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3/22/2013
1
Dayton Chapter 13
Debtor Education Seminar
Presented by:
Jeffrey M. Kellner– Chapter 13 Trustee -
John Haber– Debtor Education Coordinator -
Office Policies
Administration of Chapter 13 Plan of Reorganization
Reviewing your planMonthly Payment
ModificationReduction
Length of Plan36-60 Months
Insure your Plan provides for all your Creditors Pre - Petition and Post PetitionDetermine if your Plan is feasible Incurring Credit and selling Assets
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CYA – Call Your Attorney
To sell anything of value (house, car, boat)If you want to incur debtIf you change jobsIf you’re unable to make a plan paymentIf you change your addressIf you have any legal questions concerning your case. (The Trustee and his Staff are UNABLE to give you ANY legal advice)
NDC – National Data CenterPage 6
www.13datacenter.comSet up User Name and Password
Write it DownAccess your Bankruptcy Information
Payments ReceivedPayments given to your Creditors
No Computer ??Public Library, friend or a relative
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Our records indicate the following receipts and total disbursements in. your case from Aug 01, 2005 to Aug 01, 2006. You should carefully review this. report. If you think there are any errors, or if you have any questions, you. should contact your attorney.. . RECEIPTS. DATE DESCRIPTION AMOUNT. Aug 20, 2005 UCF UNCOLLECT FUNDS/30 DAY HOLD 2,200.00-. Aug 22, 2005 ACH AUTOMATIC CK PAYMENT/60 DAY HO 2,200.00. Aug 29, 2005 PCH PERSONAL CHECK/30 DAY HOLD 1,221.00. Sep 21, 2005 ACH AUTOMATIC CK PAYMENT/60 DAY HO 1,221.00. Oct 21, 2005 ACH AUTOMATIC CK PAYMENT/60 DAY HO 1,221.00. Nov 22, 2005 ACH AUTOMATIC CK PAYMENT/60 DAY HO 1,221.00. Dec 21, 2005 ACH AUTOMATIC CK PAYMENT/60 DAY HO 1,221.00. Jan 21, 2006 UCF UNCOLLECT FUNDS/30 DAY HOLD 2,200.00-. Jan 23, 2006 ACH AUTOMATIC CK PAYMENT/60 DAY HO 2,200.00. Jan 30, 2006 PCH PERSONAL CHECK/30 DAY HOLD 2,200.00. Feb 22, 2006 ACH AUTOMATIC CK PAYMENT/60 DAY HO 2,200.00. Mar 4, 2006 UCFP UNCOLLECT FUNDS/POST DISBURSEM 2,200.00-. Mar 6, 2006 PCH PERSONAL CHECK/30 DAY HOLD 2,200.00. Apr 3, 2006 PCH PERSONAL CHECK/30 DAY HOLD 2,200.00. May 11, 2006 PCH PERSONAL CHECK/30 DAY HOLD 800.00. Jun 16, 2006 PCH PERSONAL CHECK/30 DAY HOLD 800.00. . DISBURSEMENTS. CLAIM NO. CREDITOR NAME DESCRIPTION PAYMENT. 0000 ATTORNEY FEE 900.00. 0000 JEFFREY M. KELLNER ADMINISTRATIVE EXPENSE 626.57. 0000 JEFFREY M KELLNER PAYMENT ON CLAIM .87. 0022 NATIONAL CITY MORTGAGE PAYMENT ON CLAIM 9,744.58. 0023 NATIONAL CITY MORTGAGE PAYMENT ON CLAIM 820.42. 0024 HOUSEHOLD REALTY CORP PAYMENT ON CLAIM 3,535.82. 0026 NATIONAL BANK & TRUST PAYMENT ON CLAIM 519.32. 0026 NATIONAL BANK & TRUST PAYMENT ON CLAIM 626.40. CASE NO:. CLAIM NO. CREDITOR NAME DESCRIPTION PAYMENT 0033 HOUSEHOLD REALTY CORP PAYMENT ON CLAIM 32.28 0037 NATIONAL CITY MORTGAGE PAYMENT ON CLAIM 1,898.74 The undistributed funds on hand as of Aug 01, 2006 was 50.00 .. If you have any questions, contact your attorney. DO NOT CALL THE. CHAPTER 13 OFFICE..
What you can expect from the Trustee’s Office
At the End of Plan (Keep these in a safe place)Certification of Final Payment and Case History by Chapter 13 TrusteeCertification by Debtors regarding issuance of Discharge OrderDischarge OrderFinal Report
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Debts you will still owe after Discharge
Primary Home MortgagesChild Support and Child Support Arrearages (not paid off in Bankruptcy)Governmental funded or Guaranteed Educational loans or Benefit Overpayments
QUESTIONS ??(Last chance)
After this class The Trustee is unable to
answer any questions
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LET’S TAKE A BREAK
5 Basic Steps to Financial Success
1. Get a Fixed Mortgage Rate
2. Get on a Budget
3. Create an Emergency Fund
4. Good Consumer Decision Making Skills
5. Keep in touch with your Credit Report
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Mortgage Foreclosures Filed in Montgomery County
1319
2455
3997 4050
5076 5200
7549
6100
46823957 4206
0100020003000400050006000700080009000
1997 2000 2004 2005 2006 2007 2008 2009 2010 2011 2012
Foreclosures
Foreclosures 2012
Greene County Miami County 6.3% increase
Leading Causes
Predatory Lending
Change of IncomeJob LossDivorceMedical Illness
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Fixed Rate Mortgages
Monthly Interest Rate stays the same
Current Rate for Fixed Mortgage is 5.75%
Length of Time is usually 15 or 30 Years ($200,000)15 Year Fixed . 5.75%. Payment = $1660.82
Interest = $98,947.4330 Year Fixed, 6.25%. Payment = $1231.43
Interest = $243,316.39
If you are going to own the home for over 5 years.
Adjustable Rate MortgageInitial Rate is Lower than Fixed Rate
Monthly Interest Rate is AdjustableBased upon the Rise or Fall of Interest Rates of US Treasury Notes
Usually has a Cap to protect you from enormous increase in monthly payments
over the Cap is added to the future Monthly Payments
If you are going to own the home for 3 to 5 years
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Three Steps to finding the Right Mortgage
1) Estimate how long you expect to live in the House
Up to 5 years (ARM)Over 5 years (Fixed)
2) Shop around for Mortgage RatesBanks, Credit Unions, Mortgage CompaniesCompare at least Six Lenders in your area
3) Add up all the costs for each LenderInclude Fees, Points, Closing Costs, Etc..
Budget DevelopmentCalculating Income
(2-2)• Gross Income (total wages)
– Hours Worked X Hourly Wage = Gross Pay• 40 hours x $10.00/hr = $400.00 Gross
• Net Income (total wages – deductions)– Gross Income - Deductions
• $400.00 Gross Minus:– Taxes ($80.00)– Insurance ($40.00)– Retirement Savings ($20.00)
» Net Income = $260.00 (take home)
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Identifying and Classifying Monthly Expenses
(2-8)
• Fixed Expenses– Mortgage/Rent, Car Payment, Insurance,
- Chapter 13 Plan payment -
• Variable Expenses– Utilities, Groceries, Gasoline, Clothing
• Periodic Expenses (Unexpected)– Car Repair, Medical Bills
Trimming Variable Expenses
• Avoid ATM fees• Pack lunches for work or school• Take Advantage of Coupons• Minimize Utilities.
– (Vectren,DP&L,Cable,Phone)• Eat out less frequently • Go to the Dollar Store for basic supplies• Car Pool or Use public transportation
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Money Management
• Keep Financial Records
– Write down Income from all sources(2-2)
– Predict Future Expenses by reviewing Past Expenses. (2-6….2-7)
• Income – Expenses = Monthly Budget(2-10)
Budget for the Unexpected
• Emergencies– Medical Illness– Car repair– Job Loss
• Periodic Payments– School Activities– Prescriptions– Holidays
• Put back 5-10 percent of your take home pay as you’re able to afford.– Put it away in a
separate account.
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Develop Your Personal Spending Plan (a Budget)
(2-9)
• What money is coming in
• How much you spend on basic needs, Fixed and Variable
• How much you set aside for Periodic or Unexpected Expenses
• What is left over for your wants or goals
Budget DevelopmentSetting Short and Long Term Goals
• Goals help to guide your finances on a daily basis.
• Follow a Budget, using your Goals as a map.• Goals should be Specific and
Measurable• Write down clear goals for today, tomorrow,
and years ahead• Short Term Goals
• Will give you a more immediate sense of satisfaction
• Long Term Goals • Those goals that will require 2 or more years
to complete (may require a set of short term goals)
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Financial GoalsWorking towards realistic Short/Long
term goals(1-12)
• Specific (i.e. new car)• Measurable (i.e. how much time and money)
• Attainable (i.e. reasonable ?, possible ?)
• Relevant (i.e. does it fit your needs)
• Time-related (target date to achieve your goal)
»Review your progress in intervals
3 Key Ingredients to keep on a Budget
1. Communication2. Plan Ahead3. Keep Financial Records
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Consumer Decision Making Skills(1-11)
• Distinguish between Wants and Needs– Plan Ahead
• Want a Corvette, Need reliable transportation• Want a Home Theater, Need a Television
– Comparison Shop• Name Brands vs. Generic Brands• New vs. Used • Apples to Apples comparison ?
Avoid Impulse Buying(48 hour cool down rule)
(3-5)
• Wait 48 hours after leaving the store
• Consider if you still want or need it ?
• Check for a better price somewhere else ?
• Does it realistically fit into your Budget ?
• Carry only the Credit Cards or Cash you think you’ll use – Make a shopping list
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Being a Smart Consumer(3-15)
1) Determine what the Need is (Plan ahead)2) Determine the level of Risk of the Decision
– Low, Medium, High - Budgetary Impact3) Evaluate the Alternatives
– Comparison Shop4) Determine the Value of the Decision
– Is it worth it ?5) Pre-Purchase Evaluation
– How to Pay for it. - Will you be Satisfied ?6) Post-Purchase Evaluation
– Is it what you expected? - Did you make the Right Decision ?
Types of Loans
Equity LoansSecured Loan of money for the purchase of collateral (home/car). Lower InterestCollateral could be repossessed if not paid on timeThe Loan will reduce or may even eliminate the equity you have built up
Personal LoansUnsecured Loan to be paid back over a period of time. Interest based on Credit Report
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Types of Credit CardsMust maintain a zero balance while in Bankruptcy
5-5
SecuredInterest Rate is LowerSecurity Deposit required (Credit Limit)Pay monthly payment or Deposit will be usedOpen as soon as possible to increase your Credit Score (Discuss with your Attorney)
UnsecuredApplication Fees.Annual Fees. Monthly payments requiredInterest Rate based on Credit ReportCredit Report is reviewed. If another bill is late your Interest Rate is increased.
Costs of CreditPurchasing a $258 television set
5-9
Cash Layaway Credit Card Rent to OwnPayment $258 $86/mo. $15/mo. $18/wk
# of payments 1 3 months 20 months 78 weeks
Cost of Credit 0% 0% 21% 361%
Total Price = $ 258 $ 258 $ 303 $ 1404
Payday Loans- $15 for every $100 advanced- Annual Percentage rate of 391%
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Costs of CreditInterest Rates
Minimum Payment 2% of BalanceNo Additional Fees or Charges$15.00 Minimum Payment Accepted
$1,000 12% $1,544.95 8 yrs 3 mos.21% $3,797.52 19 yrs 7 mos.
$5,000 12% $9,545.02 21 yrs 7 mos.21% $35,798.18 73 yrs 2 mos.
Alternatives to Using Credit
Put money back from your Monthly Income. (i.e. $20/wk x 52 weeks = $1040/yr)
Save the Tax Refund
Garage Sale
Part-Time Job
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Credit Report Informationwww.annualcreditreport.com
Page 15
Open AccountsCredit LimitsCurrent BalancesNumber of Late PaymentsCollection ActionsTax LiensIf you own your own homeChapter 13 Bankruptcy is reported for 7-10 years
What to review on your Credit ReportPage 16
Personal Information (SSN, DOB, Address)
Past Due History (Did you have that acct. ?)
Public Record (Bankruptcy – Discharged ?)- Copies of Final Report / Order of Discharge to each Bureau
Inquiries (Hard Inquiries – Credit Application)(Soft Inquiries–Pre-Qualified offers)
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Credit Bureau’sPage 15
Reports may have different information(Creditors subscribe to whichever agency they want, if any at all)
TransUnion- P.O. Box 1000, Chester, PA 19022
(800) 851-2674http://www.transunion.com
Experian– 701 Experian Parkway, Allen, TX 75013
(800) 392-1122http://www.experian.com
Equifax– P.O. Box 740241, Atlanta, GA 30374
(800) 997-2493http://www.equifax.com
Types of Credit Scores
FICO (300-850)Mid 1980’sUsed primarily for Mortgage Loans
Vantage Score (501-990)March 2006Used Primarily for Home Equity/Car Loans
Ask your Lender which Score they are checking
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Delinquency Rates by FICO Score / VantageScoreChart represents how creditors perceive your risk
(higher score is less risk)
78%
60%
39%23%
12%5% 2% 1%
0%10%20%30%40%50%60%70%80%90%
100%
Up to 499/600
500-549 /601-650
550-599 /651-700
600-649 /701-750
650-699 /751-800
700-749 /801-850
750-799 /851-900
800+ / 901+
Giving your Credit Report a Check-upPage 17
Get the Facts straightened out– Personal Information, Credit Accounts, Bankruptcy
Right the Wrongs– Letter of Dispute to Credit Bureau’s \ Creditor’s– Include all Creditors in your Bankruptcy
Follow Up– Check your Credit Report again after 30-60 days– If you still disagree, you can have a Consumer Statement added
to your Credit ReportWhen the investigation is complete, they must give you the results in writing and a free Credit Report if the dispute results in a change
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Monitor your Credit Report
You can request one FREE Credit Report from EACH Agency every 12 months. If you order from only one Agency today, you can still order one from the other two Agencies at a later date.
www.annualcreditreport.comPage 15
Toll Free FACTACT (877-322-8228)
The Bottom Line for Rebuilding CreditPage 18
The bottom line for most Bankruptcy Petitioners is that not much will change immediately after your Discharge from Bankruptcy.
Within about 2-3 years after Discharge, old debts will begin to disappear.
You’ll begin to see increased Credit available, with lower Interest rates, and more favorable terms.
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Tips To Help You Rebuild Your Credit
The ability to show you have recovered from your Bankruptcy– Pay all rent, utilities, car payments, etc. on time.
Creditors/Lenders are looking to see if you are handling your finances better now versus how they were handled prior to your Bankruptcy
– Re-establish active credit accounts that report to the Credit Bureau’s
Recent late payments (within 2 years) have a greater impact than an old Bankruptcy
Keep In Touch With Your Credit Score
Accounts discharged in a Bankruptcy should not continue reporting Delinquency
Any credit balance more than 50% of maximum is going to cause a reduction in your Credit Score.
Monitor Hard Inquiries (Credit Applications)
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Keep in touch with your Credit ReportGuard Against Identity Theft
(3-13…3-14)
Place a fraud Alert on your Credit Reports and Review frequently
Close the accounts that you know, or believe, have been tampered with or opened fraudulently
File a report with the police in the community where the Fraud took place
File a complaint with the Federal Trade Commission
Maintain Appropriate levels of Insurance
If you fail to retain insurance on your home, the mortgage company will place forced insurance on it.
The cost is twice as much as regular insuranceOnly covers the Lender’s interest in the house
If you fail to retain insurance on your vehicle.State Law: Possible Court costs, Re-Instatement feesCosts associated with any vehicle damages
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Types of Auto Insurance
Comprehensive Coverage (covers everyone)Applies to damages that might be caused by fire, theft, flood, vandalism, (More Expensive)
Liability Coverage (covers the other guy)Insures you against injuries that you might cause to other people and their property as the result of an accident (Less Expensive)
The higher the deductible the lower the premium
Consumer Information(3-7)
Consumer AssistancePublic and Non-Profit Entities
Credit Counseling ServicesFair Credit Reporting (Credit Report Disputes)Debt Attorney’sUnited Credit SolutionsBanks and Lending Organizations
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Consumer Protection AgenciesFDIC Regulations
(3-7)
Ohio Laws protecting consumer’sEqual Credit Opportunity Act
Non-discriminatory CreditFair Housing Act
Non-discriminatory real estateTruth in Lending Act
Non-discriminatory costs of creditFair Billing Act
Mistakes on consumer credit card billsElectronic Funds Transfer Act
ATM cards lost/stolenTruth in Savings Act
Terms of consumer deposit accounts
National Data CenterThis image cannot currently be displayed.
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SUMMARY Chapter 13 processCall Your Attorney (CYA)BudgetingSetting Financial GoalsEffective Consumer Decision MakingCosts of Credit/LoansCredit ReportsTypes of InsuranceConsumer Information
•GOOD LUCK ON YOUR FRESH START ON YOUR
FINANCIAL REORGANIZATION