What is Bankruptcy Bypass? Do I qualify?

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Since 2009, Legal Aid has helped seniors and persons with disabilities deal with harassing creditors through the Bankruptcy By-Pass Program. Volunteer attorneys, through the Cleveland Metropolitan Bar Association, assess clients’ ability to pay creditors. This program advises creditors that the harassing calls and letters must stop once the volunteers determine the client is “judgment proof.”

To be “judgment proof” means that the law will not allow the person’s income to be garnished or attached. There are many types of income that cannot be attached, or taken out of a bank account by a creditor that has gone to court and gotten a judgment against that person. Some common sources of protected income include social security, SSI, and veterans’ benefits. People helped by this program do not own any homes and are not likely to work again. They also own personal property, like furniture, clothing and cars that cannot be taken by creditors because of the value of the items.

People who seek help through this program often believe that the only option to stop the creditors’ harassing phone calls is to file bankruptcy. However, bankruptcy is not always the best choice. People can only file a personal bankruptcy once every eight years. Clients in this program are not at risk of having their money or assets taken by creditors. Because of this, volunteer attorneys will advise clients about the benefits of not using their right to file bankruptcy.

Since the program began, volunteers have helped over 100 people. Many clients comment that it feels as if a weight is lifted once the harassment stops. Creditors often give people wrong information about what funds a creditor can collect. Many people fear they will be charged criminally for not paying bills. As a result, they still try to make payments to credit card companies but cannot pay more than the interest fees. The By-Pass program will help clients sort out what expenses need to be paid each month including rent, utilities and medical costs.

If you think this program can help you, please call Legal Aid’s intake line at 216-687-1900 or 1-888-817-3777. You will be asked a number of questions to find out if the By-Pass program can help you. If it cannot, Legal Aid may still be able to assist you.

This FAQ was written by Lauren Gilbride, Esq. and appeared as a story in Volume 28, Issue  2 of “The Alert” – a newsletter for seniors published by Legal Aid. Click here to read the full issue.

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