Vance P. Truman, Attorney at Law
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Medina Bankruptcy Law Blog

Worried about your assets in bankruptcy? Relax

One of the most distressing things about Chapter 7 is the idea that you might have to get rid of your assets and other possessions. After all, Chapter 7 is called "liquidation" for a reason -- you'll need to sell many of your assets to and pay back your creditors with the proceeds. However, it's vital to remember that you won't need to sell all of your assets.

Indeed, the process is not meant to leave you on the street without the clothes on your back or the things you need to survive. Chapter 7 liquidation filers will benefit from various exemptions. Barring certain limitations for items of high value, you be able to keep the following in your bankruptcy process:

  • Your primary vehicle
  • A certain amount of the equity in your home
  • Your clothing
  • Certain jewelry items
  • Home appliances
  • Pension and retirement funds
  • Tools you need for your profession
  • Reasonable household furniture and goods
  • Part of the unpaid wages you're owed.
  • Public benefits like Social Security payments, unemployment compensation and welfare assistance, including this money that may have accumulated in your bank account.
  • Damages related to personal injury payments.

Could bankruptcy actually help with foreclosure proceedings?

Falling behind on your bills can impact your credit. Falling behind on your mortgage can impact your ability to remain a homeowner. Regardless of why you find yourself struggling to make your mortgage payment, your bank will likely only give you so much leeway before they start taking action. Efforts to collect on that debt could include foreclosure on your property.

For those who have fallen behind on their mortgage but who believe they can maintain payments in the future, bankruptcy may help them avoid the loss of their home.

Can I ever recover financially after Chapter 7 Bankruptcy?

One of the most common fears that keeps people with overwhelming debt from filing for bankruptcy is worrying that they may never recover financially. It is plain to see why so many people share this fear, but bankruptcy is intended to give debtors the tools they need to rebuild a firm financial foundation, not keep them from recovering.

Often, this fear stems from misunderstandings about the bankruptcy process itself and how long lenders penalize people who use bankruptcy. These penalties and restrictions on borrowing are the trade-off for discharging unsustainable debt. In the eyes of the law, borrowers who use bankruptcy may take the opportunity to wipe their financial slate clean, in exchange for agreeing to live with some borrowing restrictions for a period of time.

Why is Chapter 13 bankruptcy called a wage earner's plan?

Bankruptcy is a means by which overwhelmed individuals and businesses can seek financial forgiveness. In order to protect the interests of companies that extend credit, the federal government has certain rules and restrictions in place regarding bankruptcy.

Chapter 7 bankruptcy, which offers a discharge of unsecured debt has strict caps on income levels and the value of total assets owned. Chapter 13 bankruptcy, on the other hand, is available to anyone with overwhelming debt, regardless of the total value of their assets or their current income.

Don't be afraid of the 'means test' for Chapter 7

One of the most frequent concerns that we hear from consumers who are overwhelmed with debt but frightened about the prospect of bankruptcy is, "I'm worried that I have too much money to qualify."

What they're really worried is that they won't pass the "means test" that's part of the Chapter 7 process. Essentially, the means test determines who can qualify for that particular form of debt relief -- and who can't. However, is it really that difficult to pass?

Suze Orman backtracks on own advice

If you've ever followed finance guru Suze Orman, you know that she always steers people away from taking out loans against their retirement accounts. Well, hold on to your hat, because Orman is advocating just that for desperate furloughed workers who are running out of fiscal options.

With the government shutdown edging into a month, Orman stated on a recent episode of the Women and Money podcast that for "the first time in the history of [her] . . . career" she is suggesting doing just that. She added that those without "money to pay . . . bills . . . or feed [their] children, [they] might want to consider taking a loan from [their] retirement account."

Furloughed workers may have debt relief options

This week, approximately 800,000 furloughed government workers missed the first of what could potentially be multiple paychecks until the government reopens. For many of these individuals and their families, it spells nothing short of utter disaster.

What's worse is that back pay for workers isn't guaranteed, although in the past it has been customary. The Center for American Progress, an advocacy group that leans left of center, predicts that each pay period, those government employees who are impacted will lose roughly $2.2 billion.

Can I buy a house after filing for Chapter 7 bankruptcy?

Filing for bankruptcy is really an easy decision, especially for those who worry about the impact it may have on their future. Even people who are unfamiliar with the specifics of the process and how it works have probably heard about bankruptcies that cost the borrower everything and left them homeless. Fears about the consequences of filing may keep many borrowers who desperately need relief from getting the help they deserve.

One of the most common myths surrounding bankruptcy is that it makes financing a home impossible, if you do not already own one. It is true that borrowers take on significant restrictions around borrowing in return for debt discharge, but many people find that buying a home is still possible after a few years of building good financial habits.

Wage garnishment for student loans in Ohio: What you need to know

The human relations director at your work brings you a sealed envelope.

It's not a pink slip, but it also isn't good news: Your wages are being garnished because you stopped making the student loan payment you couldn't afford.

Don't fall for a debt consolidation loan racket

Most people don't have a clear understanding of exactly how debt consolidation loans work. Having this information can help you avoid ending up in a worse financial situation than you are in currently.

When a company provides a consumer with a debt consolidation loan, they're really buying your debt from your credit card companies and other creditors. This rolls your debt into one bill, which is sometimes lower -- with a lower interest rate -- than what you may have been paying on all of your credit cards together.

Get the debt relief you need, the personal attention you deserve.

Call us today for a free consultation at 330-591-4729, or fill out the form below, and we will contact you.

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Medina, OH 44256

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