Serving all of Northeast Ohio

Bankruptcy as an Affordable Debt Elimination Option

Bankruptcy law was created to give individuals and businesses a way out of debt. You may believe your debt elimination options are limited. You might also believe that you cannot afford to file for bankruptcy relief or that you will lose everything if you file a bankruptcy case. In general, bankruptcy is one of the most affordable debt elimination options available for many people. Additionally, most people who file for bankruptcy relief keep all their property while getting out of debt. 

However, choosing to file a bankruptcy case is an important decision. One of the most important decisions when considering bankruptcy is which chapter of bankruptcy to file.

If you are ready to explore bankruptcy as a debt elimination option, contact Moseman Law for a consultation with a Wickliffe bankruptcy attorney. You can contact our office by calling (440) 255-0832 or complete the contact form on our website.

Is Chapter 7 Right for You?

A Chapter 7 bankruptcy case may be the best option for you to get out of debt quickly. In many cases, a bankruptcy discharge is granted about 90 days after the filing of a Chapter 7 bankruptcy petition, provided the case is a no-asset Chapter 7 case. Let’s discuss no-asset cases and the income requirements for Chapter 7 in more detail.

In a Chapter 7 case, the bankruptcy trustee may sell any assets that have non-exempt equity and use the funds to pay the creditors of the bankruptcy filer. That is the reason Chapter 7 is referred to as a liquidation bankruptcy. However, most cases filed in Ohio are no-asset Chapter 7 cases. Ohio enacted exemptions that protect a certain amount of equity in a debtor’s property. Most individuals do not have equity above the exemption amounts. 

In a few cases, a debtor may need to surrender a piece of property that has nonexempt equity or pay the bankruptcy trustee the amount of the non-exempt equity, but that is not the typical case. Your bankruptcy attorney carefully analyzes your situation to determine if any assets could be at risk in a Chapter 7 case.

There is also an income requirement in Chapter 7. Congress enacted a Means Test to measure your income against the average income of a household of your size in your county in Ohio. If your income exceeds the median income or if you have disposable income over a certain amount, you may not be eligible for a bankruptcy discharge under Chapter 7. However, you probably qualify to file for debt relief under Chapter 13.

Why Should I File A Chapter 13 Bankruptcy Case?

Your bankruptcy attorney might suggest you file a Chapter 13 bankruptcy case for several reasons. Chapter 13 can help you if you find yourself in any of the following situations:

  • Your income exceeds the income limits for a Chapter 7 case;
  • You have non-exempt equity in assets you would like to keep
  • You are behind on your mortgage payments or car payments; 
  • A creditor has filed a debt collection lawsuit, your wages may be garnished, or you owe taxes; or,
  • You have past-due alimony or child support payments.

There could be other reasons why a Chapter 13 bankruptcy case could be in your best interest. Our Wickliffe bankruptcy lawyer can explain in more detail after reviewing your unique financial situation.

In a Chapter 13 case, you make monthly payments to a bankruptcy trustee for three to five years. Even though you may need to pay some debts in full, most unsecured debts, such as credit card bills and medical bills, are only paid a small percentage of the amount that is owed. At the end of your Chapter 13 Plan, eligible debts are discharged, and you are not responsible for payment of the remaining balances on the account.

Are You Ready to Find Out If Bankruptcy Is Right for You?

The above descriptions of Chapter 7 and Chapter 13 are brief summaries. Our Wickliffe bankruptcy attorney can review your financial situation, apply applicable bankruptcy law to your situation, and discuss the pros and cons of bankruptcy with you during a consultation. We strongly recommend receiving experienced bankruptcy advice before you file your bankruptcy petition. 

Wickliffe Estate Planning Attorney 

Heather Moseman is an experienced lawyer with an office in Mentor, Ohio who can help in nearby cities such as Wickliffe. If you have bankruptcy questions or want to discuss a bankruptcy filing, contact our office by calling (440) 255-0832 or complete the contact form on our website.

Moseman Law Office

Moseman Law Office is a full-service legal firm located in Mentor, Ohio, serving nearby counties, and providing personalized legal solutions to its clients.

Contact Us

Moseman Law Office
6990 Lindsay Drive #2
Mentor, OH 44060
Phone: (440) 255-0832