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Medina Bankruptcy Law Blog

What debts do creditors generally garnish wages for?

If you've had the misfortune of receiving debt collection calls or notices in the mail before, then you've probably been warned that your creditor may file suit against you if you don't pay. What you may not realize is that once a lawsuit gets filed against you, you generally have some time to appeal the judgment. If you don't, then your creditor may be allowed to begin garnishing your wages.

Virtually any creditor can file to have your wages garnished. It's a more common practice among state child support authorities, the Internal Revenue Service (IRS), federal student loan servicers and unsecured consumer debt companies though.

Viral sermon leads to $46.5 million in medical debt forgiveness

Living in Ohio, you may be familiar with a church called Crossroads. Crossroads recently had a sermon called "The Marks of Multiplication" that talked about the burden of medical debt on individuals in the community. He stated that the congregation could, if they wanted to, donate to help free others from medical debt.

That campaign wasn't a challenge, but the group took it to heart. Working together with RIP Medical Debt, which would wipe out $100 per $1 donated, the church was able to eliminate over $46.5 million in medical debt throughout the United States. Around $42 million of those funds were used to help people in Ohio.

Columbus 'Circus House' in foreclosure after owner's bankruptcy

The owner of a well-known Ohio home dubbed the "Circus House" has filed for bankruptcy, and the primary mortgage holder is seeking to foreclose on the home.

Built in 1895 for the owner the Sells Brothers Circus, the home, which overlooks Goodale Park in Columbus, now is vacant. Its distinctive roof is shaped like a circus tent. Noted architect Frank Packard combined Gothic, Chateauesque and Romanesque styles when designing the home.

What are some debt relief scams that consumers should avoid?

One of the primary responsibilities of the Federal Trade Commission (FTC) is to protect U.S. consumers from predatory advertising. This federal office has previously issued public notices warning Americans of credit repair or debt relief service scams. It's in those statements that the FTC has tried to impart some practical advice aimed at helping consumers from falling victim to such predatory practices.

The FTC warns consumers with large outstanding credit card balances to approach debt relief companies carefully. They note that these companies often claim to be able to negotiate a reduction in or settlement to a consumers' obligations to repay their debts. Many of these companies aren't able to do this though.

Are you addicted to shopping?

Just like someone can get addicted to alcohol or gambling, did you know that you can get addicted to shopping? It gives you some of the same sense of gratification, and many people do it in order to cope with stress or emotional issues in their lives.

Now, all buying is not a sign of an addiction, and even a one-day shopping spree may not signify an overarching problem. But addiction is a real issue that many people face. One doctor defined it as buying habits that become:

  • Excessive
  • Inappropriate
  • Out of control

Do you ever see your garnished wages?

If a wage garnishment is put in place against you, and it's never happened before, you likely have a lot of questions about the process -- and the options you have moving forward.

The first thing you should know is that you do not see your garnished wages. It's not up to you to take a portion of your paycheck and send it to the lender. It happens before you even get the check. Your employer deducts the money and sends it in on your behalf.

Chapter 7 bankruptcy: Why are you holding yourself back?

As you learn more about the benefits of Chapter 7 bankruptcy, such as the ability to obtain a fresh start with your finances, you may realize that it's a logical step in your recovery.

However, it's common to hold yourself back when it comes time to take the final step. There are many reasons for this, including the following:

  • Fear that you'll lose everything: While it's possible you could lose some of your assets in Chapter 7 bankruptcy, don't assume that you have to say good-bye to everything. There are exemptions that allow you to keep most or all of your assets.
  • Uncertainties regarding the process: You're scared that you won't make the right decisions. You're scared of all the paperwork. Uncertainty is enough to slow anyone down, but it's part of the process. Once you get started, you'll realize that the process, with the help of the trustee and an attorney, is efficient and straightforward. All you have to do is follow along.
  • Inability to get a loan in the future: For example, if you're the type of person who one day wants to own a home, you may have concerns about a Chapter 7 bankruptcy filing making it a challenge to secure a mortgage. While it will definitely impact your credit history and score, the right approach allows you to recover sooner rather than later. With Chapter 7 bankruptcy, the average recovery period is two to three years. At that point, you'll feel better about your ability to buy a home.
  • Fear of losing your retirement: You work all your life so you can enjoy yourself in retirement. So, it's natural to worry about losing retirement assets as a result of Chapter 7 bankruptcy. In Ohio, all ERISA qualified retirement accounts are exempt. In other words, they remain unchanged as a result of bankruptcy. The money is still yours.

What is a strategic foreclosure?

Have you ever heard someone talk about a "strategic foreclosure?" Maybe they're going through a rough time financially and trying to figure out what to do.

Essentially, this is just another term for "walking away" from the mortgage debt they already have. It means choosing to stop making payments and just letting the bank take the house.

Is there a way to spot a debt relief scam?

Insurmountable debt is a huge problem for many Ohio residents. Unfortunately, a large number of unscrupulous individuals are poised to take advantage of those looking to get a handle on their debt. Debt relief scams victimize uncountable state residents each year, leaving them even more devastated than they already were.

Fortunately, you can learn to spot the signs of a debt relief or consolidation scam. Armed with just a little knowledge, you can avoid victimization and carry on with your efforts to pay down your debt. Common signs of a scam include the following.

  • Upfront fees: No reputable debt relief company will ask you to pay associated fees upfront. If you make contact with any person or company that asks for fees before they have helped you, it is likely a scam.
  • Guarantees: There are no guarantees when it comes to eliminating or even reducing debt. Any agency or individual who guarantees that they can get rid of your debt within a certain amount of time is not telling you the truth.
  • Nondisclosure: An honorable and honest debt relief agency is eager to share information with you about its services and its track record. If an agency will not disclose this information openly and at no cost to you, then you are probably dealing with a scam.

When will that Chapter 7 filing leave your credit report?

You know that a Chapter 7 bankruptcy filing goes on your credit report. You can't avoid that. Of course, missing payments for months or even years on end also goes on your report, so this isn't to say that adding the Chapter 7 filing is necessarily a bad thing. But it does have a negative impact on your credit score at first.

It doesn't last forever, though. How long will it stay?

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