The good new is, most of the time there is no danger of losing your house in bankruptcy. In March of 2013, Ohio law was amended to allow each person filing bankruptcy to keep up to $125,000 in home equity, which is defined as the value of your home minus what you owe on it.

For instance, if you own a home that is worth $100,000 and you owe $80,000 on it, then you have $20,000 in home equity. This is not a problem in bankruptcy because it is well under the $125,000 limit. If a husband and wife file bankruptcy together and both of their names are on the house then the news is even better: The $125,000 limit can be doubled to $250,000.

The unfortunate truth is that most people filing for bankruptcy in Cleveland are well under this $125,000 number due to depressed home values and/or refinancing their home multiple times. Many people in Cleveland filing bankruptcy have refinanced their homes over and over in order to lower their monthly payments, which prevents them from accumulating any home equity. I have had clients who have been in their houses for 40 years or more yet have no home equity because of reasons like these.

When Should I Worry About Losing My Home in Bankruptcy?

Pretty much only when you put a very large payment on the house or have been paying on it for a long time. Furthermore, if you’ve got one of the best bankruptcy attorneys in Cleveland then what happens in court shouldn’t be a surprise.

When I deal with bankruptcy clients in Cleveland, I analyze all of my clients’ assets carefully to make sure they aren’t going to lose anything. If I think there is a potential issue I warn you of it, tell you what I think will happen, and have you sign a disclaimer that shows you understand the risks involved. 

Sometimes in borderline cases it is necessary to hire an appraiser ahead of time to find out just how much your house is worth so we don’t have to worry about any dispute over its true value.

How Do I Find a Bankruptcy Attorney in Cleveland?

The good news is, if you’re looking for either a Chapter 7 or Chapter 13 bankruptcy lawyer in Cleveland you already found one. In fact, if you’d like to discuss your personal situation give me a call at (216) 526-0309 and we can talk more about your situation. I’ll let you know whether or not you are going to keep your home and whether bankruptcy is a good option for you. I have no problem turning away clients if bankruptcy doesn’t make sense for them. In the end, I want my clients to be happy with every interaction we have, no matter whether they hire me or not.