Some people believe that when they file for bankruptcy, they will forfeit their assets to the court to be sold and paid to their creditors. For the most part, people that file bankruptcy get to keep all of their assets either because of the exemption laws or the type of bankruptcy they file.
Many people that have significant assets file for bankruptcy as a way for you to protect their possessions from being taken away. Bankruptcy is more about protecting the things you have than having them seized by their creditors.
Both the state and federal bankruptcy laws have exemptions you can claim to keep your belongings. Your lawyer will help you choose which set of rules will be the best for your situation. You cannot pick and choose from each list, you must decide on either the federal or your state’s exemptions.
You don’t have to be penniless to pass the means test for Chapter 7. Your states median income is the standard that your income will be based on. Also taking into consideration your debt, family size, monthly living expenses, any court-ordered payments you make such as alimony and child support.
If you make more money than your states average, you will still be able to file bankruptcy, but it will be converted to a Chapter 13 bankruptcy. Your income, debt, and monthly living expenses will be used to determine what amount of disposable income you have to make repayments to your creditors. At the end of the predetermined payment period, any qualifying debt will be eliminated.
If you worry you have too much income to file for bankruptcy, contact a Columbus bankruptcy attorney to discuss your options.