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Bankruptcy

bankruptcy in ohio

What Debts Are Left after Bankruptcy in Ohio?

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Bankruptcy is an effective means of wiping out debt. But not all debts are eligible for “discharge” in the bankruptcy process. It is possible that you will remain several thousands of dollars in debt even going through bankruptcy. For this reason, it is important that you meet with a Toledo bankruptcy attorney to review your debts and determine which you can eliminate.

Secured Debts

Every secured debt has two parts—a debt you personally owe and a security agreement where you pledge collateral in the event you default. Technically, you can eliminate the personal debt in bankruptcy. However, you cannot get rid of the security agreement. Consequently, your creditor can still seize the collateral if you don’t pay—so it doesn’t make sense to say you can “eliminate” secured debts.

The most common secured debts are car loans and home mortgages. Many people hope to eliminate their mortgage in bankruptcy but keep their home, but that is not possible. Instead, you will need to reaffirm your loan, which means it survives bankruptcy. Otherwise, you can give up the collateral.

Child Support & Alimony Debts

If you fell behind on these domestic support obligations, you cannot eliminate them in bankruptcy. Any past-due payments are called “arrearages,” and you will still owe them even after the bankruptcy process. Congress identified these debts as “non-dischargeable” in 11 U.S.C. § 523(5).

Of course, you can still use bankruptcy to help with these debts. If you file Chapter 13, for example, you can spread out your arrearages over the course of your payment plan and avoid wage garnishment. But you can’t eliminate them.

Most Taxes

The government wants taxpayers to pay up, so the bankruptcy code makes most taxes non-dischargeable. You can’t get rid of them.

An exception exists for certain income taxes only. They must meet a long list of conditions, such as:

  • The taxes are more than 3 years old
  • You timely filed your returns or filed for the relevant tax year at least 2 years ago
  • You did not commit tax fraud or evasion
  • The IRS assessed the debt more than 240 days before you filed for bankruptcy

Payroll taxes and tax penalties are not eligible for discharge. Debtors must also realize they cannot eliminate a tax lien that is already in place. Instead, they will need to pay off the lien to get it removed.

Some Court Judgments

A court judgment against you is a debt you must repay. You can eliminate some court judgments in bankruptcy—but not all. For example, the code states that any penalty or judgment based on drunk driving is non-dischargeable.

With other court judgments, it depends on the actions your creditor takes. He or she would have to file an adversary proceeding with the court to object to the discharge. This might happen if your judgment is for an injury caused by fraud or malicious acts.

Student Loans

For now, student loans are difficult to eliminate in bankruptcy. Basically, you will need to show that paying them back is an “undue hardship” by showing the following:

  • You can’t maintain a minimal standard of living and pay your debts at the same time
  • This financial situation will exist for most of the repayment period
  • You have made a good faith effort to pay back the loans

For example, you might be disabled and unable to find full-time employment. If your loans eat up most of your disability check, then they are a hardship.

Let Us Review Your Debt

At Groth & Associates, we perform a full review of all debt to determine whether bankruptcy is right for you. Contact us today to schedule a free consultation.

bankruptcy in ohio

Common Myths About Bankruptcy

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If you are considering personal bankruptcy, you have probably started the process of researching Chapter 7 bankruptcy and Chapter 13 bankruptcy online, and you might have spoken with friends or family members about the process. While some preliminary research into the consumer bankruptcy process can be helpful for debtors who are thinking about filing for bankruptcy, it is important to remember that there is also a lot of misinformation available. Indeed, according to articles in NerdWallet and U.S. News & World Report, consumers encounter many different bankruptcy myths. We want to dispel some of those myths for you and help you to understand more clearly what you should expect when it comes to the consumer bankruptcy process in Ohio.

Common Myth #1: Your Credit Will Never Recover

Many people hear drastic warnings about the effects of personal bankruptcy, and they commonly hear that their credit will never recover and that they will never again be eligible to finance a motor vehicle or to obtain a credit card. To be clear, this is a myth. While your credit will not immediately bounce back after you receive a bankruptcy discharge, you can begin taking steps quickly to rebuild your credit and to remain on track with your finances. Often, applying for a retail credit card or a secured card is a good option because it is a bit easier to obtain these credit cards than others. Once you have a credit card again, you can begin rebuilding your credit by making charges and paying them off each month. After several months pass of timely payments, you can often be approved for a traditional credit card.

Common Myth #2: You Will Never Be Able to Get a Mortgage

Similar to the myth we just discussed your credit being ruined forever, it is a mistake to think that bankruptcy means you will not be able to apply for and be approved for a mortgage. Indeed, this is another common bankruptcy myth. While you will need to rebuild your credit after bankruptcy in order to be eligible for a mortgage again, there are certainly mortgage options available to those who have filed for consumer bankruptcy. In fact, many people file for Chapter 13 bankruptcy in order to stop a foreclosure and to get caught up with mortgage payments.

Common Myth #3: Student Loans Will Not Be Discharged in Bankruptcy

Many people hear that they cannot discharge student loans in Chapter 7 or Chapter 13 bankruptcy. We want to be clear in saying that this is a myth. Although it is more difficult to discharge student loans in bankruptcy than certain other types of debt like credit card or medical debt, you should know that student loans are indeed dischargeable in many bankruptcy cases.

Contact an Ohio Bankruptcy Attorney for Assistance

Are you considering personal bankruptcy in Ohio? We can dispel many common myths about consumer bankruptcy for you today, and we can answer any questions you have about the bankruptcy process. When you are ready to file, one of our experienced Toledo bankruptcy attorneys can represent you every step of the way. Contact Groth & Associates for more information about how we can assist you.

Filing for Bankruptcy in Ohio During the COVID-19 Pandemic

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Filing for consumer bankruptcy under any circumstances is a complicated task. To be sure, the U.S. Bankruptcy Code is extremely complicated, and both Chapter 7 and Chapter 13 bankruptcy cases require significant documentation and specific filing requirements. Accordingly, even in the best circumstances, it is critical to have an experienced Ohio consumer bankruptcy lawyer on your side. Yet during the COVID-19 pandemic, bankruptcy cases have involved more complications than usual. Given that so many Americans have lost their jobs due to the coronavirus emergency and have not been able to return to work, increased bankruptcy filings are likely.

If you are thinking about filing for bankruptcy during the COVID-19 pandemic, we want to make sure you understand some of the ways in which public health restrictions could affect your bankruptcy case.

You Can Still Seek Assistance from a Bankruptcy Lawyer

You might be concerned that you will not be able to work with a bankruptcy attorney since many lawyers and law firms are working from home to reduce the spread of COVID-19. It is extremely important to know that lawyers are still taking new bankruptcy cases and representing consumers in Chapter 7 and Chapter 13 bankruptcy cases. While it may be necessary to meet virtually and to handle the details of a bankruptcy case within a physical in-person meeting, all of the important and necessary aspects of a lawyer-client relationship have remained the same. Our Toledo bankruptcy lawyers remain here to assist debtors with consumer bankruptcy cases.

Credit Counseling and Debtor Education Courses Will Remain Online

When you file for consumer bankruptcy, you are required to attend pre-bankruptcy credit counseling and a post-bankruptcy debtor education course. Even prior to the pandemic, debtors who were seeking bankruptcy protection could complete these requirements online. Given that the pandemic has resulted in many in-person requirements shifting to a virtual model, you likely will not be surprised to learn that credit counseling and debtor education courses will remain online. To be clear, when it comes to completing these requirements, the COVID-19 pandemic has not changed anything.

341 Meeting of Creditors Will Be Conducted Virtually

In a typical bankruptcy case, the 341 Meeting of Creditors is always conducted in person and is a requirement for the bankruptcy case to move forward and for the debtor to receive a discharge. While the pandemic has indeed resulted in the 341 Meeting of Creditors moving to an online or virtual environment, you should know that this requirement will still be able to take place and your bankruptcy case can continue to move forward.

In short, although the pandemic has shifted some elements of a bankruptcy case, the COVID-19 emergency is not stopping debtors from filing for bankruptcy or receiving discharges.

Contact a Toledo Bankruptcy Attorney

For the most part, bankruptcy filings will not change in form due to the COVID-19 pandemic. However, you should anticipate that you may need to have your case heard virtually, and you may need to attend required meetings or hearings virtually instead of going into a courtroom and standing before a judge. Yet when it comes to having an experienced Toledo bankruptcy attorney on your side, our firm will be here for you every step of the way—whether we do so virtually or in person. Contact Groth & Associates today for more information about how we can assist you.

chapter 11 bankruptcy in Ohio

What Is Chapter 11 Bankruptcy?

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A Chapter 11 bankruptcy is one of the least common bankruptcy types for individuals to file. In fact, when most people think about bankruptcy, they think about Chapter 7 or Chapter 13 bankruptcy–the two most common types of bankruptcy for individuals to file. Most of the time, only businesses, such as corporations, limited liability corporations (LLCs), and partnerships are the ones to file for Chapter 11 bankruptcy, although in some cases, individuals may file if other options aren’t available. At the law offices of Groth & Associates, our Chapter 11 bankruptcy attorneys can answer your questions and guide you through the process of filing.

What Is a Chapter 11 Bankruptcy?

A Chapter 11 bankruptcy is often referred to as reorganization bankruptcy, as it is used by businesses (and, as mentioned above, sometimes individuals) to restructure debts. Many companies have used Chapter 11 to file for bankruptcy and restructure their debts in the past, including some of the most successful companies today, such as United Airlines and General Motors. 

How it Works

When a business is insolvent, they may file for a Chapter 11 bankruptcy. With the help of the bankruptcy court, the business may restructure its debts. This involves the business suggesting a reorganization plan; in order for the court to approve it, the plan must be in the best interests of the creditors to whom the business is indebted. While the business has the option of suggesting a reorganization plan, if they do not do so, the creditors can work together to create one. 

Usually, a business will continue to operate during the bankruptcy process. Only in special circumstances, such as in the case of fraud, will a bankruptcy trustee be appointed to run the business while the bankruptcy is pending; otherwise, the business will have control of their operations as normal.

Pros and Cons of Chapter 11 Bankruptcy

There are some downsides and advantages to filing for Chapter 11 bankruptcy. One benefit of filing for bankruptcy, in general, is that filing for bankruptcy initiatives the automatic stay. Another benefit is that it allows a business to continue operating; for individuals, reorganization bankruptcy can provide a clear path forward to escape financial woes. There are also some downsides, too. One major downside is that the Chapter 7 bankruptcy process is longer and more complex than other types of bankruptcy filings. It can also be difficult to negotiate a reorganization plan. 

Call Our Experienced Attorneys Today to Learn More

Whether as a business or an individual, filing for bankruptcy may be the best option if large amounts of debt are making financial independence impossible. At the law offices of Groth & Associates, our experienced attorneys know how difficult dealing with large amounts of debt is. If you are thinking about bankruptcy, we can help. Filing for Chapter 11 bankruptcy may be a viable option for you. Call our team today to learn more about how we can help.

how many times can you file for bankruptcy

How Often Can You File for Bankruptcy?

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Filing for bankruptcy is a huge decision. It’s also one that will have an effect on your credit score and financial health for years to come. While most people who file for bankruptcy aim to never do so again, things happen, and you may experience another financial emergency at some point in your life. If you have previously filed for bankruptcy and are considering doing so again, here’s what you should know about how often filing for bankruptcy is allowed. 

How Often Can You File for Bankruptcy?

You can actually file for bankruptcy as many times and as often as you’d like–there’s no penalty for doing so. However, the primary reason that debtors file for bankruptcy–to receive a discharge of their debts–cannot be pursued without limit. While you may be able to file for bankruptcy as often as you’d like, you can only receive a discharge of your debts after a certain amount of time has passed between your last discharge. 

What You Should Know About Bankruptcy Discharges

The amount of time that must pass between one bankruptcy discharge and another depends on the type of bankruptcy for which you’re filing and the type of bankruptcy for which you filed previously. For example…

If you’re filing for a Chapter 13 bankruptcy and you previously filed for a Chapter 7 bankruptcy, you will need to wait four years from the time that your debt was originally discharged until your current debts can be discharged. If you’re filing for Chapter 7 bankruptcy and previously filed for Chapter 13 bankruptcy, you’ll need to wait six years between discharges. Chapter 7 to Chapter 7 is an eight-year wait time, and Chapter 13 to Chapter 13 is only two years

I Need Debt Relief Now–What Should I Do?

For many people who are drowning in debt, the idea of having to wait another year, let alone another two, four, or six years, to file for bankruptcy and receive a discharge of their debts can be terrifying. If you need debt relief now, it’s best to talk to an attorney or a financial professional who can review your options and provide you with qualified advice. While you may not be able to file for bankruptcy and receive a discharge as often as you’d like, other options include:

  • Consolidating your debt;
  • Working out a payment plan with creditors;
  • Refinancing your mortgage;
  • Modifying your loan terms;
  • Creating a financial plan; 
  • Liquidating assets to pay creditors; and
  • More.

Our Attorneys Can Help

At the law office of Groth & Associates, we understand that debt is more than burdensome–it’s terrifying. If you are thinking about filing for bankruptcy but have already filed for bankruptcy in the past, it’s smart to talk to an attorney to discuss your options. To schedule a free consultation with our experienced bankruptcy lawyers, please send us a message using the intake form on our website or call us directly. Our law firm is here to provide you with sound legal advice and representation.

What is the Means Test in Bankruptcy?

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If you’re considering filing for Chapter 7 bankruptcy, you probably already know that a key benefit of the process is emerging debt-free and getting a fresh start. If you qualify, you can wipe out credit cards, medical bills, and other unsecured debt, while also enjoying an automatic stay against creditors seeking payment. However, there are strict rules associated with Chapter 7 bankruptcy. One of the most important is the “means test,” which assesses your income as a determining factor for purposes of eligibility.

There’s more to the Chapter 7 means test than a simple dollar amount, as bankruptcy courts will evaluate multiple factors and apply them to your unique situation. For this reason, retaining a Toledo bankruptcy attorney is crucial. You might also find it helpful to review some of the basics.

Purpose of the Means Test:

Though there are drawbacks in terms of your credit rating, the benefits of filing Chapter 7 bankruptcy are significant for the individual who files. When the process concludes, you have opportunities to build good credit without the burden of overwhelming debt. For many people dealing with interest and late fees they can’t pay off, bankruptcy is a smart financial move. The means test was implemented to prevent high wage earners from eliminating their debts when they do have the ability. In short, if you make too much, you’re not eligible for Chapter 7.

Eligibility Rules:

According to US Bankruptcy Code regulations, there are two factors for determining whether you qualify for Chapter 7 according to the means test:

  1. If your current monthly earnings are under the threshold median income for Ohio, you pass the means test. The amount is based upon your household size and how many people contribute financially. You can file for Chapter 7.
  2. When your monthly household income exceeds the threshold amount, your disposable income is the focus. To calculate the amount, refer to what you earn and subtract allowable expenses. Examples include housing costs, utilities, food, and other necessities. If it’s possible to pay some of your unsecured debts, you may NOT qualify under the means test.

Pass-Fail on the Chapter 7 Bankruptcy Means Test:

For individuals who aren’t eligible under the rules regarding the means test, Chapter 13 might be an option. Repayment is the objective of the process, though you may not have to pay the full amount that you owe creditors. There are additional advantages of filing Chapter 13 if you want to retain assets that would otherwise be liquidated in Chapter 7.

Get Additional Details from a Toledo, OH Bankruptcy Lawyer

The Chapter 7 means test is just of many complicated laws involved with the bankruptcy process, so it’s wise to work with an experienced attorney who can assist with your matter. Our team at Groth & Associates is dedicated to helping clients look forward to a brighter financial future through bankruptcy, so please contact us to set up a consultation. You can reach our Toledo, OH office by calling 419.482.1176 or visiting our website.

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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