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Klosk Law Group, Inc is dedicated to assist the growing number of consumers suffering from unmanageable
debt.
Our organization specializes in the laws pertaining to unsecured debt, debt collection activity and credit reporting.
Using proven techniques and accomplished negotiating skills, Klosk Law Group, implements effective strategies to
help consumers resolve their debt challenges and begin the transition to financial independence.
About Us
Our Concept
Klosk Law Negotiation process has been tested and developed over years of experience by our
team of professionals in the field of finance and credit card debt. Our professionals are highly skilled
in each of their fields of expertise.
Through the established relationships that we have with the creditors and financial institutions, we
are able to successfully negotiate the debts of our clients at a substantial discount. Creditors are
willing to negotiate a debt with Klosk Law, on behalf of our clients, with the understanding that the
settled amount will be paid in a timely manner.
Furthermore, creditors are always looking to avoid the ineffective and costly efforts of an outside
collection company. Klosk Law continues to develop our relationships with creditors throughout the
country, and we always maintain a very professional and cooperative relationship with the creditors
in order to reach the most favorable settlement offer for our clients. We work directly, and 100% for
you.
Debt settlement is a legitimate way of solving your problem without the need for bankruptcy. Our
representatives work each case individually to determine your eligibility and then, if you qualify, they
will establish a program that allows repayment of the debt through affordable monthly payments.
For more information, complete the brief information form on the left side of this page. An Klosk Law
representative will contact you to discuss how to get started today. There is no cost or obligation.
Our Vision & Values
 To use our unrivalled experience and unique Debt Negotiation Process to get our Clients
back on their financial feet as soon as possible
 To ensure that our Customer Service continues to be rated #1 in the industry
 To be the best Debt Relief and Debt Assistance organization in America
 To keep the character of our business intact - real people will always be available to speak
with our clients about their issues
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To make the path to debt free living as stress free and comfortable as possible
To provide the highest quality of service and support at all times
Debt Options
Debt settlement is the most cost-effective, easiest option to pay off your debts and relieve you of
having to deal with creditors, collectors and attorneys. We understand the stress and struggle of
living with an overwhelming amount of debt, and our goal is to reduce and consolidate your debt so
that you can begin living the lifestyle you've been dreaming about…being debt free! If you're simply
paying minimum monthly payments, then surely it feels like you are spinning your wheels, getting
nowhere. Our program, through negotiation, will cut your debt down to about half of the total amount.
So, you end up paying only a fraction of the debt! Our program is custom-built for each clients
current personal and financial situation and level of debt in order to make the process as quick and
affordable for you.
Klosk Law negotiation process has been tested and developed over years of experience by our team
of professionals in the field of finance and credit card debt. Our professionals are highly skilled in
each of their fields of expertise. Through the established relationships that we have with the creditors
and financial institutions, we are able to successfully negotiate the debts of our clients at a
substantial discount. Creditors are willing to negotiate a debt with Klosk Law, on behalf of our clients,
with the understanding that the settled amount will be paid in a timely manner. Furthermore,
creditors are always looking to avoid the ineffective and costly efforts of an outside collection
company. Klosk Law continues to develop our relationships with creditors throughout the country,
and we always maintain a very professional and cooperative relationship with the creditors in order
to reach the most favorable settlement offer for our clients. We work directly, and 100% for you.
Debt settlement is a legitimate way of solving your problem without the need for bankruptcy. Our
representatives work each case individually to determine your eligibility and then, if you qualify, they
will establish a program that allows repayment of the debt through affordable monthly payments
while ultimately saving your credit. This approach reduces your debt vs. consolidation options. Our
approach assists you by reducing the time to repay the debt and by lowering the total amount you
owe.
For more information, complete our brief form for a free 10 minute evaluation. An Klosk Law
representative will contact you to discuss how to get started today. There is no cost or obligation.
The New Bankruptcy Law
Under the old rules, people who filed under Chapter 13 had to devote all of their disposable income
— what they had left after paying their actual living expenses — to their repayment plan. The new
law adds a wrinkle to this equation: Although Chapter 13 filers still have to hand over all of their
disposable income, they have to calculate their disposable income using allowed expense amounts
dictated by the IRS — not their actual expenses — if their income is higher than the median in their
state (see "Restricted Eligibility for Chapter 7," above). These expenses are often lower than actual
costs.
What's worse, these allowed expense amounts must be subtracted not from the filer's actual
earnings each month, but from the filer's average income during the six months before filing. This
means that debtors may be required to pay a much larger amount of "disposable income" into their
plan than they actually have to spare every month — which, in turn, means that many more Chapter
13 plans will fail.
Property Must Be Valued at Replacement Cost
Under the old law, Chapter 7 filers could value their property at what they could sell it for in a "fire
sale" or auction. This meant that used furniture, hobby items, cars, heirlooms, and other property a
debtor might want to keep were typically assumed to have little value — and, therefore, that it often
fell well within the "exempt property" categories offered by most states. (Exempt property is property
that cannot be taken by creditors or the trustee — you are entitled to keep it.)
Under the new law, you must value your property at what it would cost to replace it from a retail
vendor, taking into account the property's age and condition. This requirement is sure to jack up the
value of property, which means more debtors stand to have their property taken and sold by the
trustee.
Restricted Eligibility for Chapter 7
Under the old rules, most filers could choose the type of bankruptcy that seemed best for them —
and most chose Chapter 7 over Chapter 13. The new law will prohibit some filers with higher
incomes from using Chapter 7.
How High is Your Income?
Under the new rules, the first step in figuring out whether you can file for Chapter 7 is to measure
your "current monthly income" against the median income for a family of your size in your state. Your
"current monthly income" is not your income at the time you file, however: It is your average income
over the last six months before you file. For many people, particularly those who are filing for
bankruptcy because they recently lost a job, their "current monthly income" according to these rules
will be much more than they take in each month by the time they file for bankruptcy.
Once you've calculated your income, compare it to the median income for your state. (You can find
median income tables, by state and family size, at the website of the United States Trustee,
www.usdoj.gov/ust — Means Testing Information.)
If your income is less than or equal to the median, you can file for Chapter 7. If it is more than the
median, however, you must pass "the means test" — another requirement of the new law — in order
to file for Chapter 7.
The Means Test
The purpose of the means test is to figure out whether you have enough disposable income, after
subtracting certain allowed expenses and required debt payments, to make payments on a Chapter
13 plan.
To find out whether you pass the means test, you start with your "current monthly income,"
calculated as described above. From that amount, you subtract both of the following:


Certain allowed expenses, in amounts set by the IRS. Generally, you cannot subtract what
you actually spend for things like transportation, food, clothing, and so on; instead, you have
to use the limits the IRS imposes, which may be lower than the cost of living in your area.
Monthly payments you will have to make on secured and priority debts. Secured debts are
those for which the creditor is entitled to seize property if you don't pay (such as a mortgage
or car loan); priority debts are obligations that the law deems to be so important that they are
entitled to jump to the head of the repayment line. Typical priority debts include child support,
alimony, tax debts, and wages owed to employees.
If your total monthly disposable income after subtracting these amounts is less than $100, you pass
the means test, and will be allowed to file for Chapter 7. If your total remaining monthly disposable
income is more than $166.66, you have flunked the means test, and will be prohibited from using
Chapter 7. So what about those in the middle? They have to do some more math. If your remaining
monthly disposable income is between $100 and $166.66, you must figure out whether what you
have left over is enough to pay more than 25% of your unsecured, nonpriority debts (such as credit
card bills, student loans, medical bills, and so on) over a five-year period. If so, you flunk the means
test, and Chapter 7 won't be available to you. If not, you pass the means test, and Chapter 7
remains an option.
Requirements Eased for Hurricane Victims
Following Hurricanes Katrina and Rita, the United States Trustee's office announced special
enforcement guidelines for debtors affected by natural disasters. These guidelines are an effort to
lessen the impact of the new law on filers who may be displaced from their homes and personal
papers.
Among other things, these guidelines make the following changes for victims of natural disasters
who file for bankruptcy:
 Credit counseling will not be required.
 Debtors who cannot provide required documents due to a natural disaster will not face
enforcement actions.
 Trustees are to consider the income loss, increased expenses, and other effects of a natural
disaster as "special circumstances" that may allow a debtor who doesn't otherwise pass the
means test to qualify for Chapter 7.
 Trustees will provide alternate means for debtors to attend creditors' meetings, if necessary.
 For more on these rules, go to the website of the United States Trustee, www.usdoj.gov/ust,
and click "Enforcement Guidelines for Debtors Affected by Natural Disasters."
Lawyers May Be Harder to Find — and More Expensive
As you can see, the new law adds some complicated requirements to the field of bankruptcy. This is
going to make it more expensive — and time-consuming — for lawyers to represent clients in
bankruptcy cases, which means attorney fees are going to go up.
The new law also imposes some additional requirements on lawyers, chief among them that the
lawyer must personally vouch for the accuracy of all of the information their clients provide them.
This means attorneys will have to spend even more time on bankruptcy cases, and charge their
clients accordingly. Some experts predict that this combination of new requirements may drive some
bankruptcy lawyers out of the field altogether.
Some Chapter 13 Filers Will Have to Live on Less
Under the old rules, people who filed under Chapter 13 had to devote all of their disposable income
— what they had left after paying their actual living expenses — to their repayment plan. The new
law adds a wrinkle to this equation: Although Chapter 13 filers still have to hand over all of their
disposable income, they have to calculate their disposable income using allowed expense amounts
dictated by the IRS — not their actual expenses — if their income is higher than the median in their
state (see "Restricted Eligibility for Chapter 7," above). These expenses are often lower than actual
costs. What's worse, these allowed expense amounts must be subtracted not from the filer's actual
earnings each month, but from the filer's average income during the six months before filing. This
means that debtors may be required to pay a much larger amount of "disposable income" into their
plan than they actually have to spare every month — which, in turn, means that many more Chapter
13 plans will fail.
Property Must Be Valued at Replacement Cost
Under the old law, Chapter 7 filers could value their property at what they could sell it for in a "fire
sale" or auction. This meant that used furniture, hobby items, cars, heirlooms, and other property a
debtor might want to keep were typically assumed to have little value — and, therefore, that it often
fell well within the "exempt property" categories offered by most states. (Exempt property is property
that cannot be taken by creditors or the trustee — you are entitled to keep it.)
Under the new law, you must value your property at what it would cost to replace it from a retail
vendor, taking into account the property's age and condition. This requirement is sure to jack up the
value of property, which means more debtors stand to have their property taken and sold by the
trustee.
State Exemptions Aren't Available to Recent State Residents
Under the old bankruptcy law, the personal property debtors were allowed to keep in Chapter 7
bankruptcy was determined by the laws of the state where they lived (as long as they lived there for
at least three months). Under the new law, you must live in a state for at least two years prior to filing
in order to use that state's exemption laws. Otherwise, you must use the exemptions available in the
state where you used to live. Similar rules apply to homestead exemptions, which determine how
much equity in a home you can keep when filing for Chapter 7 bankruptcy. However, to use your
new state's homestead exemption, you must live there for at least 40 months.
Because exemption amounts vary widely from state to state, these new residency requirements
could make a big difference in the amount of property you get to hold on to. For example, if you
recently moved from California to Nevada and you have a fairly valuable car, you might want to wait
to file for Chapter 7: Once you've been in Nevada for two years, you can claim its $15,000
exemption for motor vehicles. If you have to use California's exemptions, you can keep only $2,300
worth of equity.
Do Nothing About Your Debt
When you are in a struggle to make minimum payments on your unsecured debt, you must look at
all your options to determine which option is going to free up your cash flow problem.
Pay Back
Debt Amount
(Including Principle & Interest)
How Long Will It Take
$10,000
$26,276.59
42 yrs 9 mos
$15,000
$55,370.41
48 yrs 11 mos
$20,000
$74,464.22
53 yrs 3 mos
$25,000
$93,557.98
56 yrs 7 mos
$30,000
$112,651.77
59 yrs 4 mos
$35,000
$131,745.58
61 yrs 8 mos
$40,000
$150,839.39
63 yrs 9 mos
$45,000
$169,933.22
65 yrs 6 mos
$50,000
$189,027.02
67 yrs 1 mos
$60,000
$227,214.61
69 yrs 10 mos
$70,000
$265,402.22
72 yrs 2 mos
$80,000
$303,589.81
74 yrs 2 mos
$90,000
$341,777.43
76 yrs
$100,000
$379,965.06
77 yrs 7 mos
$110,000
$418,152.62
79 yrs
$120,000
$456,340.27
80 yrs 4 mos
$130,000
$494,527.82
81 yrs 6 mos
$140,000
$532,712.48
82 yrs 8 mos
$150,000
$570,903.04
83 yrs 8 mos
Number of years to pay off a credit card balance based on 19% interest and a minimum monthly of 2.1% of the outstanding balance. Most cards require a
minimum monthly payment between 2.0% and 2.4% of the outstanding balance.
Source: CNN Money
Credit Counseling
What is Credit Counseling?
Many universities, military bases, credit unions and housing authorities operate nonprofit financial
counseling programs. Some charge a fee for their services. Creditors may be willing to accept
reduced payments if you are working with a reputable program to create a debt repayment plan.
However, credit counseling organizations have faced scrutiny because of their misuse as a
"nonprofit" organization. Because an organization says it is a "non profit," there is no guarantee that
the services provided are free, affordable, or even legitimate. In fact, some credit counseling
organizations charge high hidden fees, or even urge consumers to make voluntary contributions that
can cause more debt.
Most credit counselors offer services through local offices, the Internet, or on the telephone. If
possible, find an organization that offers in-person counseling. Your financial institution, local
consumer protection agency, and friends and family also may be good sources of information and
referrals.
Be wary of credit counseling organizations that:
 Charge high up-front or monthly fees for enrolling in their program.
 Pressure you to make "voluntary contributions," which is another name for fees.
 Refuse to send you free information about the services they provide without requiring you to
provide personal financial information, such as credit card account numbers, and balances.
 Try to enroll you in a debt management plan (DMP) without spending time reviewing your
financial situation.
 Offer to enroll you in a DMP without teaching you budgeting and money management skills.
 Demand that you make payments into a DMP before your creditors have accepted you into
the program
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