Finding a Bankruptcy Attorney: Cleveland Heights Ohio
Bankruptcy is one of the few legal proceedings you can complete, start to finish, all on your own. That doesn’t mean it's wise to do so. In fact, if you don't understand the bankruptcy laws of your state, it's very likely you will miss out on important exemptions that can completely transform the outcome of your case.
For those just beginning on their bankruptcy journey, finding information on the internet can be overwhelming. Keep reading below to find out some of the basics to help you decide if bankruptcy is right for you.
Know Your Options
Filing for bankruptcy is not a one-size-fits-all proceeding. There are several types available and each has their own set of eligibility requirements ranging from means tests to corporate standing.
There are two types of bankruptcy for individuals— a class of filings called consumer bankruptcy. The two most common types of proceedings in the United States fall into this category: Chapter 7 and Chapter 13. While each has their pros and cons, it's ultimately up to you and your lawyer to decide which is best for your financial situation.
Chapter 7 Bankruptcy
Under Chapter 7 bankruptcy, you get a “fresh start,” but it comes at a price. Known as a liquidation plan, this type of bankruptcy seeks to pay back your creditors with the value of your current assets or forgive amounts of your debt entirely. This is particularly useful if much of your debt is unsecured, such as medical debt, credit cards, and utility payments.
To qualify for this kind of radical debt relief, the state of Ohio must be certain that you genuinely do not have the means to repay what you own. This is done through a means test. This determines that your financial standing is below that of other households with similar features.
The unfortunate lasting side effect of Chapter 7 is the impact on your credit score. Often, individuals will have this filing on their record for 10 years.
Chapter 13 Bankruptcy
Known as a wage earner’s plan, this chapter aims to restructure your debt, not necessarily forgive it completely. As the name suggests, this plan is built for individuals earning a steady wage that would allow them to maintain regular Chapter 13 payments as they slowly pay down their creditors.
Generally, this repayment plan lasts 3-5 years and allows individuals to keep many of their assets, such as their home. As the debt is eventually repaid, this Chapter does not have as lasting of an impact on your credit score-- lasting on average for 5 to 7 years total.
Will I Lose Everything?
We have all heard horror stories of families who lost everything to bankruptcy. This does not have to be you. In fact, it's very unlikely this will even happen.
The Courts know that sometimes people suffer from unexpected financial hurdles. Bankruptcy is made to help you, not to punish you, for needing debt relief. As such, there are several classes of exemptions that you can take advantage of in either type of consumer bankruptcy.
While the following is not a complete list of what you may qualify for, they represent the most common categories of interest for individuals:
$145,425 in home equity of you place of residence is qualified for a homestead exemption
- Personal Property
There are several divisions of personal property and each has their own exemption amount. Those which are of most concern to bankruptcy filers are the $13,400 household goods exemption, $,1,700 jewelry exemption, and the $4,000 motor vehicle exemption.
Wages are exempt, but only to a point. The current standard is that either 30 times the minimum federal hourly wage or 75% of your disposable income is exempt. Whichever is greater is the exemption that takes precedence.
In this category you will find IRAs, Roth IRAs, private pensions, and tax exempt retirement accounts such as 401(k), 403(b), and profit-sharing.
As you can see, assets, even real estate, can potentially be saved even after going through the bankruptcy process.
Should I File for Bankruptcy?
Filing for bankruptcy is a big step that has a lasting effect on your creditworthiness. While the debt relief might be necessary, it's important to be aware that you will likely have troubles finding a home to rent, securing a loan, or opening a line of credit for the foreseeable future.
For many, the following are signs that their debt has grown more than they can manage:
- Their house is “upside down” and they are unable to maintain payments
- Creditors have sued you and are garnishing your wages
- Your credit card debt is unmanageable
- You have a large amount of medical debt which is not covered by insurance
If any of these ring true for you, remember that a good bankruptcy lawyer will give you legal advice to help make the final decision about whether or not there are other debt management options available.
An Expert in Cleveland Bankruptcy
Making sure your finances are in good hands is the most important part or your bankruptcy case. Having a bankruptcy law firm you know and trust will give you access to expertise, advice, and resources you would not be able to find anywhere else.
David Benson spearheaded his firm with the knowledge of over 20 years practicing law. These years were spent in diverse fields from oversight positions to client practice, getting a full view of law and how it can help everyday individuals take back control of their lives.
Looking to speak with someone about filing for Chapter 7 or 13? Contact us today and speak with a seasoned professional that can help point you in the right direction and understand the options available to you.
Benson Law Firm
Cleveland Heights Law Office
3473 Fairmount Blvd, 2nd Floor
Cleveland Heights, OH 44118
Phone: (216) 438-9023
While this website provides general information, it does not constitute legal advice. The best way to get guidance on your specific legal issue is to contact a lawyer. To schedule a meeting with an attorney, please call or complete the intake form below.
Here are some of the Ohio areas we service:
- Ohio City
- Slavic Village
- Kamms Corners
- East Cleveland
- Cleveland Heights
- St. Clair
- Garfield Heights
- Maple Heights
- University Circle
- and many more…
Cleveland, Ohio Bankruptcy Attorney