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The Purpose of the Automatic Stay

On Behalf of O’Brien Law Firm, LLC

Posted on: September 27, 2022

When filing a bankruptcy petition with the court, debtors are frequently not completely aware of the rights the bankruptcy code gives them. One of the most significant rights is the ability to be exempt from creditors’ collection efforts after the bankruptcy petition has been filed. An automatic stay is important because it stops creditors from continuing to try and collect a debt at the same time, the bankruptcy petition is being processed in the court system. It allows the debtor to carry less of the burden of accumulating debt.

Reasons the Automatic Stay is So Important

It’ll keep your lights on. The automatic stay will stop the disconnection of your utilities for at least 20 days. Your utility company cannot threaten to cut off your water, electric, gas, or telephone service because you are late on a bill. Although the cost of a power payment alone rarely makes filing for bankruptcy a good idea, it might if you have other debt you can discharge. Be aware that the utility company can ask you for a deposit to guarantee future payments.

It’ll Keep You in Your Home. The automatic stay may be helpful if you are being evicted from your home, but it is typically only temporary. The automatic stay won’t impact these eviction proceedings if your landlord already has a judgment of possession against you at the time of filing; the landlord can carry on as usual. The automatic stay won’t help you much if the landlord claims that you have been harming the property or using illegal substances there. In other situations, the automatic stay may give you a few days or weeks to move out, but the landlord would likely ask the court to lift it and permit the eviction, and the court will probably grant his request.

It’ll Stop Garnishments. When you file for bankruptcy, most garnishments are immediately stopped. You can erase eligible debt through bankruptcy, such as credit card obligations and personal loans, and receive your total wage. Be careful that debts frequently garnished—like those for continuing alimony and child support—won’t be forgiven. Depending on the bankruptcy chapter filed, past-due child support and back taxes will vary.

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Can I Keep Any Assets?

On Behalf of O’Brien Law Firm, LLC

Posted on: September 13, 2022

Most people want to know if they may maintain their property while considering Chapter 7 or Chapter 13 bankruptcy. The short response is perhaps. There is a catch to Chapter 7 bankruptcy: if you own too much property, the bankruptcy trustee may sell some of it and distribute the proceeds to your creditors.

What kind of property may you keep, then? Exemptions—state rules that outline what you are permitted to protect in Chapter 7 and Chapter 13 bankruptcy—determine the answer.

What Are Bankruptcy Exemptions?

Exemptions allow you to protect a specific amount of assets during bankruptcy, including a cheap automobile, business equipment, clothing, and a retirement account. If an asset is exempt, you won’t have to worry about it being taken or sold for the benefit of your creditors by the bankruptcy trustee assigned to your case.

Many exclusions cover particular types of property, such as a car or furniture, up to a certain dollar level. In some cases, an exemption safeguards the entire asset’s worth.

What Assets Are Non-Exempt?

Anything that isn’t protected by bankruptcy law is regarded as non-exempt, and, in Chapter 7, the trustee may sell it to recoup the debt. How much the debtor in a Chapter 13 bankruptcy will have to pay creditors whose debt is not secured by collateral is based on the value of the non-exempt property.

Non-exempt assets can include:

● Secondary residential property such as a vacation house
● A second car
● Investments (not including retirement accounts)
● Recreational vehicles like boats or motorcycles
● Art
● Musical Instruments
● Fur coats
● Extra televisions
● Jewelry
● Coin collections
● Family heirlooms

There are numerous ways for a filer to prevent a non-exempt asset from being liquidated under Chapter 7 bankruptcy regulations. You can try to persuade the trustee to take an item of exempt property in its place if it’s important to you, or you can offer to repurchase the item from the trustee.

The trustee may determine that a piece of non-exempt property is too difficult to sell or isn’t valuable enough to warrant selling it to benefit the creditors. In that situation, the trustee will formally return the item to you by filing a Notice of Abandonment.

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Most common medical conditions that lead to debt

On Behalf of O’Brien Law Firm, LLC

Posted on: August 17, 2022

Medical bills are a significant source of debt for many American households. In the United States, health care costs are behind more than $88 billion of consumer debt.

Any hospital visit or emergency treatment can quickly become a financial nightmare, but certain medical problems are more costly or require more frequent care than others.

Ongoing treatment for specific diseases and chronic pain

Most medical debt comes from specific diseases and conditions such as heart disease or gastrointestinal problems. Costly treatment is a major reason why so many Americans choose to reduce debt burdens by filing for bankruptcy.

As with specific diseases, chronic pain and injuries usually require ongoing treatment, and medical bills can add up for a long time.

One-time medical expenses

When the unexpected happens, such as a car accident or a broken bone, medical debt is often the result of turning to credit cards without any other options.

Surgery, both emergency and planned, is among the most costly one-time medical expenses. Whether it is the knee, back or another type of surgery, these procedures often cost more than average-income households are ready to take on.

Dental issues

For some individuals, teeth are a top concern leading to high medical debt. Because many people do not have adequate or any dental insurance, they may have to cover dental expenses out of pocket.

According to research by the Kaiser Family Foundation, other top medical conditions that lead to debt include mental health issues, pregnancies and infections such as pneumonia and the flu. Whatever the reason for high medical debt, struggling adults should know that there is help out there.

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American medical debt statistics

On Behalf of O’Brien Law Firm, LLC

Posted on: June 16, 2022

America has a growing medical debt problem. The United States Census claims that 19 percent of households cannot afford medical care.

The Census also says the median amount of debt was $2,000. Medical debt is particularly devastating because it often leads to bankruptcy and the forced neglect of other medical treatments.

Education is a risk factor

Some factors influence the likelihood of medical debt. Education is the largest corollary to unpaid medical bills. Over 26 percent of households without a college degree suffer from some level of medical debt. However, education above a bachelor’s degree does not necessarily decrease the likelihood of debt.

Poor health creates spiraling debt

Individuals with fair to poor health have a much greater rate of medical debt. Still, over 14 percent of healthy households cannot pay for medical bills. These families are at significant risk if an unforeseen medical emergency happens.

High medical debt afflicts lower-income families

High medical debt afflicts only four percent of the US population. The Census measures high medical debt as liabilities over 20 percent of a family’s annual income. The primary factor that contributes to high medical debt is poverty. Households that cannot afford health insurance are nearly three times more likely to accumulate high medical debt. Clearly, the combination of poverty, lack of prospects, and poor health create a snowball effect that seems impossible to alleviate.

Medical debt does not have to be a life sentence. Start by educating yourself about the various tools and resources available to people who suffer financial difficulties. Take the first step today, and start working towards a debt-free future.

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Tips for dealing with medical debt

On Behalf of O’Brien Law Firm, LLC

Posted on: May 13, 2022

Medical debt refers to the money owed for such things as a medical procedure or prescription medication. Many Americans, especially the uninsured, have medical debt resulting from an unexpected illness or injury.

Here are some tips for dealing with medical debt in the best possible way.

Negotiate

You can always attempt to negotiate the sticker price of medical bills. If you do not have medical insurance, ask about any discounts your healthcare facility provides. Many hospitals offer payment plans to those having trouble paying. Regardless of your insurance status, you can ask for an itemized bill to see exactly what the facility is charging you for.

Consider financial assistance

There are places that can help you with paying off medical bills. Ask your provider or hospital staff if they know of any organizations in your local area that provide this service. If that does not result in any leads, you can search online for medical financial assistance.

Avoid letting bills accumulate

As with any debt, you want to avoid letting medical bills pile up to the point where they become unmanageable. While you do not want to make rash decisions regarding payment, you do want to be aware of any interest that may be accruing on those bills. Attempt to pay off what you can, even if it is only a small amount.

The more you know about medical debt, the better able you are to potentially negotiate a lower payment amount, achieve better terms of payment, and avoid going into bankruptcy.

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