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Dayton Bankruptcy Law Blog

Important tax tips for bankruptcy filers

Filing for bankruptcy is one method many people across Ohio use to help themselves regain their financial footing, but there are certain behaviors and lifestyle changes you will need to make after doing so. In addition to watching your spending and making sure to stay on top of all your bills, you will also need to consider how filing for bankruptcy will affect you, come tax time. At Kennel Zeigler LLC, we have a firm understanding of how filing for bankruptcy can impact your taxes, and we have helped many clients navigate their way through this and similar matters.

According to H&R Block, one of the first things you should do after filing for bankruptcy, but before filing your taxes, is change your name. In order for your tax return to undergo processing, the name on it has to match the name the U.S. Social Security Administration has on file for you. If the names do not match, you can anticipate unnecessary delays in processing your tax return.

What steps can you take to reduce the chances of foreclosure?

As an Ohio homeowner, you may take tremendous pride in your home, as it is likely the place you raise children, make memories and otherwise spend your free time. If, like so many others, however, you are struggling to keep up with your mortgage payments, you may have very valid concerns about whether you may lose the place you and your family call home. While, ultimately, whether you will lose your house in a foreclosure will depend on a number of different factors, there are several steps you can take ahead of time to reduce the chances of this happening.

According to This Old House, one of the most important things to do when you have concerns about foreclosure is to avoid waiting around until your situation becomes dire. Once you become upside-down on your home, your options become limited, so your best bet when facing the threat of foreclosure is to act quickly. With this is mind, one thing you can do as soon as you start struggling with mortgage payments is contact your mortgage lender and discuss whether you have any options.

Avoid certain credit cards following bankruptcy

Bankruptcy has a significant effect on one’s credit score, as well as their ability to apply for credit cards, home loans and other important financial support. Once a creditor spots a bankruptcy on an applicant’s record, they may be alerted to the fact that he or she has trouble meeting their financial obligations. There are ways that debtors can rebuild their credit following a bankruptcy, including applying for subprime credit cards. These types of credit cards are designed for people who struggle with bankruptcy, as they will approve those who have a bankruptcy on their record. Experts warn people who apply for these credit cards that high interest rates and fees could lead to more financial trouble.

Subprime credit card lenders approve people with poor credit, below 600, and attempt to help them rebuild their credit score by giving them a chance to charge and repay their balance. As a way to minimize their risk, however, subprime specialist issuers must charge high interest rates, processing fees, annual fees, maintenance fees and authorized user fees. This can put the applicant in danger of becoming indebted once again. CBS News reported that paying off a subprime credit card takes on average, 70 percent longer than paying off a traditional credit card because of all of these added fees and charges. In addition, the agreements can be difficult to read and understand.

Will you lose your house if you file for bankruptcy?

If you count yourself among the many across Ohio who are struggling to remain afloat financially, you may be weighing your options and trying to determine the best way to start getting back on your feet. You may, too, be considering whether filing for bankruptcy might help you find the relief you seek, but you may have concerns about whether you could potentially lose your home, should you decide to do so.

According to the Washington Post, your ability to keep your home after filing for bankruptcy depends on certain circumstances, among them the type of bankruptcy filing you choose to pursue. In a Chapter 7 personal bankruptcy, for example, which is typically for lower-income earners, whether you will have to give up your home depends on whether it meets the criteria for an “exemption.” If the amount of equity you have in your home is lower than Ohio’s exemption amount, you are typically in good shape and should be able to avoid losing your home.

5 common causes of credit card debt

Your credit card can be a helpful tool if you use it correctly and responsibly. Unfortunately, it is easy to rack up credit card debt. 

The causes of credit card debt vary widely and are often unique to each person. However, there are some noteworthy trends. Here are some situations, habits and factors that contribute to financial ruin.

Bankruptcy: Filing for Chapter 13

Bankruptcy - the word all by itself sounds intimidating. Most folks who find themselves in a place of bankruptcy did not have that laid out in their life's blueprint. But, it happens. It happens for Ohio residents who have always paid their bills and suddenly get circumstances dumped in their laps, completely out of their control; it also happens for those who have always had difficulty staying on top of their debts.

Either way it comes, though, bankruptcy can intimidate even the savviest financiers. How is someone to choose which type of bankruptcy to file and how the process should start?

What you need to know about discharging recent credit card debt

At Kennel Zeigler, LLC, in Ohio, we understand that overwhelming credit card debt can get you in a lot of trouble. The card balances increase faster than you can pay them down, and the monthly interest charges eat you alive. You may have heard that you can get your credit card debt discharged in a Chapter 7 bankruptcy, and this is true enough. However, if you have begun thinking about bankruptcy as your only way out, you would do well to stop using your credit cards now. Why? Because the Bankruptcy Court may not discharge your recent credit card debt.

As reported by Bloomberg News, the Bankruptcy Code Section 523(a)(2)(C)(I) includes a presumption against the discharge of the debts you incur from a creditor within 90 days of the date on which you file bankruptcy if those debts represent your purchase of consumer goods amounting to $675 or more.

How to respond when foreclosure is looming

No one in Ohio set out to buy a house with hopes of falling behind on mortgage payments and eventually going into foreclosure. That just does not happen.

Instead, young couples and other homeowners sign up for a mortgage dreaming of the day they will pay it all off and officially own the home they love. Sometimes, though, the dream falls apart. A major medical diagnosis coupled with a crippling layoff can even catch financially stable families off guard. 

Dispelling common bankruptcy myths

If you are an Ohio resident who is finding it hard to stay on top of your finances, know that you are not alone. Many people across the state and nation are struggling under the pressure of mounting medical and other debt, and if you count yourself among them, you may be wondering whether filing for bankruptcy can help you find the relief you seek. At Kennel Zeigler LLC, we have a comprehensive understanding of the bankruptcy process, and we have helped many clients better understand it and make educated decisions about whether they may want to proceed.

Bankruptcy is complicated and commonly misunderstood, and Nerdwallet reports that there is also a lot of misinformation circulating out there about the process and what it all means. Recognizing common misconceptions about bankruptcy may help you cut through the noise and make an informed decision about whether filing might be the right step for you. So, what are some of today’s commonly heard bankruptcy myths?

What to know about debt settlement programs and scams

Not being able to keep up with your bills can prove overwhelming, and especially if things have gotten to the point where you fear you are going to lose your car or your home. Many Americans are currently struggling in the face of mounting debt, but unfortunately, some for-profit companies prey on their fears and pressure them into debt settlement arrangements that often do more harm than good.

When you enter into an arrangement with a debt settlement company, you typically must transfer that company an agreed-upon amount of money on a monthly basis. In turn, that company is supposed to negotiate with your creditors and work out an arrangement that allows you to pay back only a portion of your debts. While this may sound good on the surface, there is considerable risk involved when working with a debt settlement agency, and here is why.

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