changes. Many of the changes affected the consumer’s rights in bankruptcy and made filing for bankruptcy more cumbersome and expensive. However, Congress did not abolish bankruptcy or any type of bankruptcy.
WHAT TYPE OF DEBTS CAN BE INCLUDED IN BANKRUPTCY?
A person filing bankruptcy is required to disclose every debt he or she owes. Most debts can be eliminated in bankruptcy, but there are exceptions to this rule. Not every debt can be eliminated in each type of bankruptcy. In general it is possible to eliminate more types of debts under Chapter 13 bankruptcy than under Chapter 7 bankruptcy.
Examples of the types of debts that are commonly eliminated in bankruptcy include credit cards, signature loans, medical bills, utility bills, old income tax debts, and deficiencies owed due to the loss or repossession of property. Examples of the types of debts which may be difficult to eliminate or unable to be eliminated in bankruptcy include support obligations, recently-owed income taxes, student loans, debts owed as a result of fraud and criminal wrongdoing, and damages owed due to injuring someone while intoxicated by drugs or alcohol.
WHAT PROPERTY CAN I KEEP IF I FILE FOR BANKRUPTCY?
All persons going through bankruptcy have a right to keep some, if not all, of their property. When filing bankruptcy, you have a right under law to claim specific property as exempt, or set aside, free from the claims of your creditors. The ability to claim property as exempt is an important aspect of providing the person going through bankruptcy with a fresh start.
In Ohio, exempt property includes equity in your home, equity in a motor vehicle, household goods, and tools of the trade. Many other types of property are also exempt, such as most retirement plans and many government benefits such as social security and unemployment benefits. Depending on the exemption claimed, however, there may be dollar-amount limits on the amount of equity that can be set aside.
The type of bankruptcy that one chooses to file also affects the amount of property one may keep. It is often possible to keep more property in a Chapter 13 bankruptcy than in Chapter 7 bankruptcy.
HOW DO I KNOW IF I SHOULD FILE FOR BANKRUPTCY?
The decision to file for bankruptcy protection is often difficult. It may be time to consider filing for bankruptcy protection when the benefits that can be obtained in bankruptcy outweigh the effects of continuing under your current circumstance. If you are overwhelmed by debt, you may want to consider filing for bankruptcy protection. Common indications that you may be overwhelmed by debt include
- Losing property, such as vehicle repossession or home foreclosure
- Being sued for the collection of debt(s)
- Losing legal privileges, such as the loss of a driver’s license because of having an accident without insurance coverage
- Being constantly harassed by bill collectors at home or at work
- Paying all of your debts on time but having to charge necessities, or having to borrow to pay for necessities such as groceries, utility bills, or rent
- Having your utilities disconnected
- Having to go to check loan stores to make ends meet
- Having to resort to pawn broker loans to make ends meet
- Having to constantly juggle the bills.
WHEN IS IT TOO LATE TO FILE FOR BANKRUPTCY?
Almost nothing can prevent a person from exercising his or her ability to file for bankruptcy protection. But if you need to file bankruptcy, it is often better to file bankruptcy sooner rather than later. Filing sooner usually will allow you and your lawyer the time needed to better plan your bankruptcy and protect your property or your wages. This can allow you to make better use of the fresh start afforded by bankruptcy protection.
Being sued or having a judgment entered against you does not stop you from exercising your ability to file for bankruptcy. It is not too late to file for bankruptcy if your wages are being garnished, if your bank account is being attached, or if you have been either liened or levied by the IRS.
A creditor cannot make you bargain away your ability to file for bankruptcy in a loan agreement, or as a prerequisite for lending you money or in exchange for goods.
WHAT ARE THE DIFFERENT TYPES OF BANKRUPTCY?
There are four types of bankruptcies but the two most common are Chapter 7 bankruptcy and Chapter 13 bankruptcy.
Chapter 7 bankruptcy is the most commonly filed. In Chapter 7, an individual is asking the court to grant him or her a discharge of his or her debts today. In this type of bankruptcy the court will appoint a trustee whose job it is to liquidate all property that is not exempt (or is in excess of what he or she may keep under law), and use the money raised to pay creditors. Generally, those who file Chapter 7 keep all of their property except property which is very valuable or which is subject to a lien that they cannot get rid of under law or cannot afford to pay. Chapter 7 is sometimes referred to as income protection, because by giving up any non-exempt property today, you are protecting your future earnings from your creditors.
The next most commonly-filed bankruptcy is Chapter 13. This is a type of “reorganization” used by individuals to keep their property. Under Chapter 13, an individual repays at least a small portion of his or her debt over a period of time, usually between three to five years. Chapter 13 often allows an individual to reduce the amount of debt he or she must pay back to creditors and to reduce the monthly payment that is required to repay the debt. Chapter 13 can also be used to cure defaults, so that such debts as home mortgage arrearages and car lease arrearages can be made “current.” Chapter 13 can also be used to reduce the monthly payment required to pay off liens on property, such as vehicle loans. Some debts which cannot be discharged in Chapter 7 bankruptcy can be discharged in Chapter 13. Also some people who have property in excess of what they might be able to keep in Chapter 7 bankruptcy choose Chapter 13 in order to retain their property. Some people refer to Chapter 13 as asset protection, because by giving up some of your future income you are keeping the assets you have today.
The next type of bankruptcy is Chapter 11, which is also known as a reorganization. This type of bankruptcy is used mostly by businesses and a few individuals whose debts are vey large.
Finally, there is Chapter 12 bankruptcy. This type of bankruptcy is reserved for fishermen and family farmers.
WHICH TYPE OF BANKRUPTCY SHOULD I FILE?
The type of bankruptcy an individual should file is an important legal decision, one that should be made in consultation with an experienced bankruptcy attorney.
In order to make the right decision, the type of debt you owe as well as the amount of debt you owe must be considered, along with household earnings, assets owned, and the relief that each type of bankruptcy provides.
WHAT WILL HAPPEN TO MY CREDIT IF I FILE BANKRUPTCY?
Often a great deal of harm has already been done to an individual’s credit even before he or she makes the decision to file bankruptcy.
While it is true that bankruptcy will not “add points” to your credit score, bankruptcy provides a discharge releasing you from debts you may never be able to pay. By being discharged from debts you might never be able to pay, you can then begin rebuilding a good credit score. This is because you will no longer have the unpaid accounts, debts in active collection, and unsatisfied judgments that make it impossible to obtain good credit.
It is true that the fact that a person filed bankruptcy can stay on his or her credit report for ten years, but that does not mean you have to wait ten years before you can obtain credit again. Many times a person can recover financially and rebuild credit much sooner. A secured credit card can almost always be obtained immediately after a bankruptcy is completed. Often times the lenders who issue secured credit cards will turn the same credit cards into unsecured accounts in as little as 18 months after the credit card is issued. Many persons who have filed bankruptcy have obtained an FHA- guaranteed home mortgage and purchased a home in as little as two years after they filed bankruptcy. Many persons who have filed bankruptcy have obtained loans for automobiles in even less time.
Sometimes a person may enter into a negotiated debt settlement plan under the belief that it will less injurious to their credit than bankruptcy would be. But because a negotiated debt settlement plan does not provide a discharge of indebtedness, it could actually be more difficult to obtain credit after attempting or completing a negotiated debt settlement plan.
WILL MY BANKRUPTCY HURT OTHER PEOPLE?
When a person files for bankruptcy protection, he or she does so individually. Bankruptcy does not make a spouse or other person(s) responsible for paying your debts. The only other person who is responsible for paying your debts is the co-signer on an account. The co-signer is responsible to repay the account if you don’t, because he or she already agreed to repay the account by co-signing with you. Bankruptcy does not make a co-signer on an account any more responsible to pay the account than the co-signer already is. Many times a person who files for bankruptcy will continue to repay the co-signed account, thus protecting the co-signer from any harm.
IF I AM MARRIED, MUST MY SPOUSE FILE WITH ME?
Many married couples file bankruptcy together; however, if you are married, your spouse is not required to file bankruptcy with you. You do not need your spouse’s permission to file bankruptcy individually.
HOW MUCH DOES IT COST TO FILE BANKRUPTCY?
The attorney fee for filing a bankruptcy will depend on what type of bankruptcy you file (i.e., Chapter 7 or 13) and the amount of work required in any particular case. Because each case is unique, the cost of bankruptcy depends on the complexity of the case.
In general, the attorney fee for a typical simple consumer Chapter 7 bankruptcy may be between $900.00 and $1200.00. The cost for a Chapter 13 bankruptcy can be more, but typically most of the cost is deferred and is included as part of the plan of reorganization. The typical Chapter 13 bankruptcy can usually be filed for as little as $800.00.
HOW DO I GET STARTED FILING FOR BANKRUPTCY?
The simplest way to get started is to contact our office and make an appointment to meet with an attorney to discuss your financial situation. Please bring the following information with you to the appointment:
- Proof of current income
- A copy of your most recent federal tax return filed
- Your most recent statement from each creditor, or a list of your debts, or a credit report
- Any papers from a court you recently received
- Any current divorce or child support orders.
You can also obtain additional information about bankruptcy by clicking on the GET STARTED section of our website and submitting additional information for our review. Submitting additional information for our review may allow us to provide you with a more detailed response to your questions, but does not substitute as legal advice. Do not send either personal or confidential information to us over the Internet.
Please be aware that submitting additional information to us via GET STARTED does not create an attorney-client relationship and does not substitute for a face-to-face meeting with an attorney. The information we receive will be considered in preparation for the actual meeting at which the attorney-client relationship can be established.
We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.Marshall D. Cohen Co. LLC is a legal professional association organized in the state of Ohio, U.S.A. The attorneys employed by Marshall D. Cohen Co., LLC, are licensed to practice law in the state of Ohio, only. The information contained in this site is for the use of residents of the state of Ohio, only. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your telephone calls, letters, and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until an attorney-client relationship has been established. Marshall D. Cohen Co., LLC, its member attorney, and attorney employees have not entered into an attorney-client relationship with you until such time as a face-to-face meeting takes place and a written agreement for attorney representation is executed.
