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YOUR CREDIT WILL BE RUINED, AND YOU'LL NEVER OWN ANYTHING AGAIN.

Chances are that if you are reading this your credit score is already shot or is about to be shot – and it's just a matter of time.

Most of our clients report receiving credit cards applications in the mail – often before their case is over! The interest rate on these cards will be high - at least at first – so don’t use them. I definitely don’t want you to fall back in debt.

YOU'LL NEVER BE ABLE TO BUY A HOME IF YOU FILE BANKRUPTCY.

You should be able to obtain a new mortgage or refinance an existing mortgage at competitive rates through a special program underwritten by the Fair Housing Authority ( FHA) one year after you file Chapter 13 and two years after you file Chapter 7. This program, created by the Federal government, is based not on your credit score but on factors such as your income and payment history after your bankruptcy.



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    FILING BANKRUPTCY MEANS YOU ARE SOMEHOW "IMMORAL".

    Most people file bankruptcy due to circumstances beyond their control. Often, the debtor or someone in the debtor’s household loses a job. Other debtors file because they lose a spouse’s income through death or divorce. Others file because of sky high interest rates on credit cards or mortgage loans. Overwhelming medical expenses, business failure, bad luck or simply poor money management skills often drive people to seek the protection of the bankruptcy courts.

    Most people file only as a last resort and have already borrowed from friends and mortgaged their property, but still can’t pay all their debts on time. Congress has provided bankruptcy as a safety valve to protect honest people who find themselves in circumstances beyond their control.



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IF I FILE BANKRUPTCY, WILL I LOSE MY HOUSE, CAR, AND EVERYTHING I OWN?

The Chapter 13 trustee has no authority to take property from you and sell it. You may, however, be thinking about Chapter 7.

Only about one person in twenty loses an asset to the Chapter 7 trustee. The reason the overwhelming majority of Chapter 7 debtors are able to keep all their property is because certain state and federal laws (called “exemptions”) place certain property “off-limits” to a Chapter 7 trustee. In other words, exemption laws protect most of your assets from the reach of the trustee.

Your attorney will know how to assert your exemption rights to protect your equity in many assets. For example, in South Carolina, the homestead exemption was recently increased to protect a $50,000 of equity in your home. If you and your spouse own the home together, you get $100,000 of protection. You heard that right, if you and your spouse own the home together, the trustee can’t touch your home except to the extent that you have more than $100,000 of equity. Please note that the result can be different if you recently moved to South Carolina, or if you don’t properly claim the exemption, or if you live outside South Carolina.



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    Similar exemptions protect equity in your car, your retirement accounts, household items, tools of the trade and other asset types. Part of an attorney’s job is to advise you about which assets (if any) may be at risk and, if appropriate, take steps to protect those assets before you file.

    What asset is most commonly forfeited to a Chapter 7 trustee? Probably, tax refunds owed to the debtor before the case was filed. The trustees are generally not interested in ordinary household items such as furniture, lawn mowers or guns – unless of course these items are of serious value to collectors. Generally speaking, the belongings of most debtors are either of insufficient value to interest the trustee or they are protected by exemption laws.

    Will the trustee poke around your house looking for assets to sell? No … that almost never happens.

    If you have assets that for some reason are not sufficiently protected by exemption laws you may want to consider filing under Chapter 13. In Chapter 13, you’ll repay a portion of the debts through a court supervised repayment plan. No one loses assets in Chapter 13, so long as they can make the necessary payments to the lien holder. And, even if you are behind on your car payment or house payment you will generally be allowed to keep the property if you can pay for it.

    Exemption rules are tricky. We perform an exemption analysis (and lien search) during the first appointment to identify if any property is at risk.



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If you’re drowning under financial obligations, we may be able to help you. At The Law Offices of Sidney Wike, LLC, we will explain your rights, outline your options, and work closely with you throughout the bankruptcy or restructuring process. We know that you’re under a great deal of stress right now, but we’ll work hard to make this time easier on you.

We have 18 years of experience in the field, and we don't charge for the initial consultation. We’ll handle all aspects of your bankruptcy from the initial petition and negotiations with creditors to filing the final paperwork. Our goal is to help you regain control of your finances and enjoy a fresh start.

Our top concern is for your satisfaction and protecting your rights. Separate fact from fiction by exploring some of the common Myths About Bankruptcy below.

MYTH 1: BANKRUPTCY RELIEF IS NO LONGER AVAILABLE.

On the contrary… bankruptcy is still very much available and affordable to the average debtor. In fact, you can accomplish just about anything under the new law that you could under the old law. In some ways, the new law actually makes it easier to file for bankruptcy – we’ll tell you how.

Many people that would have qualified for bankruptcy under the old law think – incorrectly - they would not qualify for bankruptcy today. Studies have proven, however, that that overwhelming majority of people who actually filed under the old system would meet today’s eligibility requirements as well.

The main differences are that the new law:

Imposes additional paperwork requirements
Puts additional measures in place to prevent dishonest debtors from “abusing the bankruptcy system”; and,
Provides incentives for people to file under Chapter 13 - rather that Chapter 7, if they have a meaningful amount of income left over each month after their reasonable and necessary living expenses.



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    MYTH 2: ITS REALLY HARD TO FILE BANKRUPTCY.

    Actually, filing Bankruptcy is a lot like the going to the dentist: in most cases, the worst part is worrying about it before it starts.

    While the decision to file bankruptcy may be difficult, the actual filing of the bankruptcy is not difficult … at least not in the hands of an experienced bankruptcy attorney. In the hands of an experienced bankruptcy attorney, the actual filing is relatively simple.

    The main difficulty is usually getting all of the paperwork together. If you think that bankruptcy may be right for you, organize your affairs by gathering-up all paycheck stubs for the past six months and your most recent credit card statements, tax returns, medical bills etc.

    If I think that bankruptcy is not right for you, I’ll tell you … and I’ll tell you why. In a typical week, I’ll advise several persons not to file bankruptcy because – for them – the risks outweigh the benefits. At that point, we discuss alternative strategies for managing debt. Any reputable attorney would so the same.

    You shouldn’t keep living with a painful toothache just because you are afraid to go to the dentist. Nor should you continue to struggle pathetically with debt (if that’s what your doing) because your afraid to review your options with an experienced bankruptcy attorney. To schedule a free, relaxing debt consultation, call us today.

    MYTH 3: IF I FILE BANKRUPTCY, I'LL LOOSE MY HOUSE, CAR, AND EVERYTHING I OWN.

    The Chapter 13 trustee has no authority to take property from you and sell it. You may, however, be thinking about Chapter 7.

    Only about one person in twenty looses an asset to the Chapter 7 trustee. The reason the overwhelming majority of Chapter 7 debtors are able to keep all their property is because certain state and federal laws (called “exemptions”) place certain property “off-limits” to a Chapter 7 trustee. In other words, exemption laws protect most of your assets from the reach of the trustee.

    Your attorney will know how to assert your exemption rights to protect your equity in many assets. For example, in South Carolina, the homestead exemption was recently increased to protect a $50,000 of equity in your home. If you and your spouse own the home together, you get $100,000 of protection. You heard that right, if you and your spouse own the home together, the trustee can’t touch your home except to the extent that you have more than $100,000 of equity. Please note that the result can be different if you recently moved to South Carolina, or if you don’t properly claim the exemption, or if you live outside South Carolina.

    Similar exemptions protect equity in your car, your retirement accounts, household items, tools of the trade and other asset types. Part of an attorney’s job is to advise you about which assets (if any) may be at risk and, if appropriate, take steps to protect those assets before you file.

    What asset is most commonly forfeited to a Chapter 7 trustee? Probably, tax refunds owed to the debtor before the case was filed. The trustees are generally not interested in ordinary household items such as furniture, lawn mowers or guns – unless of course these items are of serious value to collectors. Generally speaking, the belongings of most debtors are either of insufficient value to interest the trustee or they are protected by exemption laws.

    Will the trustee poke around your house looking for assets to sell? No … that almost never happens.

    If you have assets that for some reason are not sufficiently protected by exemption laws you may want to consider filing under Chapter 13. In Chapter 13, you’ll repay a portion of the debts through a court supervised repayment plan. No one looses assets in Chapter 13, so long as they can make the necessary payments to the lien holder. And, even if you are behind on your car payment or house payment you will generally be allowed to keep the property if you can pay for it.

    Exemption rules are tricky. We perform an exemption analysis (and lien search) during the first appointment to identify if any property is at risk.



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Many seniors pride themselves on living within their means and are too embarrassed to discuss their situations with loved ones. When their fixed income no longer keeps pace with inflation, many max out their credit cards paying for doctor visits, prescription drugs and groceries. They struggle month after month to make minimum payments and suddenly find themselves facing aggressive debt collectors, lawsuits and judgments against their property. Tragically, many deplete their retirement savings before filing for bankruptcy.

Signs that an elderly parent may be trying to hide financial problems:

• Cutting back on necessities like medications, doctor visits or groceries.
• Letting the mail pile up
• Reluctance to talk about finances

In sum, seniors are often disproportionately affected dur¬ing times of financial turmoil, and are unaccustomed to dealing with aggressive debt collectors.



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    At its core, bankruptcy is designed to give the debtor peace of mind by immediately stopping all collection efforts, includ¬ing harassing phone calls, lawsuits and threatening collection letters. In addition to peace of mind, bankruptcy is designed to provide a fresh start by eliminating credit card debt, medi¬cal debts and in many cases, tax debts and judgment liens.

    Most seniors considering bankruptcy have two options: Chapter 7 and Chapter 13.

    Chapter 7 Bankruptcy

    Chapter 7 bankruptcy typically discharges the unsecured debts and certain secured debts as well. The person filing of¬fers to turn over to the trustee any nonexempt assets, which the trustee can sell to repay creditors. Fortunately, most peo¬ple who file bankruptcy in South Carolina under Chapter 7 are able to keep their homes, keep their cars, and keep all their property.

    Chapter 13 Bankruptcy

    In Chapter 13 bankruptcy, debtors make monthly payments to a Chapter 13 trustee who distributes the money to creditors. Car loans, tax debts, credit card debt, medical debts – even mortgage arrearages – all go into the Chapter 13 Plan. In South Carolina, the interest rate on unsecured debt goes to zero, and the interest rate on car loans drops to 5.25%.

    Recent studies show that Americans over 65 years old are one of the fastest growing segments of bankruptcy filers. A number of factors have been cited as driving this trend, in¬cluding mounting medical debts, the high costs of groceries and utilities, and helping adult children with living expenses. A significant number of seniors are also choosing bankruptcy as an estate planning tool so they can pass their assets to their children free from creditor claims.

    In addition, the stigma once associated with filing for bankruptcy appears to be considerably less as the benefits of filing for bankruptcy become more widely known among seniors.

    Bankruptcy is not for everybody

    Although the great majority of bankruptcy filers are able to keep their assets and emerge from bankruptcy unburdened by debt, bankruptcy can be a serious mistake if the person filing bankruptcy owns exotic cars, takes extravagant vaca¬tions or has fraudulently transferred assets to family members. Those who are unwilling to truthfully disclose their financial affairs or want to hide income or assets from the trustee should never file bankruptcy.

    Exemptions

    Exemptions are laws that protect your assets from being taken by the bankruptcy trustee. Subject to several important restrictions and conditions, the South Carolina exemptions are as follows:

    Primary Residence................$58,225 of equity ($116,450 if co-owned) is protected
    Car.........................................$5,825 of equity ($11,650 is co-owned) is protected
    Household Items...................$4,625 of equity ($9,250 if co-owned)
    Cash / money in bank...........$5,825 per person (as long as not exempting your house)

    Pride and embarrassment cause many seniors to wait too long before taking action. All options - including non-bankruptcy options - should be explored with an experienced bankruptcy attorney before any missteps are taken.



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If you’re drowning under financial obligations, we may be able to help you. At The Law Offices of Sidney Wike, LLC, we will explain your rights, outline your options, and work closely with you throughout the bankruptcy or restructuring process. We know that you’re under a great deal of stress right now, but we’ll work hard to make this time easier on you.

We have 18 years of experience in the field, and we don't charge for the initial consultation. We’ll handle all aspects of your bankruptcy from the initial petition and negotiations with creditors to filing the final paperwork. Our goal is to help you regain control of your finances and enjoy a fresh start.

Our top concern is for your satisfaction and protecting your rights. Separate fact from fiction by exploring some of the common Myths About Bankruptcy below.

Let Sidney Wike clear up any misunderstandings you may have concerning bankruptcy and other legal matters. Below are just a handful of some of the Traps and Pitfalls people commonly fall into.



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    Improperly Paying Creditors Prior to Filing Bankruptcy

    Answer is: The bankruptcy system is designed to ensure the full disclosure of what are called “preferential payments”. Preferential payments are payments to any one creditor exceeding $600 in the 90 days before you filed bankruptcy. For relatives and business partners, the look- back period is longer.

    The concept of the “preferential payment” is that a person “on the eve” of bankruptcy should no longer be free to chose which of their creditors to repay. Otherwise, people would pay their family and business partners to the detriment of the other creditors that didn’t get paid.

    To “right the wrong”, the Code authorizes the Chapter 7 trustee to demand that the creditor cough-up the money and put it back on the table to be distributed fairly among all the creditors.

    Many people – often those who are not represented by experienced bankruptcy attorneys, fall into a trap by failing to disclose a preferential payment or understand its different consequences in Chapter 7 and in Chapter 13. Part of your attorney’s job is to keep you out of trouble by identifying preferential payments and understanding how the Chapter 7 trustee and Chapter 13 trustee might react.

    Improperly Transferring Assets Prior to Filing Bankruptcy

    You must disclose any asset that you have sold, given away, or otherwise transferred prior to the filing of the bankruptcy. Transfers to family members and business partners receive the closest scrutiny.

    Selling assets to friends or family members before you file bankruptcy is generally allowed so long as you receive fair value in exchange. But simply “putting an asset in someone else’s name” while you go through bankruptcy is considered a fraud, and trustees have ways of discovering such things. An experienced bankruptcy attorney will counsel you against fraudulent transfers and will have experience to predict how the various trustees are likely to respond to the situation.

    Failing to Disclose an Asset

    Many people think that they don’t need to disclose all their assets – especially those that they received as gifts or assets that are titled in someone else’s name. Intentionally failing to disclose an asset is bankruptcy fraud. It could easily disqualify you from receiving a discharge and could result in criminal prosecution. All assets must be listed.

    Fortunately, however, most assets are protected by exemption laws that allow you to keep the assets provided that you properly assert the exemption. Exemptions are why only about one person in twenty has to forfeit an asset to a trustee. Part of you’re your attorney’s job is to navigate you through the legal complexities and identify assets of interest to the trustee and take steps to protect them.

    Failure to Disclose a Debt

    Some people believe that they can simply keep any credit cards not listed in the bankruptcy. They figure they will just keep on paying it. This, however, is incorrect. All debts must be listed. You are free to repay any debt after the bankruptcy, but intentional failure to list a debt is illegal. Pull your own credit report and bring it to your appointment – this will not necessarily contain all your debts but it’s a great start.

    Running-up a credit card shortly before you file.

    Anytime you borrow money with no intention or ability to repay it’s considered a fraud. This means that once you have decided to file bankruptcy, stop using the credit cards. Cash advances and luxury purchases within 70 days prior to filing bankruptcy send up red flags and create a legal presumption of fraud. For this reason, we often recommend delaying the bankruptcy filing until after the 70 day period expires. The timing of the bankruptcy is often quite important.



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You may have heard stories of someone who lost their car or house in a Chapter 7 bankruptcy. Usually what happened is that the creditor got the house or car back because the person filing chapter 7 was not able to make the payments.

Occasionally, however, the chapter 7 trustee can take certain property. This happens relatively infrequently in South Carolina - perhaps one case in twenty. Usually the asset is a tax refund or mutual fund not hold in a 401(k) or IRA account.

Most people who file bankruptcy in South Carolina are able to keep their homes and cars (and other property) so long as they can continue to make the payments. The reason it is relatively rare for a chapter 7 trustee to take someone’s property in South Carolina is that South Carolina has laws, known as “exemption laws”, that protect a person’s property from the reach of the chapter 7 trustee.

Prior to 2007 and 2008, the exemption laws in South Carolina were woefully inadequate and left little or no protection for many assets. Now, however, the South Carolina exemption laws allow persons to keep much more of their property while going through chapter 7 bankruptcy.

A few quick examples should make things clear...



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    Assume John and Mary are married and file a chapter 7 case together. Their house is worth $200,000, the deed is in both names, and the mortgage payoff is $100,000. Even though they have $100,000 of equity in the house, the trustee cannot take it from them so long as they live in the house and have lived in South Carolina for the last two years. South Carolina’s new homestead exemption protects $107,000 of the home equity ($53,350 each person). If they can continue paying the mortgage they can keep the house. Before the law changed only $20,000 of the home equity was protected.

    Let’s assume that John owns a truck free and clear with a trade in value of $5,000. Mary drives a $20,000 car and owes the car finance company $15,000. In other words, each person has $5,000 of equity in their car. John and Mary can keep both vehicles in a chapter 7 because South Carolina’s new exemption laws protect just over $5,000 in automobiles equity. Mary will have to continue to pay the car note, of course, but the trustee can’t touch either car. Before the law changed only $$1,200 of car equity was protected.

    Similar exemptions exist for household goods (up to $10,000 in value based on flea market value), tools of the trade, retirement accounts (fully exempt), and most every other class of asset.

    Suppose, however, that the same couple also owns a boat worth $10,000 and a piece of investment real estate also worth $10,000. Both the boat and the land are titled in both names are free and clear of liens. Until recently, boats, investment property and many other types of property were completely unprotected by any South Carolina exemption and therefore could be taken by a chapter 7 trustee. In 2008, the South Carolina state legislature created a “wildcard exemption” that can be applied to protect up to $10,700 ($5,350 each person) in any asset you chose. In the example above, the John and Mary could keep the boat and offer the investment property to the chapter 7 trustee who would sell it unless he deemed selling it more trouble than it is worth. Alternatively, they could apply the wildcard exemption to protect the land and offer the boat to the chapter 7 trustee.

    One final word… Exemption laws and the rules for qualifying for chapter 7 versus chapter 13 are complicated and have been simplified for our purpose here. The exemption laws will not apply to you if you have not lived in South Carolina for the last two years. All decisions should be taken after consultation with an experienced bankruptcy attorney.



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The number of seniors who petition for bankruptcy protection from their creditors has increased steadily in recent years. A combination of mounting debt and dwindling resources has forced many seniors to use loans and credit cards to pay for prescriptions, medical co-pays, and basic necessities. The financial stress they are under can become overwhelming. While a young person has the opportunity to rebuild themselves financially, many seniors do not. For them, the relief provided by the bankruptcy law can be dramatic.

The financial decline of seniors often goes unnoticed, even by their loved ones. In an effort to satisfy creditors, many will forego medication, cancel insurance policies and invade retirement accounts. Unfortunately, embarrassment leads many to postpone filing bankruptcy because they think that everyone will find out. Although bankruptcy is a matter of public record and is reflected on the credit report, chances are the only people who will know about the bankruptcy are the creditors and others with whom you have shared information.

The two types of bankruptcy available for most individuals are Chapter 7 and Chapter 13...



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    Under both chapters 7 and 13, the judge immediately issues a restraining order that halts all collection activities, including lawsuits, phone calls, collection letters, wage garnishments, repossessions and foreclosures. Most people who file under Chapter 7 are able to keep their cars and keep their homes so long as they can continue to make the payments. In the typical case, the judge signs an order that wipes-out credit card debts, medical debts, personal loans, payday loans and debts to finance companies. In many cases, old tax debts are also discharged under chapter 7. Debts not discharged through Chapter 7 include child support, alimony, student loans and recent tax debts.

    Chapter 13 is a repayment plan in which the person filing makes a monthly payment to a bankruptcy trustee who distributes the money back to the creditors. It is available to someone who earns too much money Chapter 7 and also for homeowners who want to keep their home but are facing foreclosure.

    Filing bankruptcy, however, is not for everyone. Just because someone is in financial distress and unable to pay their bills does not necessarily mean they should file for bankruptcy. A creditor has little leverage over a person who has little income and owns no real estate. Creditors cannot have you arrested and taken to jail for not paying a debt, nor can creditors garnish social security checks. Most seniors living in assisted-living communities would fall under this category and the financial benefit of bankruptcy may be marginal for such individuals.

    In sum, while fixed incomes that fail to keep pace with inflation have been driving up the number of seniors who file bankruptcy, it is not for everyone. Those with few assets that can stomach the phone calls and collection efforts may see little benefit in filing. On the other hand, the bankruptcy can still be a worthwhile experience if it brings peace of mind and restores a feeling of control over one’s life. Contact us today to get started down the road to peace of mind and a fresh start!



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At its core, bankruptcy is designed to give the debtor peace of mind by immediately stopping all collection efforts, including harassing phone calls, lawsuits and threatening collection letters.

In addition to peace of mind, bankruptcy is designed to provide a fresh start by eliminating credit card debt, medical debts and in many cases, tax debts and judgments; liens that creditors often place on your property.

Most people considering bankruptcy have two options: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy typically discharges the unsecured debts and certain secured debts as well. The person filing offers to turn over to the trustee any nonexempt assets, which the trustee can sell to repay creditors. Fortunately, most people who file bankruptcy in South Carolina are able to keep their homes, keep their cars, and keep all their property.

Chapter 13 Bankruptcy

In Chapter 13 bankruptcy, debtors make monthly payments to a Chapter 13 trustee who distributes the money to creditors. Car loans, tax debts, credit card debt, medical debts – even mortgage arrearages – all go into the Chapter 13 Plan. In South Carolina, the interest rate on unsecured debt goes to zero, and the interest rate on car loans drops to 5.25%.



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    Bankruptcy is not for everybody

    Although the great majority of people filing bankruptcy are able to keep their assets and emerge from bankruptcy unburdened by debt, bankruptcy can be a serious mistake if the person filing bankruptcy owns exotic cars, takes extravagant vacations or has fraudulently transferred assets to family members. Those who are unwilling to truthfully disclose their financial affairs or want to hide income or assets from the trustee should never file bankruptcy.

    Exemptions

    Exemptions are laws that protect your assets from being taken by the Ch. 7 trustee. Subject to several important exceptions and conditions, the South Carolina exemptions are as follows:

    Primary Residence $59,125 of equity is protected. $118,250 if residence is co-owned.
    Car $5,900 of equity is protected. $11,800 if car is co-owned.
    Household Items $4,725 of equity is protected. $9,450 if items are co-owned.
    Cash / Money in Bank $5,900 per person is protected, so long as not exempting your house. $11,800 if the money is co-owned.
    401(k) and IRA and other
    qualified retirement accounts
    100% protected.
    Pride and embarrassment cause many people to wait too long before taking action. All options - including non-bankruptcy options - should be explored with an experienced bankruptcy attorney before any missteps are taken. That’s precisely the approach we take at the Law Office of Sidney Wike. We will explain your rights, outline your options, and work closely with you throughout the bankruptcy process.

    Contact us today to get started down the road to peace of mind and a fresh start!



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