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Social Security Disability benefit overpayments can be discharged in personal bankruptcy

Social Security Disability benefit overpayments discharged in personal bankruptcy

Many of our clients are currently receiving benefits from the Social Security Administration because they are permanently disabled.  So, what if  Social Security attorney, John T. Nicholson in Centerville, Ohio, won your Social Security Appeal in downtown Dayton, Ohio, and you got more money than you should have?  That is called an overpayment, and the government may attempt to collect it.

Filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy will discharge your obligation to repay the government.  The overpayment is treated the same as all other general unsecured debts.

There are some exceptions.  You cannot discharge an obligation to repay fraudulently obtained benefits.

This is the same rule with most forms of government benefit overpayments, like Workers’ Compensation benefits (a.k.a. Workers Comp).  If there was no fraud in obtaining the benefits, then you can file personal bankruptcy to discharge your obligation to repay the overpayment.

Call today for a free consultation (937) 432 – 9775.

 

Posted in Bankruptcy, Social Security SSD/SSI | Tagged , , , | 3 Comments

Columbus Ohio social security disability law firm

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BLANK 48.216038, 16.378984

The John T. Nicholson Law Offices: Columbus Office 1041 Dublin Road #103
Columbus, OH 43215 and is by appointment only. Please call
(614) 384-5800 for a free consultation or to schedule an appointment today. 

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Columbus Ohio Disability Attorney 39.971815, -83.042480

 

Ohio Office Locations:

 

 Dayton * Cincinnati * Columbus * FranklinPiqua *

Troy * Xenia * Springfield *

 

All other states call 1-800-596-1533

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Bankruptcy and the Required Credit Counseling and Debtors’ Education Courses

Bankruptcy and the Required Credit Counseling and Debtors’ Education Courses

All bankruptcies are governed by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The law requires that every person who files for bankruptcy undergo mandatory credit counseling at least 180 days before they can officially file. The credit counseling must be conducted by an organization approved by the government. Besides the credit counseling, those who file for bankruptcy also need to complete a debtors’ education course before the government will officially discharge their debts.

The U.S. Trustee program is the government agency that approves the organizations that provide the mandatory credit counseling and provide the debtors’ education program. If the group’s name appears on the U.S. Trustee program’s list of approved credit counselors and educators, then they are an acceptable option, if not, then don’t waste your time or money.

Each of these programs follows a specific timeline. The credit counseling course must happen before the debtor files for bankruptcy and the debtors’ education course must take place after the debtor has filed the initial claim. When the debtor files for bankruptcy, he must include in the already mountainous pile of paperwork a certificate of completion for the credit-counseling course. The debtor must also submit evidence that he or she has completed the debtors’ education program before the debts can finally be discharged.

The credit counseling session is meant to involve a thorough examination of the debtor’s complete financial life. The credit counselor is supposed to provide the debtor with some alternatives to bankruptcy and also give the debtor an opportunity to learn how to develop a better personal budgeting system. If the debtor cannot afford the counseling session, the credit counseling organization is required to offer the counseling free of charge. The debtor is responsible for telling the organization that he or she cannot afford to pay the fee before the session begins and will then receive a fee waiver from the organization. If the debtor is able to pay for the session, the charge could be as much as $50 dollars.

Once the debtor has completed the required credit-counseling course and has received the certificate of completion, he can then submit the certificate of completion along with the bankruptcy petition and move the process one step closer to being done. The next step is to complete the debtors’ education course. This course includes instructions for the debtor on how to develop a better budget, how to use credit wisely and how to manage money effectively. There is also a fee associated with this course, but just like the credit counseling sessions, if the debtor cannot afford the fee the education provider should waive it.

 

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What happens to my Student Loans if I file for bankruptcy in Ohio?

In any Bankruptcy Court, not just in Dayton, Ohio, the court will protect you from student loan creditors.  Once the case is filed, the court issues what is called an “Automatic Stay”, which prohibits any creditors, including student debt collectors, from taking any action to collect the debt.

In most circumstances, the Automatic Stay will keep educational loan creditors from contacting you the entire time that the bankruptcy case is pending.  In Chapter 13 bankruptcies, that period could be as long as 5 years.  In that sense, student loans are treated like all other unsecured debts.  However, whether student loans are discharged at the end of the bankruptcy is a more complicated issue.

It is very difficult, but not impossible, to discharge student loans in bankruptcy.  In order to discharge your student loans in a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, you will need to convince the Bankruptcy Court that repayment of the student loans “will impose an undue hardship on you and your dependents.”

Different federal districts have different tests that they use to determine what the borrower will need to show in order to prove “undue hardship.”  These different tests and the different courts’ interpretations make it more difficult to discharge student loans in some districts.  Student loan discharge in Dayton, Ohio, is very difficult.

In order to discharge the student debt, you will need to file what is called an adversary proceeding.  The issue will be litigated in the bankruptcy court, costing time and money.  Most bankruptcy attorneys offer free consultations, where you can get more information about the treatment of your student loans in bankruptcy.

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Bankruptcy & Divorce, which first?

Bankruptcy and Divorce

Lets take the following hypothetical situation:

Ryan and Lauren are married but soon to be divorced.  Ryan is planning on moving from the marital residence in Miamisburg, Ohio, to Tennessee with his new girlfriend Jennifer.  Lauren has already moved to Kettering, Ohio.  Can they file a joint bankruptcy together in Dayton?  Would it be better to wait and file their bankruptcy after the divorce is final?

Divorces breed bankruptcies.  During the marriage there was one household with one set of expenses.  Once one spouse moves out, there become two households and two sets of expenses, and divorce litigation can be very costly.  Filing bankruptcy is often the only solution for people getting divorced.  But how does separation and divorce affect a Chapter 7 bankruptcy or a Chapter 13 bankruptcy?

Ryan and Lauren can file a joint petition at any time during their marriage, even if they are maintaining separate residences.  Filing joint bankruptcy is cheaper because saves the additional filing fee.  However, most bankruptcy attorneys will not advise filing a Chapter 13 bankruptcy in anticipation of a divorce.  Chapter 13 bankruptcies require that the debtors make monthly payments for 36 or 60 months.  This is impractical to do if the individuals involved will no longer be married.

The timing of the two separate cases in Ohio is also important.  Filing either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy will stall any existing divorce proceedings.  The bankruptcy court issues what is called an Automatic Stay at the beginning of the bankruptcy that prohibits anyone from taking action on any debts.  Therefore, the divorce court cannot divide the debts of the spouses until the divorce case is final or a Relief From Stay is obtained from the bankruptcy court.  It is often considered preferable to file the joint Chapter 7 bankruptcy a couple of weeks before filing the divorce case, as the Chapter 7 bankruptcy does not generally take as long as a contested divorce.

A skilled bankruptcy attorney will be able to answer all of your questions about filing bankruptcy in the context of a divorce or separation.  Many Dayton-Springfield area attorneys offer free bankruptcy consultation.

Posted in Bankruptcy, Family Law | Tagged , | 1 Comment