New Bankruptcy Law Changes Rules by gregory1

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									The Alert
              T HE A LERT       IS   L EGAL A ID ’ S    NEWSLETTER FOR SENIORS


VOLUME 21, NO. 5                                            SEPTEMBER-OCTOBER 2005

New Bankruptcy Law Changes Rules
  On October 17, 2005,             for low-income persons       are a low-income person,
changes will take effect in        the right to file for        generally your property will
this nation’s bankruptcy           bankruptcy relief under the  be “exempt” and you will
law.                               section of law that          be able to keep it.
  The major change that            eliminates most debt while     CHAPTER 13 allows you
will affect seniors requires       allowing debtors to keep     to pay your debts fully or
that anyone applying for           most of their property.      partially from current
b a n k r u p t c y                                                     income        on        a
protection       must Legal Aid is unable to accept new bankruptcy payment schedule.
receive        c r e d i t cases until November 1, 2005.                The advantage of
counseling from a                                                       Chapter 13 is that
court-approved non-profit            There are two types of     you are allowed to keep
organization.                      bankruptcy generally used    your home or car by letting
  The counseling must be           by consumers.                you catch up on certain
provided at no cost or a             CHAPTER 7 eliminates       past due amounts while
low cost for those unable          debt. It may require selling making current payments.
to pay.                            or    returning      some      The new law will force
  The new law preserves            property. However, if you                 (Continued on page 2)



IN THIS ISSUE:
New Bankruptcy Law Changes Rules.............................................................. 1
Find Out Whether You May Be Eligible for Benefits ....................................... 2
Apply Now for Help to Pay Heating Bills......................................................... 3
Stop Those Credit Card Offers......................................................................... 3
Avoid Payday Loans and Learn How to Manage Money................................. 4
Legal Aid Services for Seniors.......................................................................... 5

                                                                                  1223 West Sixth Street
                                                                                   Cleveland, OH 44113
                                                                                       216-687-1900
                                                                                    FAX: 216-687-0779
                                                                                 WEBSITE: www.lasclev.org
Page 2                                                         SEPTEMBER-OCTOBER 2005 ALERT


(Continued from page 1)
more people into debt              There are certain debts        until the house is sold or
repayment plans under           that cannot be eliminated         transferred.
Chapter 13.                     under bankruptcy rules.             Wages, however, are not
  Many of these will be            They include child             protected           from
people who could have           support, alimony, court           garnishment by a medical
had their debts eliminated      restitution orders, criminal      creditor.
under the old law.              fines, debts for personal           Bankruptcy generally is
  Under Chapter 7, Ohio         injuries resulting from           not advised for people
debtors are allowed to          driving while intoxicated         whose pay is so low (less
keep such things as:            (DWI), certain taxes, debts       that $154 per week) that
• $5,000 in equity in a         obtained by fraud, debts          their wages cannot legally
                                for causing willful and           be garnished.
     home
                                malicious injury and for            Here are some other
• $1,000 in equity in a
                                certain intentional acts and      situations          when
     car                        debts incurred after the          bankruptcy may not be
• $300 each in one stove        bankruptcy has been filed.        advisable:
     and refrigerator              Recent studies have            • You do not own your
• $200 per item in any          shown that medical debts              home
     household goods up to      are responsible for a large       • You can afford to pay
     a total of $2,000          percentage of bankruptcy              your current bills or
• Money received as             filings.                              debt without hardship
     Social Security or            Medical debts are a            • All of your income or
     Veterans       benefits,   major cause for seniors to            assets are from Social
     public assistance,         go into bankruptcy.                   Security, Veterans
     pensions and some             Seniors should keep in             benefits,      public
     similar      types    of   mind       that    medical            a s s i s t a n c e ,
     income.                    creditors who go to court             unemployment
  The amounts are not           to get a judgment against             compensation or, in
what you paid to buy an         them cannot force them to             some instances, a
item, but what it is worth      sell their homes.                     pension, alimony or
now.                               Medical creditors can put          child support.
  If a husband and wife file    a lien on the home, but
bankruptcy together, those      any court orders to pay the
amounts are doubled.            bills will have no effect



Find Out Whether You May Be Eligible for Benefits
  Many seniors who are          to find out if you can           include a home, vehicles,
eligible for benefits don’t     benefit     from    cost         burial plots or personal
get them because they           savings.                         possessions.
do not apply.                     Your income could be             For information, phone
  If you have a limited         as high as $14,356 with          Social Security at 1-800-
income, you may be one          assets of $11,500 for one        772-1213 or the Greater
of those people.                person    or income be           Cleveland Access to
  With the new Medicare         $19,246 with assets              Benefits Coalition at 216-
Drug program starting           under     $23,000     for        421-1350 Ext. 185 or toll
January 1, it is important      couples. Assets do not           free at 1-866-885-1650.
SEPTEMBER-OCTOBER 2005 ALERT                                                                          Page 3



Apply Now for Help to Pay Heating Bills
  Applications for the                  months for all members,                    Applications will be
Home Energy Assistance                  except wage or salary                    available at community
Program (HEAP) open in                  income       earned          by          action agencies, libraries,
September and end March                 dependent minors under                   county departments of job
31, 2006.                               the age of 18.                           and family services, area
  The program helps low-                  Both homeowners and                    agencies on aging and
income persons meet the                 renters are eligible for                 utility offices.
high costs for home                     assistance. Only those                     Applications also can be
heating.                                who live in federally-                   obtained by phoning 1-
  To qualify, applicants                subsidized housing where                 800-282-0880 between 8
must meet the total                     heat is included in the rent             a.m.        and   5   p.m.
household income limits in              are not eligible.                        weekdays.
the accompanying chart.                   In addition to proof of                  Hearing        impaired
  Households must report                income, HEAP applicants                  p e r s o n s       w i t h
total gross household                   must submit a copy of a                  telecommunication
income for the past 12                  recent fuel or utility bill.             devices for the deaf may
                                                                                 call 1 -800-686-1557.

Size of Household                                       Total Household Income
                                                        For Past 12 Months

1                                                       Up to $14,355
2                                                       $19,245
3                                                       $24,135
4                                                       $29,025
5                                                       $33,915
6                                                       $38,805
7                                                       $43,695
8                                                       $48,585

For households with more than 8 members, add $4,890 per member



                                  Stop Those Credit Card Offers

 You can opt out of those credit card offers that flood the mail.
 Call toll free 1 -888-567-8688 to stop getting credit card offers that come from
pre-approved offer lists that Equifax, Experian, Innovis and TransUnion—all
credit reporting companies—provide to businesses. Calling will end those
offers for five years. You will be sent a form that can stop the offers
permanently.
Page 4                                                            SEPTEMBER-OCTOBER 2005 ALERT



Avoid Payday Loans and Learn to Manage Money
  Would you consider             she will have paid $60 to             because they ran into
taking out a loan if you         borrow $100.                          trouble with their checking
had to pay close to a               There are options that             accounts, walked away
400% interest rate?              would cost a lot less.                and failed to pay what they
  Probably not.                     Borrowing from family or           owed. However, there
  Yet people borrow              friends or from a credit              cannot be fraud.
money at the equivalent of       union, small loan company               Financial institutions
such excessive interest          or a bank might be                    normally will not open
rates when they take out a       possible.                             accounts for people on the
payday loan.                        The important thing is to          Check Systems list.
  The availability of such       look for credit at the lowest           However, for people who
loans attracts low-and-          possible            annual            pay a $50 fee and finish
moderate income seniors          percentage rate (APR).                the classes, WECO can
in need of quick cash.              If you find you are not            set up an account with one
  Take the case of a             able to make your money               of six financial institutions.
senior who needs $100 to         last from pay to pay, there           Once the accounts are set
tide her over until she gets     are people who can help               up, WECO will deposit the
her Social Security check        you learn to manage your              $50 they paid into their
  To get that $100, she          money                                 checking accounts.
may have to write a check           One program for low                  Sites for WECO classes
for $115 dated 10 days           and moderate income                   are at its offices at 1745
later when her Social            persons is sponsored by               Rockwell Ave. and at its
Security check is expected       the WECO Fund, Inc.                   Financial       Education
to be deposited in her              Last year, it served some          Center at 11461 Buckeye
checking account.                1,500 persons and this                Ave., next to a Key Bank
  On that date, her $115         year it is running ahead of           branch.
heck will be cashed.             that number, according to               Key Bank last year
  But that first loan which      Esther Holtwick, director of          began a program there
cost her $15 adds up to an       financial education for               and at several other
annual percentage rate           WECO.                                 branches to serve persons
(APR) of 391.7% whether             It holds three classes a           with bad credit histories. It
you call it interest, a fee or   day each day to teach                 includes WECO classes
a service charge.                people how to budget, set             and      provides      check
  Compare that with a            financial goals, how to use           cashing rates below that
bank or finance company          credit cards wisely and               charged by check cashing
loan with an APR that may        how credit scores can                 businesses.
be more like 10% to 15%.         affect their financial ability          For information about
  If that person on Social       to get loans, jobs and                WECO and its program
Security we described            even to rent an apartment             call 216-370-5630.
above takes out a second         or house.                               Another organization that
$100 loan, her finance              One of the more popular            can help you get on a
charges          increase        classes is designed for               program to pay off debt
dramatically.                    people who have been                  and save money is
  If she rolls over the          reported to an agency                 ClevelandSaves, 216-781-
payday loan three times,         called Check Systems                  8090.
SEPTEMBER-OCTOBER 2005 ALERT                                                              PAGE 5


The Legal Aid Society of Cleveland offers free legal services to low-income seniors in
                                 Cuyahoga County.


                                             INTAKE
       You can complete an application for assistance by calling the Intake Line at 216-687-
1900 or toll-free at 1 -888-817-3777.
       If you qualify for our services, we will either give you advice or educational materials to
help you, schedule an appointment or refer you to a volunteer attorney.
       If necessary, you may need to meet with an attorney. If you are unable to come to
our downtown office at 1223 West Sixth Street, an attorney can arrange to meet you at
a senior citizen center or some other office near your home.

                                      SENIOR HELPLINE
               If you are a senior and have a legal question for an attorney, you may call 216-
687-1900 and ask for our Senior HelpLine on Tuesdays or Thursdays between 1 p.m. and 4
p.m.
                              VOLUNTEER ATTORNEY CLINICS
       In collaboration with the Cleveland Bar Association, Legal Aid has developed clinics
where volunteer private attorneys provide brief advice and referral only. Clinic attorneys do
not represent you. However, you may be referred to Legal Aid or another service provider for
help. All clinics are open from 10 a.m. to 12 noon. Bring with you all of your papers that
concern your problem.
       SATURDAY, SEPTEMBER 10: West Side Catholic Center, 3135 Lorain Avenue.
       SATUDAY, SEPTEMBER 24: East Side at St. Martin de Porres Family Center, 1264
East 123d Street.
       SATURDAY, OCTOBER 8: West Side Catholic Center, 3135 Lorain Avenue.
       SATURDAY, OCTOBER 29: East Side at St. Martin de Porres Family Center, 1264
East 123d Street .
       SATURDAY, NOVEMBER 12: West Side at Spanish American Committee, 4407
Lorain Ave.
                 Please call Legal Aid at 216-687-1900 for more information.


          For information or to make appointments outside Cuyahoga County,
                             phone the offices listed below.

                                  ASHTABULA COUNTY
             Ashtabula County Legal Aid, 121 East Walnut, Jefferson, OH 44047
                       440-576-8120 or TOLL FREE 1-866-873-9665

                                    LAKE COUNTY
            Lake-Geauga Legal Aid, 8 North State Street, Painesville, OH 44077
                     440-352-6200 or TOLL FREE 1-888-808-2800

                                       LORAIN COUNTY
      The Legal Aid Society of Lorain County, 538 West Broad Street, Elyria, OH 44035
                       440-323-8240 or TOLL FREE 1-800-444-7348
The Legal Aid Society
 of Cleveland
1223 West Sixth Street
Cleveland, Ohio 44113

								
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