Consumer Bankruptcy

Consumer bankruptcy, sometimes referred to as personal bankruptcy, is on the rise across the US. There are two main types: liquidation and reorganization. The COVID-19 pandemic, recent lay offs and business closings, rising repossession and foreclosure rates, and the financial uncertainty occurring right now have hit consumers from all income levels and economic backgrounds very hard.

An experienced and highly knowledgeable Cleveland consumer bankruptcy attorney will work closely with you to determine whether a Chapter 7 bankruptcy, a Chapter 13 bankruptcy, or another debt relief option is best considering your financial situation and specific circumstances.

One type of consumer bankruptcy is chapter 7 bankruptcy, and this falls in the liquidation category. In this situation any property that is exempt under state law is protected, and these exemptions are often more than enough to cover most or all of the property owned.

Any unsecured debt, such as credit card debt, medical bills, and even unsecured loans are wiped out with the chapter 7 bankruptcy discharge. The bankruptcy trustee will sell any property that is not exempt in order to pay off creditors in a process called liquidation.

With a chapter 7 case you do not need to show a regular income, and there is not usually a repayment plan involved. A Cleveland bankruptcy attorney who has considerable knowledge and experience in this legal specialty can help you determine whether a chapter 7 bankruptcy is the best choice in your specific financial situation.

A chapter 13 bankruptcy is also called a wage earner or reorganization case. This chapter of the bankruptcy code allows you to reorganize your finances and debts, and normally there is no liquidation involved with this type of case.

You keep all of your property unless you choose to surrender it, but any secured property must be paid or the property can be taken  and sold off secure the debt. Any remaining amount owed is normally discharged at the end of the chapter 13 case.

The value of any non exempt assets that you own must be paid to creditors, and the repayment plan is generally 3-5 years. Any discretionary income that you have will also need to be turned over to the bankruptcy trustee in order to pay creditors.

Chapter 13 bankruptcy typically requires a longer time and more attention, but if you have a regular income and do not qualify for a chapter 7 bankruptcy then this may be the right move for you and your finances.

Mounting medical bills, credit card debt, threats of foreclosure or repossession, high unemployment, COVID-19, and other factors all contribute to the growing number of people who need the debt relief that a chapter 7 or chapter 13 bankruptcy can provide in consumer bankruptcy.

The right Cleveland bankruptcy lawyer is critical for a successful outcome. The bankruptcy code is complex and extensive, and the process is extremely complicated. Even a small mistake or a minor omission can be costly, resulting in the case being dismissed or even preventing you from filing again in the future.

You need time to take stock of your financial situation and devise a plan. You need someone on your side, who will fight for your rights and brighter financial future without debt. Someone who knows the bankruptcy process and the local players very well, and who can navigate this system so that you get the desired outcome.

Call today for a free consultation, and see what Cleveland consumer bankruptcy attorney Susan M. Gray can do for you!

Sources:

Cara O’Neill, “ What is Bankruptcy.” Nolo.com https://www.nolo.com/legal-encyclopedia/chapter-7-13-bankruptcy-basics-29829.html  Accessed 21 July 2020.

Cara O’Neill, “ What Bankruptcy Can and Cannot Do.” Nolo.com https://www.nolo.com/legal-encyclopedia/chapter-7-13-bankruptcy-limits-benefits-30025.html Accessed 11 May 2020.