Filing for bankruptcy can be a daunting prospect for individuals and families. The idea of losing control of one's finances is never attractive. Moreover, the idea of letting a trustee settle their debts and have access to their property makes many debtors ill at ease.
But loss of property is often only half the story, or may not be part of the story at all. Federal guidelines and Ohio state laws restrict what debtors in bankruptcy are compelled to give up to help settle accounts. A bankruptcy attorney may be able to help debtors address the following issues.
What property would I be expected to give up?
Any assets of significant value, such as stocks or collectibles, may be claimed by the trustee to raise funds to settle debts. Real estate or motor vehicles of high value may also be part of bankruptcy proceedings.
Which property is protected?
Ohio state law allows debtors in bankruptcies to retain real and personal property up to a value of $20,200. Wage garnishment is limited to 25 percent of wages. A vehicle under $3,225 in value may also be retained. Other items up to $10,725 in value may be kept as long as no one item is worth more than $575.
What if I have significant equity in my property?
Chapter 13 bankruptcy may be a better choice, since a debt repayment plan is created instead of significant forfeiture. This repayment plan pushes all of your debts together, reduces some and sets up monthly payments to the trustee appointed to oversee your bankruptcy proceedings.
Source: Credit.com, "Filing Bankruptcy: What You Need to Know About Chapter 7 vs. Chapter 11 vs. Chapter 13," Gerri Detweller, accessed Nov. 03, 2017