Mentor Bankruptcy Lawyer
serving all northeast
Are you considering bankruptcy but aren’t sure of what all your options are? Do you have questions about the difference between Chapter 7 and Chapter 13, and which option is best for your situation? Moseman Law Office is here to help. Our attorneys are experts in US bankruptcy laws and will work with you to understand your current and long-term needs, help you get out of debt, and establish a strong path forward for your financial well-being.
You may have heard of the two types of bankruptcy for consumer-based debts established by the United States Bankruptcy Code, Chapter 7 and Chapter 13. There are benefits to each option, and working with a bankruptcy attorney can help you determine which one is best for you.
When you work with Moseman Law Office, one of our attorneys will complete a personalized consultation to determine which option is best for your financial situation and provide detailed solutions to get you on a path to financial freedom.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is the most commonly filed type of bankruptcy and is sometimes called liquidation bankruptcy because it can eliminate nearly all your debts. The exceptions are any assets that are not exempt under the State of Ohio’s exemption laws, which you may have to buy back from the court or surrender to be used to pay your creditors.
When filing for Chapter 7 bankruptcy, all debts, including credit cards, medical bills, personal loans, payday loans, and liability on repossessed and foreclosed upon property, are eliminated. Some debts, such as taxes, student loans, and spousal/child support, are exempt and will not be eliminated.
As a part of filing for Chapter 7 bankruptcy, you must provide a list of all current assets and debts, even if you plan to keep the item you owe the debt on. For example, if you owe debt on a car or house, you can keep it as long as you continue to make payments on it. If you do not plan to keep the item, the asset will be repossessed or foreclosed on, and you will no longer be liable for the debt or required to make payments towards it.
Is Chapter 7 Bankruptcy Right for You?
When deciding if Chapter 7 bankruptcy is right for you, there are multiple factors to consider, including the type of assets you have, your household income, and the type of relief you may need.
The Bankruptcy Code provides a maximum income based on household size that the filer must maintain to quality for Chapter 7 Bankruptcy. If your household exceeds this amount, you must file for Chapter 13 bankruptcy. Additionally, if you have non-exempt assets that will not be eliminated via Chapter 7, Chapter 13 may be a better option. The laws around exemptions and the equity associated with them can be complicated, so it is best to work with an attorney to avoid a denial of discharge and the indefinite responsibility of your debts.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is less common than Chapter 7 and is sometimes referred to as a restructuring debt. Chapter 13 starts with a gross income-based analysis, as a gross household income that exceeds the amount to qualify for Chapter 7 is considered to be abusing bankruptcy laws if they do not file Chapter 13.
Additionally, an analysis should be performed to determine if any non-exempt assets would be protected by filing for Chapter 13 over Chapter 7 bankruptcy and find out which assets the filer plans to retain, especially if they are behind on payments. The continued gross income should also be considered, and if it will be consistent, Chapter 13 bankruptcy should be filed. If the filer anticipates a dip in household income, it may be better to wait to file for Chapter 7 bankruptcy.
Is Chapter 13 Bankruptcy Right for You?
Chapter 13 bankruptcy can be a good option if you have non-exempt debts or need additional options for debt reduction that are not available by filing for Chapter 7 bankruptcy. It provides additional ways to pay back non-dischargeable debts to avoid a foreclosure or repossession and retain the asset.
Work With Experienced Bankruptcy Attorneys at Moseman Law Office
Bankruptcy is a complicated and taxing process. Working with an experienced bankruptcy attorney will not only take the stress of paperwork and filing court documents off your shoulders but also provide you with confidence that you are making the best decisions for your finances and future. Contact Moseman Law Office today to get started with one of our experienced attorneys.
We are a debt relief agency.
Moseman Law Office, LLC
Moseman Law Office, LLC is a full-service legal firm located in Mentor, Ohio, serving all of Northeast Ohio and providing personalized legal solutions to its clients.
Moseman Law Office, LLC
8500 Station St., Ste 210
Mentor, OH 44060
Phone: (440) 255-0832