Normally, filing for a mortgage forbearance is a reasonably straightforward process. You would have simply contacted your lender and provided any necessary documentation for them to determine your eligibility for reduced or paused payments until you got back on your feet. With the CARES Act, asking for forbearance was made even more simple due to the fact that most individuals were universally suffering from pandemic-related hardships. However, the situation was a bit more complicated for those already in bankruptcy or considering it.

What is the CARES Act?

After the pandemic hit and it was evident that Americans were struggling to make ends meet, the government took action and enacted the CARES Act. The Coronavirus Aid, Relief, and Economic Security (CARES) Act (2020) was created to provide relief and assistance for workers, families, small businesses, and other industries. Through this act, a number of programs were implemented to directly address specific issues related to the onset of the pandemic. One such program was the COVID hardship forbearance program.

How Does the CARES Act Affect My Ability to Seek a Mortgage Forbearance?

The COVID hardship forbearance program is available to most individuals suffering financial hardship. However, there are some stipulations. To be eligible, you must:

• be experiencing financial hardship directly or indirectly related to the COVID-19 pandemic
• have a federally backed HUD/FHA, VA, USDA, Fannie Mae, or Freddie Mac loan

*If your mortgage is not federally backed, you would need to check with your service provider as they may offer other similar options.

Outside of Bankruptcy:

For those not dealing with bankruptcy, the CARES Act allows those affected by the pandemic to ask for forbearance to suspend payments on their federally-backed mortgage loan for up to six months. In some situations, borrowers may be able to extend the forbearance for an additional six months.

Due to the CARES Act, lenders must allow this forbearance if borrowers meet the two conditions listed above. This act ensures that extra interest and fees will not accrue during the forbearance, and the borrower’s credit rating will not be affected.

While in Bankruptcy:

For borrowers in a Chapter 13 bankruptcy or considering filing for bankruptcy, the situation can vary depending on the jurisdiction. However, when the CARES Act was passed, new language was added to the bankruptcy code that may allow those in mortgage forbearance to still file for bankruptcy.

While the bankruptcy code does not have any clear guidelines for this particular situation, considerations may be made based on your local district’s bankruptcy court regulations. Generally, when changes are made to a Chapter 13 repayment plan, such as a mortgage forbearance, all parties must be notified. This includes all creditors, the Debtor’s attorney, the servicer, and the Chapter 13 trustee.

How to Provide a Temporary Mortgage Forbearance Notice While in Chapter 13 Bankruptcy

Currently, there are no set rules for how to give notice of forbearance for those affected by the pandemic while already in or considering bankruptcy. However, the National Association of Chapter 13 Trustees recently provided a few basic options for how mortgage lenders can go about the process:

1. File a general notice with the bankruptcy court on the docket indicating the terms of the forbearance.
2. File a general notice on the claims register outlining the terms of the forbearance.
3. Send a physical letter to the Chapter 13 trustee, the bankruptcy filer, and all other interested parties indicating the forbearance terms.
4. File a notice of payment change on the bankruptcy court claims register outlining the forbearance terms.

Of the options above, there is no right or wrong choice. Each option will come with its own set of advantages and disadvantages depending on your locality. Services should utilize whichever option works best for them and the local bankruptcy district.

How Sawin & Shea LLC Can Help

At Sawin & Shea LLC, we understand how devastating the pandemic has been, especially for those who were previously struggling and considering bankruptcy. Our team has years of experience helping those suffering from unmanageable debt. We believe in providing compassionate and understanding representation to all of our clients. Our attorneys have experience in bankruptcy cases and are here to help you through the process every step of the way. Contact us for a free debt relief consultation.

The post The CARES Act, Consumer Bankruptcy, and Mortgage Servicing appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

The average student loan borrower is close to $40,000 in debt, with the country as a whole having an accumulated student loan debt of $1.73 trillion. While to some, that might seem like a reasonable amount to owe back, the issue comes when we look at the cost of living, and the wages graduates are paid in comparison.

Years ago, the cost of attending university was only around 16% of the average household income, making it a manageable amount of debt to pay off. Today, however, student loans are nearly 35% of the median household income. And unfortunately, graduates are often not paid enough to afford both their loan payments and the ever-increasing cost of living, resulting in today’s overwhelming student loan debt crisis.

Luckily, there is a potential light on the horizon for those suffering under the heavy burden of student debt. This year, a new bipartisan bill was introduced that would allow borrowers to discharge student loans through bankruptcy.

What is the New Bipartisan Bankruptcy Reform Bill?

The new bill, called the “FRESH START Through Bankruptcy Act of 2021”, was introduced in August by the chair of the Senate Judiciary Committee and Senator John Cornyn (R-TX). The main point of the bill states that those struggling with federal student loans would now be able to have the loans discharged through bankruptcy. However, the discharge is not immediate. According to the Bill proposed in the Senate, the loans will only become eligible ten years after the first loan payment was or is due. There is still a long way to go before this Bill is passed into law, but we are hopeful that it will happen.

If the Bill passes, even with the ten-year waiting period, this is a major plus for those with federal student loans. Unfortunately, the bill only applies to federal loans, and private student loans are still a significant issue for millions of Americans. Private student loans will retain the same undue hardship option for discharge that is already available.

Discharging Student Loans Through Bankruptcy

Previously, student loans were only eligible for discharge if you could prove that paying back the loan was causing undue hardship. Of course, “undue hardship” is somewhat abstract as hardship for one individual can be different than the hardships for another. Nevertheless, that was the previous requirement for having your loans discharged. And as you can imagine, proving to a judge that you are experiencing such hardship is quite the challenge.

With this new reform bill, proving undue hardship is not required to have your federal loans discharged. Those with private student loans, however, will still have to prove that it is hopeless that they will ever repay if they wish to have the loan discharged. Often, in these cases, it is highly beneficial to work with a bankruptcy attorney. They have extensive experience working with individuals suffering from student loan debt and can guide you through the process of convincing the court of your hardship.

Who Qualifies Now for Student Loan Forgiveness?

As far as we know, under the new reform bill, anyone with federal student loans is eligible to have them discharged after the ten-year period from when the first payment was/is due. However, President Biden has enacted some form of student loan cancellation since taking office to begin the process of relieving the burden of the $1.73 trillion student loan debt.

There are two constituencies for being eligible for the current federal student loan cancellation that Biden is enacting:

1. Total and permanent disability: Borrowers must have a permanent disability that prevents them from earning an income.
2.  Borrower defense to repayment: Allows borrowers to cancel their student loans if they were misled or defrauded by the college they attended.

How Sawin & Shea LLC Can Help

At Sawin & Shea LLC, we understand the debilitating burden of trying to manage student loan debt, as well as how scary it can be to consider filing for bankruptcy. Our team has years of experience helping those suffering from unmanageable debt. We believe in providing compassionate and understanding representation to all of our clients. Our attorneys specialize in bankruptcy cases and are here to help you through the process every step of the way.

Contact us at 317-759-1483 or send us an email for a free consultation today!

The post Bankruptcy Reform Bill and Student Loans appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Bankruptcy isn’t rare in the Hoosier state; Indiana has the 7th highest percentage of bankruptcies in the United States, based on population: 22,748 in 2019, or 3.38 per every 1,000 people.

If you file for Chapter 13 Bankruptcy in Indiana, you will still be obliged to pay something toward your debts; it’s just that you will be given a payment plan that reduces your unsecured debts based upon your ability to pay, that puts you on a manageable schedule, and that holds your creditors at bay while you work on making achievable payments.

Taking that into account, we’ll focus on Chapter 7 Bankruptcy.

Some debts are definitely dischargeable:

• Medical bills: This is a lifesaver because ⅔ of the people who file for bankruptcy cite medical issues as the main reason. That’s 530,000 families per year in the United States.
• Credit card debts: Although credit card debt dropped in 2020 (possibly because of Covid and the fact that people were staying at home), the average household credit card debt is $5,315. Although credit card debts and late fees can be discharged during bankruptcy, that doesn’t mean that you can rack up new debts after you file.
• If you use a credit card to buy more than $725.00 of luxury goods (that is anything not actually considered to be a necessity) within 90 days of filing for bankruptcy or if you used the credit card to pay for non-dischargeable debts (like child support), this debt may not be discharged if the creditor files an adversary proceeding to have the court declare the debt non-dischargeable.
• Cash advances (on your credit card) that total more than $1,000.00 within 70 days of filing for bankruptcy.
• Overdue utility bills: These will be discharged and furthermore, utility companies will not be able to shut off your service after you have filed for bankruptcy. Make sure that you list this debt with your other obligations when you file. You will have to prove that you can pay future bills in order to keep the utilities; there are complicated rules attached to this, so an experienced bankruptcy attorney will be a huge asset.
• Civil court judgments (not counting anything that was based on fraud).
• Rent that is past due: This doesn’t mean that you can’t be evicted. It simply means that any rent that is owed from before you filed bankruptcy will be discharged.
• Personal loans: Although your family or friends who helped you out will not be thrilled to hear this, these are discharged.
• “Payday” type loans
• Collection agency bills
• Dishonored checks (unless they were based on fraud)

Some debts are definitely not dischargeable:

• Child support: This is considered to be a priority debt and will not be discharged. The positive here is that if your other debts are discharged, you may be likely to have enough money to pay this required debt.
• Alimony payments: if the domestic support obligation (DSO) owed to a former spouse is for maintenance, it will not be discharged.
• Debts arising from willful and reckless acts, embezzlement, fraud, or larceny
• HOA fees: if you surrender your house, your homeowners’ association fees will be discharged up until the time you filed for bankruptcy. If you keep your house, these debts will not be discharged, and you will have to pay them.
• Most back taxes: Tax debt assessed within 240 days before you file your bankruptcy case is not discharged. If the tax debt is at least three years old, it may qualify for a discharge. This includes both back taxes owed to the Internal Revenue Service (IRS) and to the Indiana Department of Revenue. But the debts must be at least three years old at the point you file for bankruptcy.
• Court fines, including restitution ordered in a criminal matter
• Any debts you did not list when you filed for bankruptcy unless the creditor learns of your bankruptcy case. (These are called unscheduled debts.)
• Student loans. There are some exceptions to this. To discharge a loan taken for an educational purpose, you’ll need to file a certain kind of lawsuit known as an adversary proceeding or adversary suit. This is a way of proving that it is an undue hardship for you to continue paying on your loan and it will be impossible to pay it back in the future. This is a complex lawsuit that can be expensive, so seek legal guidance from a bankruptcy attorney before taking this path.

Filing for bankruptcy can be a chance for an almost clean slate, but not a perfectly clean slate. Consult an experienced bankruptcy attorney to make sure that it is the right choice for you, and if so, to help you navigate the myriad Indiana bankruptcy laws.

At Sawin & Shea, we understand that hiring an attorney to help you file bankruptcy is scary. We are committed to providing compassionate and non-judgmental representation to all of our clients. Our attorneys have helped thousands of people just like you get the fresh start they deserve. We are here to help.

Speak to an attorney today at (317) 759-1483 or contact us online.

The post Debts That Can’t Be Discharged During Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Debt counseling (also called credit counseling) is required before you can declare bankruptcy. There is a pre-filing counseling and pre-discharge counseling.

What is pre-filing counseling?

Before you can file for Chapter 7 or Chapter 13 bankruptcy, you need to do pre-filing counseling. Your bankruptcy attorney can recommend approved agencies that can handle the session and provide the needed certification.

This one-hour course is taught by a nonprofit credit counseling agency and teaches you about the process of declaring bankruptcy — the advantages and disadvantages. It also talks about using repayment plans instead of declaring bankruptcy. The class will teach you about:

• Using debt management tools
• Making informal repayment plans with creditors
• Learning personal budgeting education

What is pre-discharge counseling?

Pre-discharge counseling is your last step in finalizing your bankruptcy. This two-hour course (also called “the second course”) is required before you receive your bankruptcy discharge (the court order that forgives your qualifying debt).

The basic premise for this course is to give you the tools to stay out of debt and manage your finances effectively in the future. Some of the topics that are covered in this class include:

• Understanding your credit score and using credit carefully
• Creating and managing a personal budget
• Learning how to save money/cut expenses

After completing both the pre-filing counseling and pre-discharge counseling, you will receive a certificate that you need to submit to the court to finalize your bankruptcy. Most agencies provide these to your attorney directly.

How do I start the counseling process?

Both types of counseling are available through a nonprofit credit counseling agency that is approved by the Department of Justice. You want to make sure you use an agency approved by the court jurisdiction where your case is filed.

Almost all counseling sessions are over the phone or online, making it easy to have access to an approved agency. Make sure to have your financial information ready when you go for counseling — pull together a basic list of your expenses, debts, and income.

Do I have to pay for it?

You will need to pay for the counseling. The average cost is $15 to $50 per course. Some agencies charge less for online sessions, and many of them will waive fees if you meet criteria specified by the Office of the United States Trustee.

Sawin & Shea – Indianapolis Bankruptcy Attorneys

These two counseling sessions are just two steps in getting out of debt and finding a better financial future. The Indiana bankruptcy attorneys at Sawin & Shea LLC can help you walk through the nuances of the bankruptcy process and advise you on life after bankruptcy.  We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.

The post Do You Have to Get Debt Counseling Before Bankruptcy? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Car repossession is one of the many reasons people contact the Indiana bankruptcy attorneys here at Sawin & Shea. Losing your car can completely disrupt your life and work, so you may wonder what you can possibly do to prevent it.

Here’s some good news: You don’t have to just give up and allow your car to be repossessed. You may still have the option of keeping your car through bankruptcy. Let’s look at what you can do to prevent losing your car.

Bankruptcy Offers a Way to Keep Your Vehicle

Chapter 13 bankruptcy, also known as a reorganization bankruptcy, stops a car repossession in its tracks using something known as the automatic stay. It halts collection efforts and gives you the opportunity to reorganize your debts, including vehicle payments, preventing the loan company from taking your car.

During your Chapter 13 bankruptcy, unsecured creditors are forced to take payments in only the amount the law says you can afford or have to pay. You stay under the court’s protection, which continues to stop collection efforts until the end of your bankruptcy.

If the car loan company keeps contacting you or repossesses your car during your bankruptcy plan, they could be breaking the law. At Sawin & Shea, we help our clients put the law to work for them by holding creditors responsible for bankruptcy law violations and creditor harassment.

With the help of a bankruptcy attorney, you can pursue options like demanding compensation for harassment, modifying the terms of your car loan, reducing your interest rate, and perhaps paying only what the vehicle is worth without all the penalty payments piled on top. These benefits come as a huge relief for people who are deeply in debt.

Recent Supreme Court Decision Means Timing Matters

Until recently, there was still a bit of wiggle room with the timing of getting a repossessed car back immediately. It meant you could have your car repossessed, file for Chapter 13 bankruptcy, and have your car back in your possession fairly quickly.

However, a recent Supreme Court decision means it’s now very important to file your bankruptcy case prior to your car being repossessed. It’s more difficult now, but still possible, to get your car back if it is repossessed before you file a Chapter 13 bankruptcy.

While it’s still possible to regain possession of a repossessed car, now it will require a court hearing and a bankruptcy judge’s ruling. During that time, you may be without a car. In this situation, there’s not much you or your lawyer can do about it until the bankruptcy court grinds along in their process.

Filing for Bankruptcy ASAP

As you can see, it’s more important than ever to contact a bankruptcy attorney immediately if you’re getting behind on car payments. Don’t let a car repossession happen without talking to an attorney first. The earlier you contact us, the more time and options you have.

We can potentially help you file your bankruptcy case prior to repossession and prevent losing your car for even a moment. Talk to Sawin & Shea today for a free consultation that will get the process moving as quickly as possible.

Sawin & Shea—Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of overwhelming debt and advise you on life after bankruptcy. We are here for you during this life-changing process.

Please do not hesitate to call us today at (317) 759-1483 or send an email for a free consultation. We are ready to help.

The post Car Payments and Car Repossession appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Now many of these moratoriums are approaching expiration and you’re probably wondering what happens next. Will you lose your home? If you’re behind on your payments, here are some options to explore.

Ask Your Landlord About Extensions and Exceptions

Some renters are lucky enough to have an easygoing landlord who’s willing to work with them to avoid eviction. A number of Indianapolis-area property management companies are giving extensions and making exceptions to encourage their renters to stay put, despite the impact of the pandemic.

But not everyone is so lucky. Some landlords are tougher than others. Even if your landlord is willing to make some kind of deal with you, there may still be a huge balance due on your account that must be settled somehow.

Ask your landlord exactly how much you owe and how you might be able to clear out your old, overdue balance. They may be willing to work with you, or they may dig in their heels and prepare to evict you. Either way, you stil have some options.

Here’s What to Do if You Are Facing Eviction

It’s time to start planning now to prepare for the road ahead. If your landlord insists on keeping a large overdue amount on your account, a bankruptcy can help you clear that balance and stop them from pestering you for old rent payments.

Bankruptcy may allow you to finally get your landlord off your back and stay in your rental, at least temporarily. It may be possible in some cases to reorganize the rent arrears. That is because landlords have to follow bankruptcy laws, just like everyone else, and they may have no option but to take a payment from a bankruptcy reorganization plan.

In some cases, eviction is inevitable – or even welcome, if you dislike your rental! You may need to accept the eviction and move, with a bankruptcy discharge helping you secure a new rental home or apartment. Chapter 7 bankruptcy is a way to erase old rental debt and start fresh.

What to Do if You Are Using the CARES Act

If you’re a homeowner/homebuyer using a Coronavirus Aid, Relief, and Economic Security (CARES) Act forbearance, you’re probably facing a large future mortgage payment that will be difficult to make. Now’s a good time to contact your mortgage company to talk about modification.

Modification is a way to adjust the terms of your mortgage, permanently or temporarily, to allow you to get caught up. If your mortgage company will not work with you on modification terms you can afford, a bankruptcy lawyer may be able to help you use Chapter 13  bankruptcy to save your house and free yourself from worrying about those overdue mortgage payments.

Chapter 13 bankruptcy can force a creditor like your mortgage company to accept a reorganization plan. This means you have the opportunity to spread out your overdue balances over a period of up to five years.

These are just a few of the bankruptcy strategies you can use to stay financially stable during and after the COVID-19 pandemic. Call us today for a free consultation. We are here to help you find the right solution for your situation.

Sawin & Shea—Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of overwhelming debt and advise you on life after bankruptcy. We are here for you during this life-changing process.

Please do not hesitate to call us today at (317) 759-1483 or send an email for a free consultation. We are ready to help.

Video Transcript:
Hello, my name is Andrew Sawin. I’m one of the attorneys at Sawin & Shea.
 I wanted to talk to you a little bit today about COVID, the pandemic, and mortgage and eviction moratoriums that are in place right now. If you are in an apartment, or a rental house, and you have fallen behind on your rent, right now, landlords are stayed from being able to pursue an eviction, but that’s going to end at some point in the near future.
It’s time to start planning, now, to deal with that situation. If you don’t think your landlord’s going to make some kind of a deal to help you get caught up on your rent, a bankruptcy can help you clean out the old rent arrearages, and move forward. Now, you’d have to do that with a new rental space, but it would pave the way for you to be able to move on, get a new apartment, get a new rental house, and find a new place to live with a fresh start.
If you’re in a house that you’re buying, and you are under a CARES Act forbearance, and you don’t know how you’re going to get that caught up, now is the time to start thinking about modification with your mortgage company. If the mortgage company doesn’t allow you to modify the loan to get caught up, we can use a chapter 13 bankruptcy to help you save the house and get caught up. We can force the creditor to accept a reorganization plan, where you can pay that arrearages back over a period of up to five years. So, we do have options in bankruptcy. Call us today for a free consultation. We’d be happy to talk to you about your current situation. Thank you very much.

The post COVID-19, Evictions, and Mortgage Moratoriums appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Chapter 7 bankruptcies are liquidation bankruptcies, meaning non-exempt assets can be liquidated to pay your creditors back something. One of the most common assets that bankruptcy trustees seize is your tax refund. Many people don’t realize this is going to happen until it’s already too late.

At Sawin & Shea, we want you to know about a few bankruptcy strategies you can use to keep as much of your tax refund as possible through the bankruptcy process. We can help you maximize the benefits of your tax refund money.

The Timing Matters for Your Bankruptcy Tax Strategy

First, we would encourage you to think about the timing of your bankruptcy as it relates to filing your taxes. It is important to handle things as efficiently as possible.

If you can wait to file for bankruptcy until you actually receive and spend your tax refund reasonably, that is the best-case scenario. This means you gain the benefits of your tax refund money while keeping it out of reach of the bankruptcy trustee. It is a completely legal and effective option.

Your bankruptcy attorney can help you handle this process and ensure you time things correctly. You can even wait until you receive your tax refund and then use it to pay your attorney’s fees and court costs associated with filing for bankruptcy.

This means you maximize the benefits of your refund while using it wisely to get rid of a lot of other debt. When all is said and done, you’ve used your tax money to fund your bankruptcy and you have as much of a clean slate as possible in your situation.

Talk to Your Lawyer About Your Expenditures

Make sure you have an honest conversation with your bankruptcy attorney about your household expenditures and the purchases you’ll need to make during and after the bankruptcy period. If you’re desperately trying to get caught up on rent, need to buy school clothes for your kids, or have been putting off a car repair, mention it.

Your attorney can help you factor in these costs as you plan your bankruptcy. If you have balances of funds left over after you pay attorney fees and court fees, you can plan to spend that tax refund money on the essential things your family needs.

Garnishments, Credits, and Exemptions Impact Your Strategy

Perhaps you can’t wait to file for bankruptcy because you have a repossession pending or a garnishment that’s about to hit your paycheck. Again, make sure you tell your bankruptcy attorney about these critical factors.

We can talk to you about your tax refund and how a repossession or garnishment could impact it. We will also help you look for ways to hang on to a portion of your tax refund rather than watch it all go toward your old debts. You may qualify for certain exemptions and credits that protect your money.

For example, if you must file your bankruptcy before you receive your tax refund and you receive the earned income credit, you’d be able to keep that portion of your tax refund. Some of the tax refund would be used by the trustee to help pay your creditors, but not necessarily all of it. This leaves you in a better financial position.

As you can see, a little legal knowledge goes a long way when it comes to bankruptcy and tax issues. Do not let your tax refund dollars go down the drain before contacting an experienced bankruptcy attorney.

Call us today for a free consultation. We would be happy to go through all of these strategies and help you plan to get the biggest bang for your refund buck.

Sawin & Shea—Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of overwhelming debt and advise you on life after bankruptcy. We are here for you during this life-changing process.

Please do not hesitate to call us today at (317) 759-1483 or send an email for a free consultation. We are ready to help.

Video Transcript:
Hello, my name is Andrew Sawin. I’m one of the attorneys at Sawin and Shea. I want to talk to you a little bit today about tax refunds. This time of year, we start really thinking about tax refunds and how bankruptcy affects them, and what we can do to help you utilize your tax refund in the most efficient manner. Chapter seven bankruptcies are liquidation bankruptcies, and one of the most common assets that chapter seven bankruptcy trustees seize and use for the benefit of your creditors are tax refunds.
We want you to know about a few strategies you can use to maximize the benefit of your tax refund money. If you can wait to file a bankruptcy until you actually receive and spend your tax refund reasonably, that is the best case scenario. If we can wait and use your tax refund to pay attorney fees and court costs associated with filing a bankruptcy, you maximize the benefit of that refund by using it to get rid of a lot of other debt.
If you have balances of funds left over after you pay attorney fees and court fees, you can spend those reasonably on things you need, like getting caught up on rent and buying clothes for your kids, car repairs, things along those lines. We need to talk to you about those things in that kind of planning though. If you can’t wait to file a bankruptcy, if you have a repossession pending, or a garnishment going on, we can talk to you about your tax refund and what to expect with it. If you have to file a bankruptcy before you receive your tax refund, and you receive earned income credit, you’d be able to hang on to that portion of your tax refund, but some of the tax refund would be used by the trustee in order to help pay your creditors back something, but it’s best to go into a bankruptcy knowing these things.
Call us today for a free consultation. We’d be happy to go through all these things and help you plan to get the biggest bang for your refund buck. Thank you.

The post Bankruptcy and Tax Refund Strategies appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

If you’re dealing with debt and considering filing for bankruptcy, it’s a good idea to get professional legal advice on how to handle the proceedings. There are countless scams and “credit repair” cons trying to take advantage of your situation when you need help the most.

Credit counseling and debt management agencies may be able to assist you as you work, but with so many untrustworthy schemes out there, how do you know what the right step should be?

Should I File for Bankruptcy?

If you are deciding whether or not to file for bankruptcy, there are a lot of conditions to consider. Every person’s situation is different, and it’s a wise idea to talk with a qualified bankruptcy attorney about your options. Bankruptcy may affect your credit score (it sometimes can make your score better!), but it can also help give you a fresh start.

Whether or not you file for bankruptcy also depends on the kind of debt you have. Bankruptcy will wipe out credit card debt, medical bills, and personal loans, but will not eliminate primary obligation debt; things like student loans, child and spousal support, and newer tax debt.

Bankruptcy can also stop or delay a home or mortgage foreclosure, stop collection actions, stop garnishments and lawsuits.

What Do the Various Kinds of Bankruptcy Entail?

There are many intricacies that set Chapter 7 and Chapter 13 Bankruptcy apart. What does each one mean?

Chapter 7 Bankruptcy: A petition is filed in the Bankruptcy Court seeking a discharge of most types of debts. In exchange of this discharge non-exempt assets are liquidated by a Chapter 7 trustee in order to pay creditors back something. Most Chapter 7 cases are what we call no-asset cases, which means that there are no assets for the trustee to take or sell.

Chapter 13 Bankruptcy: Chapter 13 bankruptcy is a reorganization of debts for debtors with regular income. There are limitations as to the amount of debt you can have, and it is limited to individuals and sole proprietors. You get to keep your property but pay back a portion of your debts. A Chapter 13 can help people get caught up on a mortgage or car loans. It can help if a person is not eligible for a Chapter 7 for whatever reason.

How Does Debt Negotiation Work?

Debt negotiation means your creditor has agreed to accept less than the full amount of your debt as payment– it also means debt collectors can’t harass you for your payments.

What do you need to keep in mind though? Debt settlement with the wrong organization or a scam can destroy your credit. It can be costly with lots of overhead fees and can take years to reach a settlement. Consult with a bankruptcy lawyer about what your debt negotiation options are.

How Can I Stop Collector Harassment?

Debt collection agencies can be thoroughly unpleasant. Oftentimes, they only compound the financial stress you are feeling. While debt collectors can be persistent, the Fair Debt Collection Practices Act (FDCPA) was in place to stop collector harassment, and it’s good to stay educated about what debt collectors can and can’t do.

Also, it’s important to note that you should write the debt collector and ask them to stop contacting you. According to the FDCPA, they have to comply with your request. Stay educated about what debt collectors can and can’t do and state your rights if they step over the line.

What Are the Warning Signs of a Credit Repair Scam?

Millions of Americans file for bankruptcy each year, and there are plenty of unscrupulous agencies who are looking to take advantage of people who are looking for help with their financial situation. How do you avoid falling victim to a scam? What are the warning signs?

• The company wants you to pay a fee to repair your credit before they do so
• The company does not tell you your legal rights or tell you about free options you can take on your own
• They try to get you to create a new credit score by applying for an employee identification number instead of your social security number
• They tell you to dispute all information in your credit report or create a new identity

Sawin & Shea: Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of the overwhelming debt and advise you on life after bankruptcy.  We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.

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The post Need to Know About Debt Negotiation and Settlement? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

How Can I Wipe Out My Tax Debt?

Whether or not you can wipe out or put off tax debt collection will depend on which bankruptcy plan you choose, what type of tax you owe, how old your tax debt is and whether you filed a tax return timely. In bankruptcy you can discharge federal income taxes only if:

• You filed tax returns for at least two years before filing for bankruptcy and they were timely.
• The tax was not assessed due to audit.
• The tax debt is at least three years old.
• You meet the 240-day rule, which means the IRS assessed the debt at least 240 days before you filed for bankruptcy.
• You did not commit a crime like tax evasion, fraud, or identity deception.
• The debt is for income taxes only. Other types of taxes don’t necessarily qualify for discharge.

Can I Eliminate Payroll Taxes or Tax Penalties?

Unlike federal income taxes, payroll taxes cannot be wiped out in Chapter 7 bankruptcy. Tax penalties are eligible to be discharged when the taxes that they are based upon are dischargeable. In certain other circumstances, penalties associated with non-dischargeable taxes may also be discharged. You may be able to eliminate tax penalties on previously unpaid income tax but not payroll tax. Tax penalties for fraud are never eligible for discharge by bankruptcy because they involve a crime.

What If I Have a Tax Lien?

If the IRS has already placed a tax lien on your property prior to the point of filing for bankruptcy, then the situation gets more complicated. A bankruptcy can discharge personal liability on a debt, but the tax lien will remain attached to anything you own, and you will still owe taxes related to it, even after your case is discharged. This is a good reason to act urgently and contact a bankruptcy attorney before things go too far.

If I Need to Wipe Out Tax Debt, What Should I Do Next?

Eliminating tax debt is possible but it is one of the most difficult things you can attempt in bankruptcy. It is a tricky process to navigate alone because you will need to deal with the United States Internal Revenue Service, provide many types of proof and documentation and avoid making critical errors that could put your bankruptcy discharge in jeopardy. You will need the advice and guidance of a bankruptcy attorney who can help you pursue eliminating the tax debt you owe. Contact an experienced bankruptcy attorney and ask them about using Chapter 7 bankruptcy to discharge your tax debt.

Sawin & Shea – Indianapolis Bankruptcy Attorneys

Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of the overwhelming debt and advise you on life after bankruptcy.  We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.

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If you have been adversely affected by the pandemic, please visit the State of Indiana website at https://www.indianahousingnow.org and/or the City of Indianapolis website for Marion County residence at https://indyrent.org. At these sites you can seek assistance that can help you stay in your apartment or home.

If these grants are not enough help, and you are having other financial difficulties, Sawin & Shea LLC are available for a free phone or video consultation.

For more information on bankruptcy and evictions please see some additional video and articles here.

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