Insurmountable debt is a stressful life event to handle.  Thankfully, the Federal bankruptcy laws provide an outlet to escape this pressure when other avenues have failed.  Making the decision to begin the bankruptcy process can be an even scarier prospect.  If you have committed to solving your financial problems by filing for bankruptcy it will be useful to know how to be prepared for your first visit with a local bankruptcy attorney.

You will find other helpful blogs on Bankruptcy Basics if you visit our bankruptcy practice page at https://finneylawfirm.com/practice-areas/bankruptcy/.

Consultation

A consultation with a bankruptcy practitioner will be the first step in preparing for your bankruptcy case.  Each attorney will have their own methods for conducting this meeting and the extent to which you will be required to provide documentation ahead of time.  At Finney Law Firm the initial contact is typically a 30 minute free consultation, either in person or by phone, where basic information will be gathered by the attorney regarding income, expenses, unsecured debts and secured debts, and assets.  A basic understanding of these ___ is all that is required during this conversation as the attorney will gather more extensive details and documents after being retained.  However, it can be helpful to obtain a copy of your free credit report before the consultation.  The goal of this meeting is to give the debtor information regarding the types of bankruptcy available and to determine on a basic level if bankruptcy is an option, are there other options, and whether the debtor qualifies to file.  These determinations may change as more information is gathered from the debtor.

Questionnaire and document gathering

Once the practitioner and debtor determine whether to file for chapter 7 bankruptcy or chapter 13 bankruptcy, a questionnaire will be provided to the debtor as well as a list of required documents.  Diligent and thoughtful preparation at this stage is essential to a successful case filing.

Debtors find this process tedious, but the Bankruptcy Code requires a debtor and debtor’s counsel to take these steps to provide as accurate and thorough information as possible.

Income details will include paystubs, profit/loss or proof of other income from the last six months through filing and tax returns for the previous three years.  All income of the debtor, including any side jobs, are included in the bankruptcy filing.  Documents pertaining to any assets owned are gathered by the debtor and provided to the attorney such as bank statements, car titles, security agreements, deeds, mortgages, contracts, leases, insurance policies and appraisals.  All assets are listed in the bankruptcy regardless of whether they are owned free and clear or have a lien attached.  Details regarding financial activity of the debtor are disclosed, including transfers of assets for the last four years (and in some cases ten years), payments of money to family, friends, and creditors over the last year and divorce decrees, to name a few.

Your attorney will need to know where you have resided in the last two to three years prior to filing to determine where you can file and what state or federal exemptions may be used to protect your assets.

If you have not done so already, you or your attorney will obtain a copy of your credit report.  A credit report is rarely a reflection of all your debt. Some creditors do not report to credit reporting agencies.  Additional details, including but not limited to, medical bills, student loans, domestic support obligations (such as child support and alimony), property settlement obligations in a divorce decree, contracts and prior bankruptcy filings must be provided to supplement the credit report.  All debts must be listed in the bankruptcy petition regardless of who it is owed to or whether you intend to continue paying them after bankruptcy.

The last step prior to filing your bankruptcy case is to take an online credit counseling course provided by an accredited agency.  The cost of this course varies by provider but averages around $20.00.  After completion, the provided will send a copy of your certificate to you and your attorney for filing with the petition.

Filing and Post-filing

After all documents are gathered and payment is made in full to your attorney (the bankruptcy court requires attorneys to be paid in full prior to filing), the bankruptcy petition is prepared, thoroughly reviewed by debtor and attorney together, and signed by both.

If the debtor is filing a repayment plan under chapter 13, this will undergo the same process.  A payment plan provides the trustee, the Court, and the creditors with details regarding the percentage of repayment to unsecured creditors, treatment of secured creditors and collateral securing those debts, intention to continue or discontinue leases and other contracts and the debtor’s proposed monthly payment.

The petition (and payment plan, if applicable) is filed electronically, a trustee will be appointed, and a date is set to have a hearing called a “341 Meeting of Creditors”.  At this point, these hearing are being held telephonically due to the pandemic.  Although it is uncertain, this procedure is likely to continue.

Many documents provided to your attorney will be given to the trustee for review prior to the hearing.  After verifying your identity through social security card and picture identification, the trustee questions the debtor on the record regarding the information provided in the petition.  These hearings are generally not lengthy and are streamlined in the questioning.  Your bankruptcy attorney will prepare you for the questions and attend the hearing with you.

A chapter 13 will have an additional hearing to determine whether a proposed chapter 13 plan is confirmed by the court.  These hearings are usually not attended by the attorney and debtor unless concerns and objections to the plan have not been resolved prior to the hearing.

The creditors in your case have sixty days after your bankruptcy filing to object to discharge of the debt you owe to them.  If no objections are filed in this time period, a discharge will be issued on all dischargeable debts in a chapter 7.  In a chapter 13 a discharge is not issued until all payments have been made under the proposed and confirmed plan.

If you are ready to begin your journey to financial stability, contact Susan Browning at Finney Law Firm, 513.797.2857, for a FREE consultation.

Today’s Canton Repository reports here on our latest lawsuit against the Stark County Board of Elections‘ planned purchase of Dominion Voting Systems voting machines. The contract was procured through illegal closed meetings — in executive sessions called for an improper purpose under Ohio law.

Finney Law Firm has a long history of successfully prosecuting cases involving violations of Ohio’s Open Meetings laws as part of our broad public interest law practice, including the notorious Gang of Five case involving members of Cincinnati City Council.

Contact Chris Finney (513.943.6655) for assistance with your Ohio Open Meetings issues.

Despite recent improvement in the economy the circumstances of the last year have taken their toll on the financial stability of American households.  Many are unable to manage their finances as they did before.  Bankruptcy may be an option for those individuals dealing with overwhelming debt.  This blog will explain the ways in a Chapter 13 bankruptcy may be a benefit. This type of bankruptcy is also called a “wage earner’s plan” as it requires some type of regular income to make the monthly payment over the life of the plan.

For further information regarding bankruptcy please visit our bankruptcy practice page at https://finneylawfirm.com/practice-areas/bankruptcy/.

Preparation for filing Bankruptcy

Debtors who seek the protection of the bankruptcy court must begin by providing information regarding unsecured debts, secured debts, income, expenses, and assets to their attorney in order to obtain proper legal advice on what chapter of bankruptcy is appropriate for them.  In addition, this information is necessary to fill out the required bankruptcy forms.  Your attorney will provide a list of documents to gather including but not limited to car titles, security agreements, life insurance policies, bills, tax returns, pay stubs, proof of other income, bank statements, and deeds and mortgages.  This is the most difficult part of filing bankruptcy as it can be time consuming and frustrating.  It is also the most important part of filing if you want proper legal advice regarding your financial situation and suitability to file bankruptcy.

Chapter 7 is what most debtors would prefer to file due to the lower attorney fees and shorter amount of time the case is active.  However, chapter 7 is not a solution for every debtor.

Chapter 13 is a repayment plan where the debtor pays a certain percentage back over a three to five year period.  This chapter is beneficial for debtors who have too much income to file a Chapter 7, debtors who may lose assets that are not protected by state or federal exemptions, or there may be some benefit the debtor can obtain by filing a Chapter 13 instead of a Chapter 7.

A credit report will be helpful when meeting with a bankruptcy attorney.  Anyone can pull a copy of their credit report for free once a year at www.annualcreditreport.com.  Even though this is not always a complete list of your creditors it will be a good place to begin.  The debtor will then supplement with bills and in some cases their memory of what they owe.

After an attorney reviews your information and documents, a determination will made as to what chapter is advisable to file, if any.

What will follow is further updating of documents and information, and a final meeting to review, refine and sign the bankruptcy documents before filing with the Bankruptcy Court.

Filing chapter 13

When filing a petition with the Bankruptcy Court, whether it is a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, the court imposes an automatic stay that prevents creditors from collecting from the bankruptcy debtor.  This is usually the point where the debtor feels a great deal of relief as their phone stops ringing and collection attempts have ceased.

If a debtor files a Chapter 13, a repayment plan will also be filed.  This plan details how unsecured creditors will be treated during the course of the Chapter 13.   Some creditors have a priority over others and will be treated differently than non-priority unsecured creditors.  This includes child support and alimony which must be brought current and taxes which must be paid in full through the plan. In addition, it will propose how to treat secured obligations such as car loans and mortgages.

Unsecured debts such as medical bills and credit card debts will be paid pennies on the dollar with the balance being discharged at the end of the plan.  Unfortunately, student loans will be paid pennies on the dollar as well but, as of now, are not discharged at the end of the plan.

The calculation of how much these creditors will be paid depends on the debtor’s disposable income after calculating monthly income and reasonable monthly expenses.  If the debtor has assets with equity that was not protected by exemptions, the debtor must pay back the greater of the disposable income or the amount necessary to pay back the unprotected equity.

Some benefits of filing a Chapter 13 include catching up on a mortgage in default, cramming the principal owed on a car loan down to the value of the car rather than what you owe (if purchased more than 910 days prior to filing) and possibly reducing the applicable interest rate.  Even though child support and alimony obligations are never discharged in bankruptcy, property settlements are dischargeable in a Chapter 13, not in Chapter 7.

After calculating what will be paid to unsecured creditors, mortgages, mortgage arrearages, car loans, taxes, and/or domestic support obligations a monthly payment will be proposed.

After filing Chapter 13

After filing a Chapter 13, a bankruptcy trustee will be appointed and a 341 Meeting of Creditors will be scheduled.  This meeting allows the trustee and creditors to ask questions of debtor and debtor counsel regarding the petition and the plan.  These meetings are currently being held telephonically due to the pandemic but that may change in the future.  The debtor must make the first monthly payment within thirty days of filing the petition and continue monthly thereafter.

If the trustee or creditors have concerns about the plan provisions the debtor is given time to amend the plan.  If the plan is accepted without any objections it is presented to the court for approval.  In the alternative if there are outstanding objections to the plan it will be brought before the Bankruptcy Court at a confirmation hearing to make a determination whether it will be approved.

Once the plan is confirmed, the debtor continues with payments for the remainder of the plan period and updates their attorney, the trustee, and the court of changes to their financial situation.

A further benefit of Chapter 13 bankruptcy is that it may be dismissed at any point by the debtor, whereas, a Chapter 7 may only be dismissed with court approval.

Discharge

At the end of the plan period, if all payments have been made, the debtor receives a discharge of unsecured debt, other than student loans, a mortgage in default should be current, and car loans included in the plan will be paid in full.

If you would like a free consultation with a seasoned bankruptcy attorney, contact Susan Browning at Finney Law Firm, (513) 797-2857.  Our firm provides service to Cincinnati, Northern Kentucky and the Dayton areas.  As a convenience to our clients, bankruptcy consultations can be held by phone.

There is a significant new development in Ohio property tax challenges directly and narrowly resulting from valuation reduction arising from the COVID-19 pandemic allowing such challenges this year.

As we discussed in a blog entry here, because of the unique timing of real property valuations versus billing, Ohio property owners impacted by COVID-19 rent reductions and closures really could not bring successful COVID-related valuation challenges before Boards of Revision in 2021.

To exacerbate that problem, Hamilton, Clermont, Butler and Montgomery Counties had the first year of the tax triennial in 2020 (for challenges in 2021). Therefore, if a property owner attempted a COVID valuation challenge in 2021 and lost, a property owner would be stuck with a bad (high) valuation for three years (tax years 2020, 2021 and 2022, billed and payable in 2021, 2022 and 2023).

This placed owners of certain properties in significant financial straits: Owners of apartment buildings near a university where student-based occupancy plunged or downtown when nearby office buildings cleared out, owners of large office buildings that could not rent because of COVID-related vacancies, owners of hotels and motels and other properties in the travel and hospitality industry, owners of restaurant properties and owners of malls and retail strip centers.

That all changed two weeks ago when Governor DeWine signed into law S.B. 57 which adds a second challenge period in 2021 narrowly targeted to COVID-related property valuation reduction (i.e., not that of general market conditions).

Here is the quick overview:

  • “Second bite” challenges may be filed with the Auditor only between July 26 and August 25, 2021.
  • “Second bite” challenges must narrowly be tailored to valuation reduction as a result of COVID-19.
  • The target valuation date for “second bite” valuations is October 1, 2020.
  • The “second bite” valuation reduction is retroactive to January 1, 2020 (before the pandemic hit America).
  • The “second bite” valuation reduction will last for the remainder of the triennial (in Hamilton, Clermont, Butler, and Montgomery Counties thru the 2022 tax year, billed and paid in 2023).
  • The bringing, and “win” or “loss,” of a valuation challenge for the “second bite” hearings is in addition to the general challenge filed before March 31, 2021 and does not prejudice non-COVID-related (i.e. general market conditions) challenges in later years.
  • The legal and evidentiary hurdles associated with “second bite” challenges are the same, as we see it, to challenges brought in Ohio, meaning an appraisal (supported by testimony from the appraiser) and presentation by a qualified attorney are strongly recommended.

If you have a “second bite” property that would benefit from a challenge narrowly targeted to COVID-19 economic impact, please quickly contact Chris Finney (513) 943-6655) or Casey Jones (513-943-5673) to allow us to help you secure this tax savings.

Sometimes a client comes to the Finney Law Firm concerned about their neighbor’s rights to an easement over their land leading to the question: who has the duty to maintain and repair the easement? A big concern for these clients is the cost of the maintenance and repair of the easement. These easements tend be associated with driveways and sewer lines. This blog post is designed provide some general background as to what easements are and address the cost concern for individuals in similar situations.

Background on easements

An easement is an interest that may burden another persons’ land. The interest entitles the owner of the easement to use the land in some limited way. The extent of that interest is determined by the process which creates the easement.

There are two kinds of easements, the easement appurtenant, and the easement in gross. The easement appurtenant deal with two pieces of land (e.g., two neighboring parcels) and tend to be conveyed with a sale of the land. The easement in gross deal with one piece of land (e.g., one parcel and another person’ right to use the one parcel) and tend to not be conveyed with a sale of the land.

This blog post deals with easements appurtenant.

Creation

An easement may be created by deed, prescription, or implication from the particular set of facts and circumstances. Likewise, some courts allow for an equitable easement, which is referred to as an easement by estoppel. The owner of the easement’s land is called the dominant estate. The dominant estate benefits from the easement. The burdened land is referend to as the servient estate.

Who maintains and repairs?

Generally, it is the duty of the dominant estate to maintain and repair the easement. Likewise, the dominant estate must make the necessary repairs to prevent the dominant estate from created an annoyance or nuisance to the servient estate.

That said, the servient estate can expressly undertake the duty to maintain and repair the easement. This may be done in many ways (e.g., through a maintenance agreement, a grant in a deed, or operation of law).

What if the servient estate also uses the easement?

The servient estate may also use the land on which the dominant estate enjoys an easement. However, that use must be in a way that is not contrary to the dominant estate’s limited use of the land. When an easement is used jointly by the dominant estate and the servient estate, the cost of maintenance and repair of such easement must be apportioned between the dominant estate and the servient estate, based on relative use.

Conclusion

So, if you have a similar situation to those clients that come to the Finney Law Firm concerned about their neighbor’s rights to an easement over their land and who bears the maintenance and repair costs, then it might be time to call the Finney Law Firm.

 

In the last year, our country has seen layoffs, shutdowns, job loss and shuttered businesses due to the pandemic. The government has provided some assistance by way of stimulus checks, increased unemployment payments, and moratoriums on evictions and foreclosures. This has temporarily eased concerns of those struggling financially and delayed their seeking legal advice for debt relief. It has served to stave off, what is anticipated to be, a flood of bankruptcy filings. Unfortunately, these are temporary solutions to a long-term problem.

As moratoriums end and stimulus checks are spent, debtors are searching for a resolution to their economic woes. This article provides basic information on Chapter 7 Bankruptcy as a possible solution. If you would like more information on consumer bankruptcy, please visit our law firm bankruptcy practice page at https://finneylawfirm.com/practice-areas/bankruptcy.

Types of bankruptcy filings

There are several types of bankruptcy a debtor can file: Chapter 7 (Liquidation), Chapter 9 (Municipalities), Chapter 11 (Business Reorganization), Chapter 12 (Family Farmers), Chapter 13 (Wage Earners), and Chapter 15 (Foreign debtors/ Courts . After almost two decades of being a chapter 7 Bankruptcy Attorney, the clear preference for clients is filing a chapter 7.  The reason for this is that chapter 7 is cheaper and quicker than other types of bankruptcy filings. However, it is not without its risks and downsides.

What is a Chapter 7 bankruptcy?

Chapter 7 is a “liquidation” bankruptcy. A bankruptcy trustee will examine your income, expenses, assets and debts. In order to qualify, you must be below a certain income level for your household size. If you are not below this threshold, the case may have to be converted to another chapter of bankruptcy. The trustee reviews the assets you own and what they are worth. After the trustee subtracts what you might owe to a secured creditor from the value of the asset, the balance is considered your equity.

State and/or Federal exemptions are available to protect certain necessary assets up to a certain dollar amount. These exemptions are applied to your equity in each asset.  If no equity remains after this calculation, then you are not at risk of the trustee liquidating that asset. If equity does exist after the calculation, the trustee can sell the asset and pay your creditors a percentage of what you owe to them. Most chapter 7 bankruptcy filings do not end in liquidation and are considered “no asset” cases. In the event assets may be liquidated a debtor must be prepared to lose the asset or look at other options such as Chapter 13.

Chapter 7 requirements

Before filing a bankruptcy case a debtor must take a credit counseling course. After the bankruptcy filing a debtor must take financial management course. If you seek the assistance of bankruptcy attorney, you will be tasked with gathering information and documents to assist the attorney in filling out the bankruptcy petition and schedules.  The petition and schedules will include information on all of your income, expenses, assets, and debts. After these documents have been reviewed with the debtor and attorney and filing fees have been paid, the petition will be filed with the bankruptcy court. A trustee will be appointed and a 341 Meeting of Creditors will be scheduled.

Chapter 7 procedures

Roughly six weeks after the filing of the case, the debtor will attend the 341 Meeting of Creditors (currently held telephonically). It is a short hearing where the trustee reviews your petition and clarifies its contents on the record. If you have retained counsel, they will attend this hearing with you. Creditors are allowed to attend this hearing and ask questions of the debtor regarding the debt or any collateral that secures the debt. Following this meeting, the creditors have 60 days to object to your discharge. If no objections are filed, the debtor will receive their discharge a few weeks later.

Chapter 7 outcome

Chapter 7 can discharge many forms of debt such as credit card, medical bills, debt from repossession, foreclosures, and payday loans to name a few. However, student loans, recent taxes and marital support or settlement debts cannot be discharged in a Chapter 7. It is possible to keep a car or home that you own if it is protected under the appropriate exemption and you are current on payments to the secured creditor.

Comparing Chapter 7 to Chapter 13 bankruptcy filings

In comparison to Chapter 7, Chapter 13 bankruptcy is a repayment plan over a period of three to five years. It is intended for debtors who have enough income that they can pay back a percentage of their debts over a period of time, who may have non-exempt assets they could lose in a Chapter 7 liquidation, or who may get some benefit in a Chapter 13 that they cannot get in a Chapter 7.

Conclusion

Filing a bankruptcy is not always the answer or the only answer in some situations, however, if you are seeking a fresh start by filing for bankruptcy, contact bankruptcy lawyer Susan Browning at (513) 797-2857 for a FREE consultation. Our firm boasts practicing lawyers in Cincinnati, Dayton, and Northern Kentucky who can guide you through the bankruptcy court process.

Since the coronavirus pandemic began, our economy has seen a myriad of changes. Due to the shutdowns early on many businesses had to shutter their doors. Some were unable to reopen or continue business operations. The ones that could remain open are saddled with overwhelming debt including overdue mortgages and leases.

With foreclosure and eviction moratoriums coming to an end in many states, it is expected to see more businesses close up shop. However, there may be an answer in the form of bankruptcy.

What is Chapter 11 Bankruptcy?

The Bankruptcy Code allows debtors, whether as individuals or a business, to file a Chapter 11 case to reorganize their debts. Chapter 11 is mostly known as a solution for business debtors. However, it can also be a remedy for individual debtors who have income too high to file a Chapter 7 and are who are above the debt limits for filing a Chapter 13 bankruptcy.

There are several types of Chapter 11 cases including the typical Chapter 11, Small Business Chapter 11, the new Small Business Reorganization Act Chapter 11 (SubChapter V) and a single-asset Chapter 11.

This article will focus on the standard Chapter 11 case.

Filing the Petition

A Chapter 11 bankruptcy case begins with the filing of a bankruptcy petition. This petition will include a listing of the debtor’s secured and unsecured debts, unexpired leases and contracts, income, and expenses, as well as a listing of the debtor’s assets.

This bankruptcy filing creates an automatic stay to protect the debtor from collection by secured and unsecured creditors. Creditors can request relief from stay from the court if cause exists to do so. A hearing will be held to determine whether the request for relief from stay will be granted.

Once the Chapter 11 debtor files the petition they are known as a debtor in possession. The debtor in possession will maintain control and possession of assets and continue operations while under the watchful eye of the United States Trustee and the Bankruptcy Court. At the outset of the case the debtor must close open bank accounts, opening new ones for the bankruptcy process, as well as procure insurance for assets of the estate. The debtor must provide monthly operating reports for the business.  The debtor in possession has many responsibilities similar to that of a trustee including objecting to creditor claims and pursuing preference and fraudulent transfer actions.

A Chapter 11 trustee is not appointed unless there is a cause to do so, such as debtor misconduct or inability to perform the duties of a debtor in possession.

The United States Trustee has an active role in the Chapter 11 process to ensure the debtor in possession performs their duties properly. A fee is paid to the US Trustee quarterly based on distributions to creditors. In addition, the US Trustee nominates a creditor committee to assist in oversight of the debtor in possession and the plan.

A meeting of creditors will be held with the debtor, US Trustee and creditors that choose to participate.  This allows the debtor an opportunity to explain the plan and gives the US Trustee and creditors an opportunity to question the debtor about the petition and plan.

Disclosure Statement and Chapter 11 Plan

Following the filing of the bankruptcy petition, the debtor will file a disclosure statement. The disclosure statement gives the court and creditors background information about the debtor and its business operations, such as income and expenses, debts, and information about debtor’s business model. It is meant to persuade the creditors that the proposed plan will be manageable based on the anticipated future operations of the debtor’s business.

The disclosure statement must provide adequate information for the creditor to develop an informed opinion about the viability of the debtor’s plan. The court must approve the statement.

Once the disclosure statement is approved, a Chapter 11 plan will be filed. The Chapter 11 plan will inform the court and the creditors how the debtor is proposing to classify and treat the creditors’ claims.  Some of the permissive provisions that may be part of the plan include spreading out the terms of repayment, and in many cases much longer than the five years allowed in Chapter 13 cases. Loans can be re-amortized at a lower interest rate, stripped off, or may be crammed down to the value of the secured property (except for residential property that is debtor’s primary residence).

A debtor has the exclusive right to file a plan in the first 120 days after the petition. This period may be extended with approval of the court. At the end of this exclusivity period, competing plans can be submitted by creditors. Creditors must also provide disclosure and submit ballots to creditors.

The plan must be served on the US Trustee, SEC, and any creditors who request a copy along with ballots in an attempt to encourage acceptance of the plan. The debtor has 180 days after filing to gain acceptance of the plan. This time frame may also be extended by the court.

If the debtor changes the amount or terms of a debt owed to a creditor, these creditors are considered “impaired” and may vote on whether they approve of the plan.

Modifications may be made to the plan at any time prior to confirmation. Any previously consenting creditor is deemed to accept the modified plan if no objection is raised.

Voting and Confirmation

For a creditor to vote on the plan, their claim must be scheduled by the debtor or a proof of claim must be filed by the creditor. This same process applies to any equity security holder of the debtor except that a proof of interest is filed by the holder.

Only impaired classes may vote on the plan. An impaired class is one that is not being paid pursuant to original contract terms. Impaired classes do not include administrative claims or priority claims.

A class is deemed to have accepted the plan if more than half of the claimholders accept the plan and the accepting creditors make up at least two-thirds of the total claim dollar amount in that class. At least one impaired class must accept the plan for the plan to be confirmed.

A confirmation hearing will be held by the bankruptcy court to determine if the plan will be confirmed. The court must determine if the plan was proposed in good faith, is feasible, is not likely to result in liquidation and satisfies all other bankruptcy code requirements. The court will take up any objections to confirmation of the plan at the confirmation hearing.

Discharge, Administration, and Final Decree

A discharge in Chapter 11 operates very differently than in Chapter 7 and 13. Confirmation of the plan alters the relationship between creditors and debtor. It places debtor in the position of replacing the old contract obligations owed to creditors with new contract obligations. A discharge is generally received after confirmation unless the debtor is an individual. An individual debtor must complete payments before receiving a discharge. In addition, as is the case in Chapter 7, some debts under the code are non-dischargeable.

Modifications may be made to a plan after confirmation but must meet the guidelines under the bankruptcy code. The case must not be substantially consummated which means debtor has begun payments or transferred property under the plan provisions.

The debtor must administer the case as well as provide reports to the court. Once the case has been fully administered, the debtor will request a final decree from the court.

 

If you or your business are struggling financially and would like more information regarding bankruptcy laws and the bankruptcy process please contact Susan Browning, 513.943.6650 at the Finney Law Firm for a FREE CONSULTATION.

In the current post-covid climate many homeowners are finding themselves in a position they never would have imagined: facing foreclosure and a looming sheriff sale. During the pandemic, job loss, layoffs, shutdowns, and illness caused payments to be missed.

The government response was to put moratoriums in place to prevent homeowners from losing their residence. As these moratoriums are being lifted in some places, despite the Center for Disease Control’s continuation order, mortgage companies are once again filing or reinstating foreclosures. This blog will provide information about how you may be able to save your home in the bankruptcy context as Dayton, Northern Kentucky, and Cincinnati foreclosures are on the rise. If you would like further information, please visit our bankruptcy page.

Before Filing for Foreclosure

I receive frequent calls from potential clients seeking a foreclosure attorney because they have been served with a summons and complaint for foreclosure. In some cases, there may be defenses to your foreclosure available. Foreclosure defense can be a very complex area of law, especially when there are Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) violations at issue.

Option 1: Mortgage Company Violations

Mortgage companies must follow certain guidelines under state law when foreclosing on your home. If you feel like your mortgage company has violated your rights in the foreclosure process or in servicing your loan, please seek legal advice. However, if you have been advised that there are no viable defenses to your foreclosure other options may be at your disposal.

Option 2: Short Sale or Deed-In-Lieu

In the case where you no longer have the income to pay your mortgage, you may have the option of a short sale or deed-in-lieu. Keep in mind as you explore these options that they may have forgiveness of debt consequences associated with them.

Option 3: Mortgage Modification

In every case where a potential client is facing foreclosure, I begin by recommending that they submit the necessary paperwork to request a mortgage modification with their mortgage company. This will include a statement of hardship explaining what circumstances led to getting behind on your payments. The client may qualify for payments to be reduced or delinquencies to be added to the back end of the mortgage. Sometimes a modification may solve the homeowner’s issues without anything more.

Option 4: Chapter 13 Bankruptcy

If the modification process is not fruitful and the client has sufficient income, it is possible that a chapter 13 could be filed with the Bankruptcy Court to catch up the mortgage arrearage over time while paying the regular monthly mortgage. A chapter 13 bankruptcy plan can last from three to five years depending on your income and the amount of time needed to pay the delinquent payments. Even if the court has issued an order for foreclosure and a sheriff sale has been scheduled, a chapter 13 bankruptcy can stop the sale.

Filing a chapter 13 bankruptcy may also be beneficial to resolve other debt issues the client may have including medical bills and credit card debt. Most times these unsecured debts will be paid just pennies on the dollar during the bankruptcy process. Chapter 13 can also provide a method to pay back taxes and automobile loan delinquencies.

 

If you are facing foreclosure and would like to speak to an experienced attorney to assess whether you can save your home, please contact the law office of Finney Law Firm at 513-797-2857.

Our practice areas include bankruptcy, corporate transactional, commercial and residential real estate, estate planning, employment and labor, personal injury, business and commercial litigation, tax valuation, and public interest law.

Whether one agrees or disagrees with the Ohio Department of Education’s adoption of Critical Race Theory and the 1619 Project’s for implementation throughout Ohio’s school systems, we should all agree that an open and robust debate about that policy before public bodies is appropriate and required under the U.S. Constitution. But that’s not how the Ohio Board of Education sees things.

Once they hastily adopted the new policies, they then formally forbade speakers before them from criticizing their decision. The ODE allows public comment on all other topics, but specifically not these two.

So, last week, the Finney Law Firm filed suit against ODE challenging these restrictions on speech during the public comment section of Board meetings. Read that suit here.

The Board did not just quietly and unconstitutionally squelch in a public forum,  but they explained why they were privileged — indeed compelled — to trample on the Constitution in this instance:

  • “[O]ur board president has instituted a policy that prevents people from speaking to our group in reference to any of these issues about critical race theory, etc.…  I’m not sure why we have a filter on what we’re allowed to hear here, but we do.”
  • “I was really glad when [LAURA KOHLER] said we weren’t going to have those speeches anymore”
  • “I would just prefer that we not have a conversation about critical race theory, or 1619….”
  • “I don’t want to sit here again and listen to two months of people – they have their opinions….  This is not what I’m here for”
  • “I’m using race and I don’t feel ashamed about that”
  • That if such public comments or testimony were allowed then the meeting of the OHIO STATE BOARD OF EDUCATION “would not longer be a safe space for me”

I suppose if you are that delicate and thin-skinned, perhaps you should not sign up for the rough and tumble of public office. Just a thought.

Media coverage of this is below:

For inquiries on this story, contact Curt Hartman (513.379.2923) or Chris Finney (513.943.6655).

“A mortgage is a conveyance of property to secure the performance of some obligation, which is designed to come void upon due performance thereof.”[1] The Ohio Revised Code characterizes mortgages as “liens.”[2] Mortgage liens are only applicable to real property, as with the land and the buildings attached to it.

Mortgagors (the party granting the mortgage) tend to grant mortgages to secure payment of money from the mortgagee (the party granting a loan in consideration for the mortgage).[3] The instrument evidencing the debt secured by the mortgage is generally referred to as a “note.” However, mortgagors may grant mortgages to secure the performance of other obligations, like an environmental indemnification.

Notes and mortgages, as contracts, are negotiable by the parties to them. As such, notes and mortgages include all sorts of obligations and remedies. That said, there are three basic remedies that a mortgagee can pursue to enforce the note and mortgage.[4] Mortgages can pursue all three of the following remedies at the same time or separately.[5] However, in doing so, a mortgagee must keep in mind the different statute of limitations periods for each remedy.

(1) An action on the debt secured by the mortgage (the note).

When a mortgagee brings an action on the debt secured by the mortgage, the mortgagee is bringing an action for a personal judgment debt evidenced by the note against the mortgagor (or any other maker of the note, even if they did not sign the mortgage).[6]

In Ohio, written instruments, such as notes, have a six-year statute of limitations, running from the due date(s) or, if applicable, the date the debt is accelerated.[7] When the statute of limitations runs on the note, the mortgagee can still go after the mortgagor with a foreclosure action, as the statute of limitations on the mortgage is longer. The statute of limitations for the foreclosure does not run by virtue of the statute of limitations on the note running.[8]

(2) An action to foreclose on the mortgaged property.

When a mortgagee brings an action to foreclose on the mortgaged property, the mortgagee is attempting to secure the mortgagee’s conditional interest (conditional on mortgagor default) in the property.[9] If the mortgagee succeeds here, the mortgagee will have superior title to the property than that of the mortgagor.[10] The go-to remedy for mortgagees is that of an action to foreclose on the mortgaged property.[11]

In Ohio, foreclosure actions have an eight-year statute of limitations, running from the date that the breach occurred.[12] The statute of limitations for foreclosures was changed from fifteen years to eight years on September 28, 2012.[13] For breaches that occurred before September 28, 2012, the statute of limitations runs at the end of the fifteen-year period from the breach or September 27, 2020, whichever is earlier.[14]

(3) An action of ejectment against the occupier of the mortgaged property.[15]

When a mortgagee brings an action of ejectment against the occupier of the mortgaged property, the mortgagee is attempting to take possession of the property.[16] In doing this, the mortgagee is taking advantage of the mortgagee’s superior title to the property to that of the mortgagor. [17]

In Ohio, ejectment actions have a twenty-one-year statute of limitations, running from the date that the mortgage becomes due.[18]

The aforementioned information regarding the statute of limitations does not apply to the mortgage itself. A mortgage, that is unsatisfied or unreleased of record, remains in effect for twenty-one-years from the date of the mortgage or twenty-one-years from the date of the maturity date (if any), whichever is later.[19] This, however, deals more with the purchasing of encumbered property free from the prior mortgage, and the mortgagee’s ability to enforce a prior mortgage against purchaser.

If you, as a mortgagee, have a mortgagor in default and want to enforce the note, mortgage, or both, call the Finney Law Firm today!

[1] Barnets, Inc. v. Johnson, Case No. CA2004-02-005, 2005 Ohio App. LEXIS 703, *8 (Ohio App. 12th Dist. Feb. 22, 2005), citing Brown v. First Nat. Bank, 44 Ohio St. 269, 274 (1886).

[2] Barnets, at *8.

[3] Barnets. at *9.

[4] Barnets, at *9.

[5] Barnets, at *9.

[6] United States Bank Nat’l Ass’n v. O’Malley, 150 N.E.3d 532 (Ohio App. 8th Dist. Dec. 26, 2019).

[7] ORC Section 1303.16.

[8] O’Malley, at 532.

[9] O’Malley, at 532.

[10] Search Mgmt. L.L.C. v. Fillinger, 2020 Ohio App. LEXIS 1966, *1.

[11] Barnets, at *9.

[12] ORC Section 2305.06.

[13]Ohio Real Property Law and Practice § 19.10 (2020).

[14] Ohio Real Property Law and Practice § 19.10 (2020)

[15] Barnets, at *9.

[16] Fillinger, at *1.

[17] Fillinger, at *1.

[18] Cont’l W. Reserve v. Island Dev. Corp., 1997 Ohio App. LEXIS 962, *1.

[19] ORC Section 5301.30.