Elyria OH Law Office

A Dedicated, Experienced Law Firm That Assists Clients in Exploring Affordable Debt Relief Options

Getting out of debt, even with hard work and sacrifice, can be challenging and difficult. Many life events can create financial hardships that make it tough to climb out of debt without assistance. One or two missed bills turn into a dozen or more missed bills, and it becomes impossible to catch up on the missed payments. There is hope. You can get out of debt and get a fresh start. 

The bankruptcy process is designed to help individuals overcome a debt problem. Through a Chapter 7 or Chapter 13 bankruptcy case, a debtor can eliminate debts he or she cannot pay. A bankruptcy case can also protect a debtor’s assets by preventing foreclosures, repossessions, and debt-collection lawsuits. 

Unemployment, sudden illness, divorce, accidents, or the death of a spouse can trigger a financial crisis that destroys your personal finances. You do not need to try to solve your financial problems alone. There are several debt relief options available. You just need an experienced bankruptcy attorney to provide guidance and support as you explore your options and choose the best debt relief option for your situation. 

Please contact Moseman Law for a consultation with a Elyria bankruptcy attorney. If you have questions about bankruptcy or want to talk to a friendly, compassionate attorney regarding options, call (440) 255-0832 or complete the contact form on our website.

Understanding the Difference Between Chapter 7 and Chapter 13 Bankruptcy

Consumers typically file under Chapter 7 or Chapter 13 of the Bankruptcy Code. While both chapters of bankruptcy get rid of debts, there are distinct differences.

Chapter 7 Bankruptcy Cases

A Chapter 7 bankruptcy case is designed for individuals who cannot afford to pay any portion of their unsecured debts. To be eligible for a bankruptcy discharge in Chapter 7, the debtor must meet financial requirements. 

A Means Test compares your income to the median income for the state. If your average income is below the state’s median income, you “pass” the Means Test and can proceed with the Chapter 7. If your income is above the state’s median income, you might still qualify to file bankruptcy under Chapter 7 if your disposable income is below a certain amount.

Most individuals who file a Chapter 7 bankruptcy case get rid of most, if not all, their unsecured debts and even discharge secured debt on assets they do not want to keep. They get to keep their property and income. 

However, if a debtor is behind on mortgage payments or car loan payments, the Chapter 7 case will not prevent secured creditors from seizing assets after the bankruptcy case is complete if the person does not catch up with the payments. If you are behind on mortgage or car payments, a Chapter 13 case might be a better option for you.

Chapter 13 Bankruptcy Cases

A Chapter 13 bankruptcy case is a repayment plan. In a three to five-year bankruptcy plan, you reorganize all or most of your debts into an affordable monthly payment. In most cases, debtors only pay a small percentage of their unsecured debt through the Chapter 13 plan. Past due mortgage payments can be spread out over time to allow you to keep your home and prevent foreclosure. Car loans are also included in the plan. In many cases, debtors reduce the number of their monthly car payments and sometimes reduce the amount owed to the secured lien holder.

Chapter 13 bankruptcy cases can stop foreclosure and stop repossessions. They can also give you time to pay certain debts that are not dischargeable in bankruptcy such as past-due domestic support payments and tax debts. A Chapter 13 repayment plan can also protect property that may have equity above the protections offered by bankruptcy exemptions. 

Are You Facing a Bankruptcy?

Filing a bankruptcy case can give you the debt relief you need. However, it is wise to seek experienced legal counsel before filing a Chapter 7 or Chapter 13 case. An attorney can review your financial situation, discuss your goals, and explain the various debt relief options available, including filing a bankruptcy case. Working with an attorney gives you the peace of mind of knowing that your case is prepared and filed correctly and that your decision to file for bankruptcy is right for you.

Contact an Elyria, Ohio Law Attorney Today

Heather Moseman is an experienced lawyer who assists individuals resolve debt problems and overcome financial hardships. You can reach Attorney Moseman by calling (440) 255-0832 or by completing the contact form on our website.