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bankruptcy in Ohio

Filing For Bankruptcy in Ohio

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If your financial situation has reached a point where you don’t think you’ll ever get out of debt, it may be time to consider relief under the US Bankruptcy Code. Statistics indicate you’re not alone, as 772,646 individuals and businesses filed for bankruptcy in 2019. There are plenty of others that share your desire to gain control over your finances, ease your debt, and make a fresh start. 

Still, it’s understandable that you might be intimidated by the bankruptcy process. Taking legal action, especially one that has consequences for your future can seem overwhelming. Your concerns are likely alleviated when you consider the alternative: Remaining under crushing debt, incurring exorbitant late charges and interest, creditor harassment, and never even coming close to paying down your balances. While you should discuss the specifics with an Ohio bankruptcy attorney, here are a few facts you need to know about the process.

There Are Multiple Types of Bankruptcy to Consider

Based upon your situation and strict eligibility rules imposed by federal law, you might consider one of three forms of bankruptcy:

  1. Chapter 7: Individuals and businesses may qualify to file bankruptcy under Chapter 7, in which the court’s trustee sells some of your property and applies it to your debts. The end result is that you emerge debt-free.
  2. Chapter 13: This form of bankruptcy involves paying down your debt to creditors over time since you’ll work with the court to develop a repayment plan. A typical repayment plan is 3-5 years in duration, but your debt is wiped out at the conclusion of the process.
  3. Chapter 11: If you own a business and are in debt, you might opt for Chapter 11. The process is similar to Chapter 13, so you’ll work out a repayment plan to reimburse creditors.

You Need to Participate in Credit Counseling Before Filing

Most filers must go through credit counseling within six months before initiating the process, and some will also need to complete a course while the case is pending. The point is to ensure bankruptcy is the right fit for your situation and to reduce the possibility that you’ll have to file a second time down the road.

Filing for Bankruptcy Triggers an Automatic Stay on Collection

One of the primary advantages of initiating bankruptcy proceedings is that the court immediately imposes a stay on creditor efforts to collect on your debt. They cannot contact you, garnish your wages, place a lien on the property, or engage in any other prohibited conduct.

A Toledo, OH Bankruptcy Lawyer Can Help You Navigate the Process

This overview of bankruptcy basics may be helpful, but it should also convince you of the importance of retaining knowledgeable legal counsel to assist with the process. To learn more about how we can help, please contact Groth & Associates. You can set up a consultation by calling 419.482.1176 or visiting our website. Once we review your circumstances, our attorneys can advise you on your options and strategies for the bankruptcy process.

Chapter 7 or Chapter 13 Bankruptcy?

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There are many different kinds of bankruptcy, each with a different purpose: Chapter 11 for individuals or corporations with high debt, Chapter 12 for family farmers and fishermen, Chapter 9 for municipalities, and so forth. However, for most people, the choice when considering bankruptcy is whether to choose a Chapter 7 or a Chapter 13. So what is the difference between the two?

Chapter 7 Bankruptcy

A Chapter 7 is sometimes called “liquidation” or “total” bankruptcy, although neither of those terms is accurate. It usually lasts (3) to (4) months, and discharges—or, eliminates the obligation for—any debt that can be discharged, such as medical debt, or most credit card debt. A person can only file one Chapter 7 every (8) years, calculated as filing date to filing date. If you have filed a Chapter 7 within (8) years and find yourself needing to file bankruptcy again, a Chapter 13 may be an option for you.

Additionally, one must qualify for a Chapter 7 bankruptcy by being under a certain income limit. This calculation is called the Means Test, and is done by taking a person’s gross income from all sources (except social security), comparing it against the median in your state for your family size. If you are under that limit, you automatically qualify for a Chapter 7. If you are over, you may still qualify, but you would need an attorney to calculate the second part of the Means Test to see if you might qualify.

Chapter 13 Bankruptcy

A Chapter 13 is a reorganization of your debt. There is a “plan payment” associated with a Chapter 13 bankruptcy, and is intended to be both affordable, but also to pay what must be paid in the bankruptcy. A Chapter 13 lasts at least (3) and no more than (5) years.

People choose a Chapter 13 for various reasons, including:

  • Catching up on mortgage payments;
  • Repaying tax debt;
  • Getting current on child or spousal support payments;
  • Needing bankruptcy relief but not qualified for Chapter 7;
  • A personal preference to repay a portion of the debts owed.

Contact a Toledo Bankruptcy Attorney Today

If you are struggling with your debt, don’t lose hope. The expert bankruptcy lawyers at Groth & Associates are here to help you get your financial life back in order. Call us today for a free consultation to discuss what your options are.

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