Your Toolkit For A Fresh Start: A Guide From Your Cleveland Bankruptcy Lawyer

This page provides clear explanations, useful tools and key information to empower you on your journey toward a fresh financial start.

Bankruptcy Glossary

Understanding the following terms can help you feel more confident about the process.

• Automatic stay: A court order that immediately stops creditors from calling you, suing you or trying to collect a debt.
• Chapter 7: A type of bankruptcy that can eliminate most of your unsecured debts, like credit card and medical bills. This is a common choice for people with limited income.
• Chapter 13: A type of bankruptcy where you set up a repayment plan to catch up on missed payments and pay off a portion of your debts. This helps you keep assets like your house or car.
• Creditor: A person or company to whom you owe money.
• Debtor: The person who files for bankruptcy and owes money to creditors.
• Discharge: A legal term for a court order that releases you from the obligation to pay most of your debts.
• Means test: A formula that determines if your income is low enough to qualify for a Chapter 7 bankruptcy.
• Secured debt: A debt tied to a specific asset, such as a mortgage (for your house) or a car loan (for your vehicle).
• Unsecured debt: A debt not tied to a specific asset, such as credit card debt or medical bills.

Despite this foundational knowledge, consulting an experienced bankruptcy attorney is the most effective initial step.

Preparing To Meet With Your Bankruptcy Attorney

To make your consultation as productive as possible, we recommend you prepare the following information. Having these documents ready will help us provide the most accurate advice.

• Recent pay stubs
• Your last two years of tax returns
• A list of all your debts and creditors (including account numbers and balances)
• A list of all your assets (including real estate, vehicles and bank accounts)
• Your monthly household expenses
• Any lawsuits, wage garnishments or foreclosure notices you have received
• Identification documents

Even if you don’t have everything, an attorney can help you determine the best path forward.

The Bankruptcy Abuse Prevention And Consumer Protection Act Of 2005

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was a major overhaul of U.S. bankruptcy law aimed at preventing what some perceived as abuse of the system. While most people in financial distress still qualify for bankruptcy protection, the law introduced several changes that affect the process.

Here are the key changes from BAPCPA:

• Credit counseling: Nearly all individuals must now complete a mandatory credit counseling course within 180 days before filing for bankruptcy. This is meant to help filers explore alternatives to bankruptcy, though it’s often a quick, low-cost requirement.
• The means test: This is one of the most significant changes. The means test is a formula that determines if a debtor’s income is too high to qualify for a Chapter 7. It compares your income to your state’s median and factors in expenses to decide if you have enough disposable income to repay a portion of your debts. If you don’t pass, you’re encouraged to file under Chapter 13 instead.
• Increased costs: BAPCPA raised filing fees for both Chapter 7 and Chapter 13. The more complex legal work required under the new law can also lead to higher legal fees.
• Attorney liability: The law places new responsibilities on bankruptcy attorneys. They must now personally certify the accuracy of the information provided by their clients and conduct a “reasonable inquiry” into the case.
• Changes to the automatic stay: The automatic stay, which stops all collection activity, now has new exceptions. For example, it may no longer apply to eviction actions or certain family law matters like child support.

Given the complexities of these changes, having a qualified attorney to guide you through the process is more important than ever.

Essential Tools For Your Financial Journey

Understanding your financial situation is the first step. Creating a detailed budget showing all of your income sources and monthly expenses will help you see where your money is going and what solutions might work best for you.

• Budget worksheet: Use this to create a detailed budget showing all your income and monthly expenses, including housing, food, transportation and debt payments.
• Creditor contact log: If you are being harassed by creditors, it’s helpful to keep a detailed log of their calls and communications. Record the date, time, name of the caller, company they represent and what they said. This log can be valuable if you need to report violations of the Fair Debt Collection Practices Act.

These tools can empower you to take an active role in managing your debt and preparing for your legal consultation.

Request Your Free Consultation Today

Now that you’ve prepared with these tools, you are ready to take the next step toward a fresh financial future. Contact our office for a free initial consultation to discuss your options. Our bankruptcy attorneys can help you understand your unique situation and the best path forward.

Call us at 423-219-3299 or fill out our online form to get started.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.