Bankruptcy is often a viable option for people who are buried in debt and need a fresh financial start. However, some may hesitate to consult a bankruptcy lawyer because they’re concerned about losing their hard-earned retirement savings. Fortunately, in most cases, those who file for bankruptcy can keep their retirement accounts.
Thanks to bankruptcy law reforms passed in 2005, almost all pension plan funds and retirement accounts are exempt. This means that they cannot be used to pay back creditors if you file for a Chapter 7 bankruptcy. And if you file for a Chapter 13 bankruptcy, having these assets will not affect the amount you must repay your creditors because they are exempt assets. As an added bonus, the entire amount of any exempt retirement accounts are out of reach of creditors. However, there are a few exceptions, including Roth IRAs and traditional IRAs.
The bankruptcy lawyers of Cutler & Associates, Ltd. look forward to meeting you and answering your questions regarding exempt assets and other aspects of filing for bankruptcy. You can schedule an appointment at our offices in Aurora or Schaumburg by calling (847) 505-0380.
Credit card debt is particularly damaging to one’s financial health because of the typically high interest rates and excessive fees. In fact, high amounts of credit card debt are a common reason why people decide to file for bankruptcy. When you watch this video, you’ll hear the story of Mary Hunt. For over a decade, she buried herself in credit card debt by going on frequent shopping sprees.
Now debt-free, Hunt is a professional speaker who seeks to inspire others to improve their financial health. She offers some wise tips to individuals interested in breaking free of debt. However, for some, bankruptcy may still be the ideal solution.
If you’re curious whether filing for bankruptcy might be right for you, consider scheduling a consultation with the bankruptcy attorneys at Cutler & Associates, Ltd. Residents throughout Aurora and Schaumburg can call us at (847) 505-0380.
It can be challenging to determine whether Chapter 7 or Chapter 13 bankruptcy might be best for you. Consider meeting with an experienced bankruptcy attorney to discuss what each type of bankruptcy filing entails. While a Chapter 7 bankruptcy may seem ideal because it involves the quick discharge of many types of debt, it may not be right for everyone.
When You Do Not Pass the Means Test
Chapter 7 bankruptcy may not be an option for you if you do not meet the eligibility requirements. To file for Chapter 7 bankruptcy, your income must pass the means test. To pass, your income must fall below the established median level of income for your particular area. The means test also assesses the financial status of those whose income is above this level. This involves evaluating whether you have enough disposable income to pay your creditors during a repayment period. Your disposable income is the money that is left after you pay your allowed expenses. Your total financial status will determine whether you are eligible to file for Chapter 7 bankruptcy.
When You Have Non-Dischargeable Debts
Even if you do qualify for Chapter 7, it may not be in your best interests. If your debt consists primarily of non-dischargeable debts that will not be eliminated in a Chapter 7 filing, then Chapter 13 may be best for you. These non-dischargeable debts include child support, alimony, income taxes, student loans, and court judgments.
When You Have Nonexempt Property
During Chapter 7 bankruptcy, the bankruptcy trustee will evaluate your property to determine what may be sold to pay your creditors. Exempt property cannot be sold, such as your car and equity in your home. If you have a substantial amount of nonexempt property, your bankruptcy attorney may advise you to file for Chapter 13 bankruptcy. Nonexempt property includes family heirlooms, valuable collections, and investments.
Let the bankruptcy attorneys at Cutler & Associates, Ltd. help you decide of Chapter 7 or Chapter 13 bankruptcy is right for you. During your free consultation, we’ll explain the ins and outs of each type of bankruptcy, and discuss your best legal options. Those in the Schaumburg and Aurora areas can get in touch with our bankruptcy law firm by calling (847) 505-0380.
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