Bankruptcy

***PUBLIC SERVICE WARNING***

We have recently noticed an increasing number of people coming into our office who were considering signing up with one of the many DEBT REDUCTION COMPANIES that advertise on television or the internet. Some of these debt reduction companies may appear to be a law firm or will have a law firm contact you. These companies try to sell you on the proposition that they will "try" to get your creditors to reduce your credit card balances. Of course there are no guarantees that they will be able to do so. THE ONE THING THAT IS GUARANTEED is that you will have to pay them a substantial fee, usually over many months, before they even begin to "try" to get your balances reduced. Also, you should know that when a credit card company "settles" with you for a reduced balance payment, they usually will send you and the IRS a 1099 form so that the reduction is treated as income to you when you file your taxes. So you are then either paying the taxes on it or fighting with the IRS. And that's assuming that the debt reduction company was even able to get the reduction. Most are nothing but scams. AVOID THEM.

Are you drowning in debt? Are you facing foreclosure on your home? Or facing repossession of a vehicle? Tired of worrying about how you are going to pay your bills? Would a fresh start for your family make all the difference? At Vrsecky Probst and Associates, L.L.P., we provide Chapter 7 bankruptcy and Chapter 13 debt reorganization services. Bankruptcy is a very difficult word to say. You are not alone. Last year over 2 million people filed for personal bankruptcy. Many major corporations and other employers have cut jobs. Americans are hurting. Bankruptcy laws were created to help honest, hardworking people start over when misfortune such as illness and medical bills, divorce, job loss or employment down-sizing occur in their lives and make repaying their debts impossible. When we meet to discuss your bankruptcy needs, we will show you how we can help you solve your financial problems.

Will you lose everything? No! You can protect your property through the use of exemptions. Exemptions protect your net equity in your property. For instance, if you own a vehicle that has a value of $10,000 and you owe the bank $8,000 for your loan, then your net equity would be $2,000 and you would need to protect this through the exemptions set out below.

Should I use my retirement, IRA or 401k to payoff my debts? Retirement plans such as IRA's and 401k's are protected by the bankruptcy exemption for qualified retirement accounts. So, if you are having financial problems which are making you consider filing bankruptcy do not use that protected retirement money to pay on unsecured debts such as credit cards or medical bills. Before you do that call and schedule a free consultation so that your situation can be examined in detail.

How about tapping into my home equity-line to pay off unsecured debt such as credit cards? It is not a good idea to jeopardize your home to take care of credit card debt. Consult a bankruptcy attorney before taking that step. Remember, you can't discharge the mortgage debt secured by your home if you are intending to keep your home, but you can discharge the unsecured credit card debt.

My car or house are underwater. What can I do?When you owe more in secured debt on property such as an automobile or house than the property is worth, and you don't want to keep that property, you have the option to walk away from that secured property in bankruptcy. By surrendering the property, you relieve yourself of all personal obligation for that secured loan in a Chapter 7. This is commonly done when the property is worth considerably less that the loans against it) or is in bad shape etc. This decision can play a large role in determining whether Chapter 7 or Chapter 13 is best for you.

CURRENT EXEMPTIONS
• Homestead Exemption: allows you to protect up to $35,000 (if single) or $70,000 (if married) of equity in your home. By way of example, this means that if you are married and the value your home is not more than $70,000 greater than the total of the mortgages and equity lines you owe on the home, then you can exempt the your interest in your home. If you are at least 65 years old, unmarried and your home was owned by you and your spouse and your spouse is deceased, you are entitled to a $60,000 homestead exemption.
• Vehicle Exemption: $3,500 for one vehicle per person filing.
• Household Exempion: $5,000 per filer plus $1,000 per dependent up to an additional $4,000 for household furnishings, appliances, and other personal property.
• Retirement Account Exemption: Accounts such as IRA's, 401K's and similar ERISA qualified retirement accounts are exempt and protected.
• Wildcard Exemption: If you do not use your homestead exemption, either because you don't own a home or your home's equity doesn't use up all of the available homestead exemption, you are entitled to a Wildcard exemption of up to $5,000 per filer which you can use to protect any other property you may own.

We'll discuss the process for filing for bankruptcy and we'll explain how you can exempt your home, vehicles, and other property which you have used as collateral for a home mortgage or auto loan. Are you upside down on a vehicle loan (where you owe a lot more on the the auto than it is worth)? We'll explain how you can surrender the vehicle to the lender and avoid all personal liability for that vehicle loan. We'll also give you some tips on how to start rebuilding your credit right away. Attorneys Anthony Vrsecky and Robert Probst want to be your family's lawyers in your time of need. We'll never pressure you into making a decision about filing. It's your decision. We'll explain the facts. You decide.

Behind on your mortgage payments and facing foreclosure?

If you have an income though a job or through benefits such as Social Security, Retirement, Disability or even Unemployment Compensation, a Chapter 13 plan may be able to reorganize your mortgage arrearages and other debts so that you can keep your home. Call us and we can analyze your financial situation in a free consultation and tell you whether a Chapter 13 is right for you.

What are some of the differences between Chapter 7 or Chapter 13?

• Chapter 7 takes about 4 months to receive your discharge, while Chapter 13 lasts between 36 and 60 months.
• Chapter 7 is best suited for people who are current on their secured debts such as their home and vehicles (if they intend to keep that property) and whose income does not exceed the state median income. (more about that below)
• Chapter 7 does not require that you have an income stream while Chapter 13 does. (Can be a job, disability or Social Security etc.)
• Chapter 13 is a better option for those who are behind on their mortgages and or vehicle loans or required for those whose income exceeds the the guidleline means test income set out below.
• Both Chapters 7 & 13 require you to take a pre-filing credit counseling course which consists primarily of you listing your income and expenses. After you have filed and before your discharge you are required to take a financial management course or debtor education course (2 hour video). You can take these required courses online at www.hummingbird.org. You do not have to pay for the pre-filing course when you take it and your certificate will be good for 180 days.
• Remember, when you are in financial distress DO NOT take any steps to try and fix it without consulting first with an experienced bankruptcy attorney who can direct you as to the best course to take. Initial consultations are always free so you have everything to gain and nothing to lose by getting that legal advice.

Current State Median Income Guidelines for Chapter 7 Means Testing The Bankruptcy Reform Act of 2005 established state median income guidelines which can affect your ability to file a Chapter 7 bankruptcy. If you exceed the income for your household size, you may not be able to file under Chapter 7 and may have to file under Chapter 13. Contact our office for a free initial consultation regarding any questions you may have regarding your household income. State median incomes for different size households are as follows:

We offer the following consumer bankruptcy and debt relief legal services:

• Analyzing your financial situation to determine the best solution for your financial problems
• Chapter 7 bankruptcy - consumer and credit card debt elimination
• Chapter 13 debt reorganization
• New bankruptcy laws explained
• Represention at the creditor meeting
• Debt counseling referrals
• Analyzing your mortgage, vehicle and household exemptions to allow you to keep as much of your property as possible

Contact the Chapter 7 and Chapter 13 debt relief law firm of of Vrsecky Probst and Associates, L.L.P., to schedule your free consultation to talk with us about bankruptcy.