Practice Areas and Legal Definitions

Every year, more than 1,000,000 Americans file for protection under federal bankruptcy laws. Although some bankruptcy claimants are deemed credit abusers and/or considered financially irresponsible, many hardworking individuals and businesses can succumb to financial difficulty and face irreparable economic crisis. Bankruptcy is designed as a legal option to help resolve such a crisis and to act as a financial life preserver for those drowning in debt. To discuss your bankruptcy options, or other areas of recourse that might be available to you, contact a qualified bankruptcy attorney who can advise you of your legal rights provided by the Bankruptcy Code and federal bankruptcy courts.

New Bankruptcy Laws:
Bankruptcy is a federal court process designed to help individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as liquidation or reorganization. Under a liquidation bankruptcy (Chapter 7), a claimant files to eliminate debt through the bankruptcy court. Under a reorganization bankruptcy (Chapter 11 or Chapter 13), a claimant files a plan with the bankruptcy court proposing how to repay creditors.

As of October 17, 2005, the requirements under which a debtor may file Chapter 7 bankruptcy changed with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act. Debtors are now required to seek budget and credit counseling within six months prior to filing their bankruptcy case, financial “testing” is required to determine the debtor’s capacity for debt repayment, Chapter 7 cannot be filed if the household income is greater than the median household income of the state the debtor lives in, and state exemptions cannot be applied unless the debtor has resided at his current residence for over two years.

Due to the requirements for Chapter 7 bankruptcy under the new laws some debtors who formerly would have been eligible to file under Chapter 7 will now have to file under Chapter 13. Chapter 13 provides for a court-approved plan which requires some or all debts be repaid over a three to five year period, with an appointed trustee assigned to monitor the repayment process. Bankruptcy filings will continue to be recorded on an individual’s credit report for seven years in the case of Chapter 13 and up to ten years for Chapter 7.

Chapter 7:
Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases and may be filed by an individual, corporation, or a partnership. A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in Chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor's nonexempt assets (if any) and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages/trust deeds which pledge the property to a secured creditor. In addition, the Bankruptcy Code will allow the debtor to keep certain "exempt" property, which is often all the debtor’s property, but the trustee will liquidate the debtor's remaining assets. Accordingly, potential debtors should realize that the filing of a petition under Chapter 7 may result in the loss of property.

Chapter 13:
A Chapter 13 bankruptcy is also called a wage earner's plan and it enables individuals with income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over a three to five year period. Chapter 13 permits individuals to keep their property by repaying creditors out of their future income. It is not available to corporations or partnerships. After completion of payments under the plan Chapter 13 debtors are generally relieved from repaying any remaining debts, with a few exceptions.

Foreclosure:
Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property, usually due to the owner's failure to make loan payments under a promissory note secured by a mortgage or trust deed. When the process is complete, it is typically said that "the lender has foreclosed its mortgage or trust deed".

A foreclosure by sale includes the posting of a sign and recording (with the County Recorder) of a notice of sale advertising the auction of your home on the sale date. Two common ways to stop a foreclosure are full payment of the arrearage or the filing of a Chapter 13 bankruptcy. Full Payment: If you are able to obtain and tender the full amount of your arrearage, including fees and costs, you can stop the foreclosure of a standard residential mortgage. Most people lack the money to make full payment. Filing Chapter 13: This process stops the foreclosure and allows you to repay your arrearage over a three-to-five year period. The arrearage is paid through your Chapter 13 Plan while you resume your regular monthly payments to the bank in order to keep your home. A Chapter 13 can be filed at any time prior to the foreclosure sale date and it is often the best avenue to save your home.

Debt Consolidation:
Contrary to popular belief, debt consolidation is not a loan. Debt consolidation is a process in which debt is restructured into one low monthly payment. It further enables a consumer to reduce the amount owed and thereby eliminate interest. Very often a consumer can detect warning signs of being in too much debt long before any collection notices are received. If more than two of the following signs apply to you, you are probably in too much debt:

• You have begun charging to your credit card essential expenses like food and daily expenditures
• You are making only the minimum payments on your credit cards each month
• You are near the limit of your credit cards
• You have too many credit cards
• You are unsure how much money you owe creditors

Bankruptcy Fraud:
Bankruptcy fraud is a business crime of filing for bankruptcy with criminal intent, such as filing with the intention of evading payment for goods even though the buyer has non-exempt funds that could be used to pay for them, or accepting payment for goods or services but not supplying them. Common types of bankruptcy fraud include concealment of assets and fraudulent conveyance of property. Multiple bankruptcy filings are not per se fraudulent - as with all things in the law, it depends on the circumstances.

If you or someone you know in Ohio needs the assistance of an experienced Dayton Bankruptcy Law Attorney, call Scott A. Kramer today at 866-776-4710, or complete the contact form provided on this site to schedule your free consultation.

Professional Profile

• San Francisco State University, 1986
• University of Dayton School of Law, 1999

• Ohio
• United States District Court for the Southern District of Ohio

• Ohio State Bar Association
• National Association of Consumer Bankruptcy Attorneys