Tax pic 2021

It’s tax time! If you’re a Chapter 13 debtor, you must do these 3 things!

It's tax time! If you're a Chapter 13 debtor, you must do these 3 things!

By Tracy L. Hirsch

If you’re currently in a Chapter 13 plan and live in the greater Louisville area, be sure to read this before turning over your tax refund money to your trustee.

As February quickly approaches, the season for submitting tax returns and receiving tax refunds is currently underway. While that’s usually a fairly straightforward process, it looks different for those who are in a Chapter 13 bankruptcy plan.

If you’re a debtor in the western district of Kentucky, and are paying back less than 100% of your debts to your unsecured creditors in your Chapter 13 plan, you are required to comply with ‘Local Rule 6070-1.’

Here’s what you need to know about Local Rule Compliance.

Local Rule 6070-1 is a set of requirements that are mandated annually in the Western District of Kentucky. If your Chapter 13 plan pays less than 100% to unsecured creditors, the requirements must be completed every year that you are in a Chapter 13 plan.

The requirements should be completed by April 15th every year, although there is a 30-day grace period if you didn’t get your taxes filed until April 15th (which means that all of the requirements must be completed by May 15th every year).

The requirements are as follows :

> Send copies of your state and federal tax returns to your trustee

> Send any state and federal tax refund money to your trustee (less certain exemptions)

> Fill out and send your annual budget to your trustee

Failure to comply with the above requirements can results in a dismissal of your bankruptcy case. You may be wondering if there are any exceptions to turning over your tax refund money, and there are, but they have to be done through the proper channels.

It’s imperative to follow Local Rule 6070-1 in order to avoid dismissal of your case.

If you’ve had a recent medical emergency or lost your job or had hours cut, there is a possibility of being allowed to use your tax refunds for medical bills and living expenses under those circumstances.

However, you must speak to your attorney first. Your attorney has to file a motion with the Court to get permission for those extenuating circumstances, so you have to speak to your bankruptcy attorney AND get permission from the Court before you spend any of your tax refunds.

If you’re in this position, this is a good time to re-evaluate your case with your attorney, which leads us to an important question that you may have:

Is a Chapter 13 plan still the best option for me, or should I consider converting to a Chapter 7?

This is a great question, and one that your bankruptcy lawyer should be able to answer. There are actually many legitimate reasons for converting from a Chapter 13 bankruptcy plan to a Chapter 7, such as:

> A drop in income due to job loss or a reduction in work hours

> Getting a divorce

> Deciding to give up your real estate (or possibly do a modification)

> Needing to replace your car due to the fact that it was totaled or is beyond repair due to excessive mileage

> Other factors that make you eligible for a Chapter 7 discharge

It’s very important that during the course of your Chapter 13 bankruptcy plan, you immediately communicate any changes to your attorney — whether it be a change in your:

> income (an increase or decrease)

> address

> marital status

> health status

> job status (total loss of job or change of employers)

> anything related to your mortgage, car, and other assets

You will risk having your case dismissed if your attorney is unaware of any of those changes, so it’s important that you notify him or her immediately in order to avoid any issues in your case.

Are you currently in a Chapter 13 plan, and want to know if you qualify to convert to a Chapter 7?

If so, speak to your bankruptcy attorney so that they can help you. Reassessing your case based on changes in your life circumstances can help your attorney help YOU (and that’s what matters most)!

Have you been considering filing for a personal bankruptcy, but aren’t sure which Chapter is right for you? I offer free phone consultations to help Louisville residents weigh their financial options when it comes to unpaid debt.

You can text or call me at (502) 435-2593 to find out how you can start on a path to a debt-free life!

All the best,

Tracy L. Hirsch

Need a free consultation? Text or call me at (502) 435-2593!

headshot 1 (2)

Meet Tracy Hirsch — Louisville’s Compassionate Bankruptcy Lawyer

Attorney spotlight

Louisville’s Tops Magazine features Attorney Tracy Hirsch.

Read a copy of the magazine article (below the photo) to find out how Tracy’s compassionate, client-centered approach stands out from the rest!

Hirsch Law PLLC

“It’s very fulfilling to practice in an area of law that helps individuals feel hopeful about their financial future,” says Attorney Tracy Hirsch of Hirsch Law. Tracy has focused on personal bankruptcy for the past 20 years.

“One of the most common issues that people stress about is money. Financial issues can affect anyone, and people need to know it’s okay to reach out for help. Most individuals think that bankruptcy will ruin their lives, when it can actually give them a debt-free future. It can also protect their car, their home, and their paychecks.”

Tracy offers a different approach than other attorneys when it comes to the bankruptcy filing process. She is directly available to her clients, and they can call and text her on her cell phone 7 days a week.

“When I graduated from law school, I started my career at a ‘big box’ bankruptcy firm,” she says. “In that environment, the attorneys didn’t talk to their clients very much, and they had their assistants do most of the work. It felt very impersonal. I decided to start my own practice so that I could help my clients directly. I want to listen to their stories, and walk them through the entire bankruptcy process with dignity and respect.”

Tracy meets with clients at their very first appointment, and is with them every step of the way. “I want to help my clients feel empowered when they file for bankruptcy,” she says, “because that’s what my clients deserve — an attorney who cares.”

It's never too late to start a debt-free life.

Ready to discuss your options? Let's chat!

(502) 435-2593

Need help immediately? Tap on the phone number to call!

cheap bankruptcy louisville ky

The Top 5 Reasons Why You Shouldn’t Try to File a Bankruptcy Petition On Your Own

The Top 5 Reasons Why You Shouldn't Try to File a Bankruptcy Petition On Your Own

By Tracy L. Hirsch

Here’s why bankruptcy attorneys are a vital part of the filing process.

It’s stressful enough to be in debt, and if you’re currently in that situation, you may be thinking that the last thing you want to do is put money toward attorney fees if you decide to file for bankruptcy. While individuals in Louisville, Kentucky are allowed to file on their own, it’s important to understand the risks involved with that.

Filing for bankruptcy is a complex process with a long list of rules that needs to be abided by in order to file successfully. Here are five reasons that show how filing on your own could lead to disaster.

1.) You might file for bankruptcy unnecessarily. Believe it or not, there have been instances when an individual called me for a consultation, and when they told me about their financial situation, I told them that they didn’t need to file for bankruptcy.

Sometimes it’s as simple as settling one solitary debt with a credit card company, and sometimes, the total amount of debt is small enough, that the interest they pay on it will be much less than the cost of filing for bankruptcy.

If the debt is medical-related, an individual may be able to set up a payment plan directly with their doctor’s office or hospital. Regardless, there are a number of scenarios where a bankruptcy might not be the best fit.

It’s important to consult with an experienced bankruptcy attorney to determine whether or not bankruptcy will actually help you in your specific situation.

Hiring a bankruptcy attorney saves you time and money in the long run, and eliminates unnecessary stress.

2.) You might choose the wrong chapter of bankruptcy. Individuals have two options when it comes to filing for bankruptcy — Chapter 7 and Chapter 13. A Chapter 7 wipes out the majority of your debt without any repayment, and a Chapter 13 is a reorganization of debts where you set up a repayment plan to pay back some or all of your debts.

If you have assets, such as a home or car, you’ll want to discuss your options with an attorney to choose the path that will give you the most protection in terms of keeping those assets. In order to determine which is best for your situation, you’ll need to fill out a ‘Chapter 7 Means Test Calculation’ form, which leads to the next point.

3.) You might fill out the Means Test incorrectly. This form helps calculate your debt payments, income, monthly living expenses, and more in order to make some very important decisions in regards to filing a Chapter 7 versus a Chapter 13.

While you may be tempted to fill this out yourself, it’s a lot more complicated than it seems. Underestimating income and even leaving out a source of income such as rental income, alimony, or even year-end bonuses, could result in an objection to your bankruptcy or an allegation of fraud.

4.) If you need to file a Chapter 13, you might miss a deadline that you didn’t know about, and your case could get dismissed. Did you know that you have to complete credit counseling before you file for bankruptcy, and then have to complete a financial management course after you file?

Did you know that you will have a court hearing after you file, which you must attend in order to get your bankruptcy plan confirmed?

Did you know that if you file a Chapter 13, each of your creditors needs to receive a copy of your Chapter 13 repayment plan? In addition, did you know that you are required to review and allow each and every claim filed by your creditors by a specific date?

Also, are you aware that you will have to file your own motions if you need to amend your plan, suspend payments, or borrow money? These are just a few of the many things that you’ll need to know how to do in order to avoid having your case dismissed.

These are complex procedures, and I’ve had multiple individuals come to me after filing on their own because they realized that they were in over their heads.

There are dozens of other rules, regulations, and deadlines that need to be met, which is why it’s a worthwhile investment to hire a Louisville bankruptcy lawyer who can ensure that you will complete everything on the checklist.

You might be thinking that it’s not worthwhile to pay attorney fees, but you’ll most likely break even due to the fact that an experienced bankruptcy attorney can help you negotiate interest rates and lower your payments on loans in both Chapter 7 and Chapter 13 cases.

Additionally, if your income is tight, an attorney can also help you set up a repayment plan where you only have to pay back a portion of your debt instead of all of it. In the end, you could end up saving tens of thousands of dollars by investing a comparatively small amount of attorney fees upfront!

5.) You might inadvertently do something illegal. Did you know that if you file for bankruptcy, then inherit money or win the lottery, you may have to hand some of the money over to your trustee to pay your creditors?

Failing to disclose any possible upcoming inheritance funds, insurance reimbursements, and lawsuit payouts could not only cause you to lose out on that money, but it could also land you in hot water if it gives the appearance that you were intentionally trying to hide that information from the trustee (it’s called an “assumption of fraud”).

There might also be other ways in which you inadvertently create an assumption of fraud.

For example, if you transfer money to family members, max out your credit cards, or even pay off a loan that you borrowed from a friend right before you file for bankruptcy, that will be viewed by the trustee as preferential treatment of creditors and/or an attempt to purposely try to cheat your creditors.

In order to avoid doing something that isn’t “by the book,” it’s important to have an experienced attorney in your corner who can help you.

There are multiple other reasons that highlight the importance of hiring a bankruptcy attorney, but these are some of the common issues that arise when an individual tries to file on their own.

Unfortunately, when a debtor makes a mistake, it can be costly, as they usually end up having to hire an attorney anyway, and then on top of that, they have to pay an additional hourly rate in order for legal counsel to fix the mistakes that were made.

If you’ve been considering bankruptcy, but aren’t sure if it’s right for you, I offer free phone consultations to help you determine the best path to take.

You can text me or call me directly on my cell phone at (502) 435-2593 to set up your free consultation. If you decide to file, we can do the filing appointment over the phone as well.

No matter what your situation is, I’m not here to judge you or shame you. I work hard to break down the stigma surrounding bankruptcy, and offer a compassionate approach to your sensitive circumstances.

I’m just a text or phone call away!

 

All the best,

Tracy L. Hirsch

Attorney-at-Law

Need a free consultation? Text or call me at (502) 435-2593!

forbearance kentucky

Is your mortgage forbearance ending soon? Don’t panic. You have options!

Is your mortgage forbearance ending soon? Don't panic. You have options!

By Tracy L. Hirsch

If you’re worried about how you’re going to pay your mortgage in 2021, you have multiple possibilities. Let’s explore them together.

In the spring of 2020, many people were out of a job or their hours had been cut due to the pandemic, and they were struggling financially. Locally, thousands of families in Kentucky struggled to pay their bills, including their mortgage.

As a result, many mortgage companies (that are backed by the federal government) offered forbearance plans under the CARES Act.

These plans allowed millions of homeowners to hit the ‘pause’ button on their mortgage payments. It wasn’t an offer to write off those payments, but simply a way to defer those payments until a later date.

While those forbearance plans provided much needed relief, many of them are now ending, and homeowners have to pay back several months’ worth of house payments. If you’re one of those homeowners, what do you do now?

Here are four options to keep you in your home:

You have options when it comes to your forbearance plan.

1.) Exit your forbearance plan. If you are now able to resume your mortgage payments, you can end your forbearance plan early. It’s important to remember that forbearance is not a type of loan forgiveness, so you need to have a financial strategy in place for paying back all of your past-due mortgage payments.

When you exit your forbearance plan, you’ll have to start paying your regular monthly mortgage payment plus the mortgage payments from the past several months. You can repay your past-due payments in a lump sum if you are able, but it is not required.

It’s a good idea to pay it all back at once if it’s financially feasible, but if not, you have other options.

You could make payments on your deferred mortgage amount, where you pay your regular monthly mortgage, and also a set amount over a three to twelve month period.

For example, if your monthly mortgage is $1,150, and you owe $6,900 from your forbearance plan, you can pay an additional $575 each month for twelve months to get it paid off.

Remember, the $575 would be in addition to your regular mortgage payment, so you would have to pay $1,725 per month for the next year.

2.) Look into refinancing or loan modification. Another option is to lengthen your mortgage loan term or do a loan modification to see if you can get a lower interest rate. Mortgage rates have been at record lows this past year, and it looks like they will stay that way for the foreseeable future.

If you can get a lower rate, that could make your monthly mortgage payment a lot lower. If your current payment is manageable, but you just need more time, you can request to lengthen your loan term to give you a cushion in terms of paying everything back.

Be sure to ask your loan servicer about these options if you feel like they would be a good fit for you.

3.) Request a forbearance extension. The majority of homeowners who signed up for mortgage relief still have active forbearance plans, as they were given six months, and then an additional six-month extension was provided by the federal government in September.

However, if you didn’t sign up for forbearance until July 15th, your initial six-month plan will end on January 15th. You can request an extension if you need it (up to six months), for a total forbearance period of 12-months. How do you do that?

Contact your mortgage servicer at least a month (ideally sooner) before your forbearance plan ends to let them know that you need an extension. They should be able to provide you with the paperwork that you need to get that filed. Just be aware that you’ll most likely experience delays and lags in communication.

Loan servicing organizations are understaffed and have a high call volume, so that could mean long wait times on the phone, and dealing with multiple customer service representatives. It’s important to be persistent though because if you need an extension, the paperwork has to be completed before your initial six-month forbearance plan ends.

After reading about these options, you may be thinking, “What happens if I still can’t afford my mortgage payments after a forbearance extension or even with a loan modification?” That’s a good question to ask, as it’s vital to have a plan in place.

This brings us to our final option that has multiple different avenues:

4.) Opt for short sale, deed in lieu of foreclosure, or Chapter 13 bankruptcy.

If you absolutely can’t afford to keep your home, you could sell your home through a short sale or a deed in lieu of foreclosure. It’s best to do what you can to avoid foreclosure, and another way to do that is by filing for a Chapter 13 bankruptcy.

In a Chapter 13, you could pay back your mortgage arrearages over a five-year period, which would actually allow you to keep your home instead of selling it!

While bankruptcy might seem like an undesirable option, it can actually help you with more than just your mortgage. In addition to being able to keep your home, a bankruptcy could help you protect your paycheck from being garnished due to unpaid debt.

You could include any medical bills from hospital and doctor offices in your bankruptcy, as well as any credit card debt that may have accumulated due to being furloughed during the pandemic.

Furthermore, you could repay a car loan through your Chapter 13 plan, as well as tax liabilities and other debts. Due to the “automatic stay,” creditors can’t threaten to take any assets that are included in your bankruptcy petition (home, car, paycheck, etc.) once you officially file it.

If you want to know whether a short sale, a deed in lieu of foreclosure, or a Chapter 13 bankruptcy is the best option for you, I offer free phone consultations to discuss those options. This has been a stressful year for all of us, and I’m here to help.

You can text or call me directly at (502) 435-2593 to discuss the best way for you to obtain financial freedom. Here’s to a hopeful 2021!

All the best,

Tracy L. Hirsch

Louisville Bankruptcy Lawyer

Ready for your free consultation? Text or call me at (502) 435-2593!

lab tech

Kentucky Residents Could Pay $0 for COVID-Related Treatments

Kentucky Residents Could Pay $0 for COVID-Related Treatments

By Tracy L. Hirsch

Unsure about how much you would have to pay if you needed testing or treatment for COVID-19? If you have health insurance through one of the major carriers in Kentucky, it may be nothing at all.

When it comes to health care, it’s imperative to know what kind of coverage your plan provides. Many of my bankruptcy clients have medical debt, even though most of them have health insurance. This is because high deductibles and out-of-pocket maximums can add up to thousands of dollars from just one health incident.

Because of this reality, many Americans are currently worried about what kind of financial repercussions they would have if they were to get tested and/or treated for COVID-19. We decided to do some research to give Louisville residents peace of mind in regards to this prevalent issue.

There are four major health insurance carriers in Western Kentucky, and all four are currently waiving fees associated with COVID-19 testing and treatment. (It’s important to note that there are exceptions, so it is imperative that you directly contact your health insurance company to verify your coverage.)

Is your insurance company waiving medical fees related to COVID-19 testing and treatment? Find out below.

The table below provides information on whether or not each of the health insurance companies waives fees for testing, out-patient treatment (i.e. doctor’s office), and in-patient treatment (i.e. hospital admission) for COVID-19. It also shows the end date for the coverage.

 

Testing

Out-patient

In-Patient

End Date

United Healthcare

Yes

Yes

Unknown

12-31-2020

Anthem BCBS

Yes

Yes

Yes

12-31-2020

Humana

Yes

Yes

Yes

Ongoing

Aetna

Yes

Yes

Yes

12-31-2020

Humana:

While the other three health insurance companies are waiving COVID-related fees until the end of the month, Humana states that they are doing so indefinitely.

They have yet to determine an end date, so as of now, they are the only local insurance company that is providing free coverage for testing and treatment of COVID-19 (including hospital admission) after the new year.

It’s important to note that they are waiving COVID-related fees only for certain types of plans. Click here to see which plans qualify (when you get to the Humana page, click on the “COVID-19 treatment” tab to see the list of qualifying plans). 

Anthem BCBS:

Just like Humana, Anthem is waiving all fees for testing and treatment of COVID-19 (including hospital admission), but only for certain types of plans. In addition, this free coverage ends on December 31, 2020.

Be sure to call the Member Services phone number in the back of your insurance card to find out which plans qualify.

Aetna:

Aetna’s website states they will also fully cover all COVID-related testing and treatment, including hospital admissions, for all Aetna-insured commercial plans and Medicare plans.

However, we recommend that you call to verify if your plan is indeed part of this coverage. COVID-related fees will be waived for testing and treatment that takes place on or before December 31, 2020.

Click here for more information.

United Healthcare:

According to their website, United is waiving the fees for testing and doctor visits related to COVID-19 treatment, but there is no mention of hospital admission and whether or not it would be waived.

Just like Aetna and Anthem, their free coverage of COVID-19 tests and outpatient doctor’s visits ends on December 31, 2020. Click here to learn more.

As things continue to change, be sure to check with your insurance provider, as they may extend the timeframe for waiving COVID-19-related fees.

If you have loved ones who have commercial plans through one of these insurance providers, please share this article with them. As we wrap up this stressful and unprecedented year, let’s continue to lift each other up, and hold out hope for a better year ahead.

All the best,

Tracy L. Hirsch

Louisville Bankruptcy Attorney

Need a free consultation? Text or call me at (502) 435-2593!

Lee Initiative

Free Family-Style Meals for JCPS Community

Free Family-Style Meals for JCPS Community

By Tracy L. Hirsch

The Lee Initiative is partnering with JCPS to provide meals for families of four.

The LEE Initiative recently announced a new relief effort that helps families who have been financially impacted by COVID-19.

The LEE Initiative has partnered with JCPS, Louisville Metro, Churchill Downs, Audi, and Humana to provide dinner meals for families who have children enrolled in Jefferson County public schools.

Recent reports state that approximately 8 million Americans are falling into poverty due to the pandemic. Chef Edward Lee, owner of restaurant Magnolia 610 in Old Louisville, is the co-founder and director of programming for The LEE Initiative.

He explains how those recent statistics led him to create his new program:  

“This program is more than just feeding families; it is helping families avoid facing poverty. We hope the entire city will join us in proving that Louisville can be a truly compassionate city, and that we can create innovative solutions to the hunger issues that have become so rampant.”

In addition to feeding families in need, The Lee Initiative is also providing work for cooks who have been laid off due to the pandemic.

They are hiring 50 cooks to work to make 8000 boxed meals a week. The meals will be prepared in the Churchill Downs kitchen, and each box will feed a family of four.

Free meals for entire families are being distributed due to COVID-19 financial hardships.

David Danielson, the Executive Chef of Churchill Downs says, “We love working with The LEE Initiative to take the stigma out of getting a free meal, and making sure families have a high-quality, chef-prepared meal.”

Each boxed meal will be frozen, and will come with instructions on how to reheat the meals in the oven or microwave.

The meals will be distributed on Tuesdays and Thursdays through JCPS’s meal pickup locations as seen in the photo below (the same locations where free student breakfast and lunch meals are distributed).

To find out what time the meals can be picked up, please check the emails that you receive from your children’s school or call your local school for more information.

If you know people who have children in JCPS, please share this article. As Chef Lee said, let’s all come together to prove that Louisville is truly a compassionate city ~ because that’s what we are.

All the best,

Tracy L. Hirsch

Louisville Bankruptcy Attorney

impact of debt louisville ky

The Top 5 Ways that Debt Has a Negative Impact on Your Life

The Top 5 Ways that Debt Has a Negative Impact on Your Life

By Tracy L. Hirsch

Debt doesn’t just affect financial health — it can affect physical and emotional health too.

Having debt can keep you from being able to pay your monthly household bills, but did you know that there are multiple other ways that debt can adversely affect your life? Here are the top five ways that debt can be detrimental to your health, your well-being, and your future:

1.) Debt keeps you from achieving your long-term goals. If you’ve dreamt of home ownership, buying a car, or getting an education, having massive amounts of debt can get in the way of those goals.

Why? You’re unable to save up money, which keeps you from making those long-term investments.

When you have room in your budget to save for a down payment on a vehicle or home, and when you’re able to stock money away in your retirement fund, you can obtain the long-standing goals that you have for you and your family.

When you have debt, your extra cash flow is be rerouted to that debt instead of your dream investments.

2.) Debt creates more debt. Once you accumulate a fair amount of debt, it usually has a domino effect where you end up accumulating more and more debt.

For example, if you have a $3,500 charge on one of your credit cards, you’ll be paying a monthly payment on that debt, which takes away from your monthly household budget.

When your monthly budget no longer covers all of your bills, you’ll end up putting basic necessities on your credit card, like groceries and gas, which will increase your monthly credit card payment.

Often, this spirals out of control, and you end up having high balances on multiple cards, and no way to even make the minimum payments on all of them.

And it’s amazing how quickly it happens!

Debt can negatively affect your health, your long-term goals, and your relationships.

3.) Debt impairs job performance. When you have debts that you can’t pay, your creditors will start to come after you. Receiving phone calls from creditors is never a good feeling, especially when they’re threatening to take your home, car, and/or paycheck.

If you go an extended period of time without (at least) making minimum payments, your creditors will most likely sue you so that they can garnish your wages.

When a creditor obtains permission from the local court to garish your wages, this means that they can legally take up to 25% of each of your paychecks.

When you know that your paychecks are at risk, your level of stress will most likely affect your job performance, as stress causes a lack of focus and drive. This leads us to our next point…

4.) Debt has an impact on mental and physical health. Studies have been conducted that show a correlation between debt and depression (and/or anxiety).

When the brain experiences mental stress, that eventually manifests into physical health issues in the body, such as insomnia, stomach pains, high blood pressure, high glucose levels, and headaches.

If any of those health issues become chronic, you’ll end up at the doctor’s office quite a bit, and the medical bills will not only add more debt, but will also compound your health issues by adding more stress to your life.

5.) Debt harms relationships. One of the top reasons that married couples fight (and get divorced) is differing perspectives on finances. If one views debt as something that’s not a big deal and the other doesn’t view it that way, this can lead to conflict.

When married couples have budgets and each person sticks to that budget, that creates a trusting foundation (as well as no debt!), which helps to minimize conflict and stress.

While going into debt is sometimes unavoidable when it comes to unexpected bills for emergency medical care, a home repair, or a replacement of a car part, it’s important to try to avoid it all costs for non-essential items or services.

However, we understand that life can be unpredictable, and things come up that aren’t covered by the funds in your savings account.

If you’re currently in that situation, you might be wondering, “What’s the best recourse? How can I pay off my debt in a way that makes me feel hopeful and not stressed?”

We recommend the Snowball Method. The Snowball Method is an excellent way to pay off credit card debts and any other debts (medical bills, etc.), mostly because you can see your total debt balance go down quickly.

This reduces stress and gives you hope that you won’t be in debt for decades.

If you’re at a point where you have too much debt for the Snowball Method to work, filing for a personal bankruptcy will most likely be a better alternative.

While bankruptcy tends to carry a stigma, it can actually be one of the wisest financial decisions you’ll ever make.

Bankruptcy can help you pay back some (or all) of your debt while protecting your home, car, and wages from your creditors. In some cases, you can even discharge all of your debts without paying any of it back!

If you want to learn more about bankruptcy in Kentucky, and whether or not it will help your specific situation, I offer free phone consultations.

I understand the stress and anxiety that comes with crushing debt, and I’m here to help. You can text me or call me on my cell phone at (502) 435-2593.

Financial freedom could be closer than you think, and I would love to help you find it.

All the best,

Tracy L. Hirsch

Louisville Bankruptcy Attorney

Need a free consultation? Text or call me at (502) 435-2593!

wallet

What’s the Best Way to Pay Off Credit Card Debt? The Snowball Method.

What's the Best Way to Pay Off Credit Card Debt? The Snowball Method.

By Tracy L. Hirsch

If you’ve been searching for an effective way to pay off credit card debt, this is it, and it’s super easy to follow.

Do you have debt on multiple credit cards? Have you been making the minimum payments on all of them, and feel depressed seeing the balances hardly budge? You’re not alone.

According to debt.org, more than 189 million Americans have credit card debts. Out of those millions of Americans, each household has an average of four credit cards with an average total balance of $8,400.

If this describes your situation, you might be feeling hopeless. However, it’s important to know that in many situations, you can pay off your credit card debt, and end up living debt-free.

You can achieve that by looking closely at the numbers. Once you do, you can implement the ‘Snowball Method,’ which is done in three simple steps:

1.) Create a list of your credit card debt information. While sitting down and assessing your debts on multiple credit cards can be overwhelming and daunting, it’s the first step to getting rid of it. First, you need to write or type up a list of all the balances. Type them up in order from smallest balance to largest balance.

Next to each total, you’ll also need to list the minimum monthly payment that is required for each card. It might look something like this:

                               Total          Min. 

American Express:   $548            $25

Mastercard:              $1,307         $35

Visa:                        $2,252          $50

Discover:                 $4,023          $95

The Snowball Method can help you pay off all of your credit card debt in as little as 12 to 24 months.

2.) Assess your budget. Look at your household budget, and see how much money you have left at the end of each month. If you’re bringing in a net income of $2800 a month, and you have $800 left, put 10% of it into your savings account, and put the rest toward your debt. In this example, you would have $720 a month to put toward your debt.

3.) Pay off each debt one at a time. Instead of dividing the $720 four ways and putting $180 toward each of the cards, pay the minimum on the rest of the cards, and put a large lump sum toward the card with the smallest balance.

For example, if we look at the list above, you would pay the minimum payment on the Mastercard, Visa, and Discover cards, and put a large payment toward the American Express balance.

So if you had $720 a month to put toward credit card debt, you would put $180 ($35 + $50 + $95) toward the three cards with the highest balances, and put $540 toward the card with the smallest balance.

By doing this, you would basically pay off the entire balance on the American Express card in one payment!

4.) Continue paying off the credit cards in order of the lowest balance. In this scenario, once you paid off the American Express card, you would put large payments toward the Mastercard balance, and pay the minimum payment on the Visa and Discover cards, and so on.

Why is this method so effective? If you continued this method in our sample scenario, you would pay off $8,130 worth of debt in approximately 12-14 months!

The most important reason that his method works is that it gives you hope that you’ll get out of debt. When you pay off an entire card balance, it’s incredibly encouraging and motivating.

To the contrary, when you put a little amount toward each balance, it seems like there’s not a light at the end of tunnel, as your balance on every single card goes down little by little. When you see that you’ve taken an entire credit card off of your list of debts, it makes you want to pay the rest off so that you can live debt-free.

The other reason is that it forces you to stick to your budget. In the example above, if you have $720 left over each month after paying all of your household bills, it’ll be tempting to pay only the minimum on every single credit card, and then spend the rest on unnecessary items.

While buying the latest gadgets may give you a temporary serotonin boost, it won’t give you an escape from your credit card debt.

Now more than ever, it’s important to continue to pay off debt so that we can save for any unexpected expenses that may arise in the future. When utilizing the ‘Snowball Method,’ you could potentially pay off all of your credit card debt in as little as 12 to 24 months.

If you’re in a place where you have more than $10,000 in credit card debt, plus other debts that you are unable to pay, it could be beneficial to consider filing for bankruptcy. It’s important to consider that when you can’t afford to pay the minimum payments on all of your balances, as not making payments will have negative repercussions.

If that describes your situation, please text me or call me at (502) 435-2593. I offer free consultations to help you decide if your debt is manageable (where you can pay it off yourself), or if it’s too high to the point that you’re in danger of having your home go into foreclosure or having your wages garnished.

There’s no shame in asking for help, and I’m happy to provide you with the information that you need so that you have a stable financial future.

All the best,

Tracy L. Hirsch

Attorney-at-Law

Need a free consultation? Text or call me at (502) 435-2593!

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Kentucky Residents Over the Age of 65 Can Save $365 a Year on Property Taxes. Here’s How.

Kentucky Residents Over the Age of 65 Can Save $365 a Year on Property Taxes. Here’s How.

By Tracy L. Hirsch

The Kentucky Homestead Exemption saves hundreds of dollars a year for homeowners, and it can be claimed with one simple form.

As we continue to navigate the negative economic effects of COVID, it’s now more important than ever to find ways to save money. Whether it’s digital coupons, weekly sales, or substantial discounts through store memberships, every penny counts.

While finding cleaning supplies on sale and buying bulk at Costco are a great start, what else can we be doing to save money? And more specifically, how can we help our elderly parents, grandparents, aunts, and uncles?

In Kentucky, there are multiple tax exemptions available, and most Kentucky residents don’t realize that there are exemptions specifically for residents who are 65 and older.

If you have parents or grandparents in their 70’s, 80’s, or 90’s, they have many exemptions that they may not be utilizing, and one of them is the Kentucky Homestead Exemption.

What’s the benefit of this homestead exemption? In a nutshell, it reduces property tax liability. This is achieved when the exemption amount is subtracted from the assessed value of your home or property.

The Homestead Exemption is one way that we can help our parents and grandparents save money during these difficult times.

If your parents or grandparents are over the age of 65 and own property in Kentucky, theHomestead Exemption can save them hundreds of dollars a year. The best part? They can claim that exemption by filling out and mailing a simple, one-page form, and it only has to be filled out once (unless they move).

Here are the criteria:

> Must be 65 years old or older AND/OR have a disability where they receive SSI.

> Must own the property AND have lived on the property before January 1, 2020.  

The current Homestead Exemption is $39,300, which means that a property owner can save approximately $365 a year. That’s a dollar a day being put back in their pocket just for filling out a one-page form!

It’s important to note that only one exemption will be given, as only one per household is allowed under the Kentucky Constitution. So if two people (for instance, a married couple) live on the same property and are both over the age of 65, they can’t get two exemptions.

If they live on land that is technically a commercial property, they can still claim the exemption. As long as they’re the occupant of the property and they own the property, it doesn’t matter if the property is listed as residential or commercial.

It’s also important to note that if they end up selling or transferring their property, they’ll need to contact the Property Valuation Administrator’s office.

In regards to applying for the exemption, the first step is to print the Homestead Application which can be found here.

After that form is filled out, it needs to be mailed — along with a copy of the applicant’s active Jefferson County driver’s license (or any other valid form of ID that has been issued by the Circuit Clerk in Jefferson County) – to the following address:

Jefferson County PVA Office

Glassworks Building

Attn: Homestead

815 W. Market Street, Suite 400

Louisville, KY 40202

If you know someone who is 65 years of age or older who would qualify for this exemption, please feel free to share the link to this article with them.

If they still have questions, they can call the PVA Office at (502) 574-6380 or they can email their questions to pva@jeffersonpva.ky.gov.

To see the official information from the Jefferson County PVA’s office regarding the Homestead Exemption, click here.

During these hard economic times, it’s important to help ourselves and our loved ones in any way that we can. We’re all in this together!

All the best,

Tracy L. Hirsch

Bankruptcy Lawyer Louisville KY

Need a free consultation? Text or call me at (502) 435-2593!

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JCPS is Giving Free Meals to All Students

JCPS is Giving Free Meals to All Students

By Tracy L. Hirsch

Here are the details on how you can get free, healthy food for your children.

As students and parents are adjusting to full-time virtual learning, life feels all the more stressful. Balancing working from home while helping kids with their school work is no easy task.

To add to that stress, money may be tight due to reduced hours, and you might be struggling to put meals on the table.

In order to lift some of the burden, I want to share some important news. If your children attend any school in the JCPS system, each child can receive free meals that cover five days’ worth of breakfasts and lunches.

Last week, Jefferson County Public Schools launched a free meal initiative after receiving a federal grant of $835,000 from the ‘Fresh Fruit and Vegetable’ program.

This grant provides breakfast and lunch entrees, as well as drinks, vegetables, and fruits, so that students have access to healthy, well-balanced meals.

Each JSCP student can receive a total of 10 meals every week!

The meals are free for all students who are 18 years of age and under. The meals will be provided twice a week – on Tuesdays and Thursdays – and are available for pickup from 10 am to 1 pm.

 

On Tuesdays, the meal pickup includes:

> 2 breakfast entrees

> 2 lunch entrees

> Juice, milk, fruits, vegetables, and assorted snacks

 

On Thursdays, the meal pickup includes:

> 3 breakfast entrees

> 3 lunch entrees

> Juice, milk, fruits, vegetables, and assorted snacks

Pickup locations can be found here. Just enter your zip code to find the nearest open school location!

During these unprecedented times, we need to support each other in any way that we can. If you know someone with children at JCPS, please feel free to share this article. Our kids are our number one priority, and every little bit helps!

All the best,

Tracy L. Hirsch

Louisville Bankruptcy Lawyer

Need a free consultation? Text or call me at (502) 435-2593!