Dayton Ohio Bankruptcy Attorneys - Chapter 7 Bankruptcy
Ohio Bankruptcy Filings On The Rise
“I Owe, I Owe, Off To Court I Go.” Unfortunately, a sick economy and an addiction to credit have caused too many Ohioans to sing this not so funny spoof of the popular Disney song on their way to bankruptcy court. Throw in a dose of high medical costs and no jobs to the mix and unbearable financial strain results. People from all lifestyles who have worked hard and lived responsibly find themselves with no other way to shed debt or get help than to look for Ohio bankruptcy help or to find a bankruptcy attorney in Dayton Ohio to initiate a bankruptcy litigation. Therefore, after suffering from the pain of juggling debts, people resort to what they once thought of as unthinkable, filing bankruptcy.
In 2008, 58,475 individuals and companies filed for bankruptcy in Ohio Bankruptcy Courts – 16 percent more than in 2007. That includes 42,171 Ohio Chapter 7 bankruptcy filings, which exceeded the previous year’s total number of Chapter 7 filings for the entire year by more than 25%. In the Northern Ohio counties, bankruptcy filings increased by 12 percent while the southern counties have seen a 17 percent increase in filings. Ohioans are not feeling the pain alone, according to American Bankruptcy Institute, nationwide, bankruptcy filings have increased 31 percent.
Adrian King, a Xenia attorney, agrees with the statistics. “I am not surprised by the large increase in bankruptcy filings. One need only read or watch the news to see the rise in unemployed people in Ohio. After people lose their jobs, limited savings and credit only stretch so far, before a drastic solution becomes necessary. And, bankruptcy is a drastic solution that, I think, should be used as a last resort.” Feel free to read more about Chapter 13 bankruptcy and Chapter 7 Bankruptcy
Alternatives to Ohio bankruptcy make sense when people are not eligible for bankruptcy or filing bankruptcy does not serve people’s best interests. Most people file bankruptcy because of a specific motivating reason such as a court issued judgment against them. Many times wage garnishments, repossessions, and foreclosures motivate the decision to file bankruptcy. However, alternatives to bankruptcy exist such as objecting to garnishments and fighting foreclosure actions. Common alternatives to bankruptcy include do nothing, negotiation and settlement, credit counseling service, debt settlement services, and debt work out agreements.
Surprisingly, doing nothing best serves some people. People with little income and property may be "judgment proof". Should a creditor sue and get a judgment against a “judgment proof” debtor, the creditor cannot collect because the debtor has nothing the creditor can legally take. Except in rare cases such as failure to pay child support, the government does not throw debtors in jail for not paying debts. In Ohio, a creditor cannot take away basics such as ordinary clothing, modest household furnishings, personal effects, food, Social Security, unemployment or public aid. Therefore, people who do not expect to have property a creditor could take may not need to file for bankruptcy. However, unlike creditors’ collection restrictions because of filing bankruptcy, doing nothing does not stop creditors’ annoying and often-embarrassing collection efforts.
Negotiating with Creditors - Dayton Ohio Bankruptcy Help
People or businesses experiencing only temporary financial troubles may find a solution to their troubles in negotiation with creditors. For example, a person behind with mortgage payments might negotiate with the mortgage holder to rewrite the mortgage so that the past due amount is added into the total remaining amount due and amortized over the period of the loan. Another common negotiated settlement requires debtors to turn over property to creditors in exchange for termination of debts and creditors forgoing making poor credit reports. Often, debtors successfully negotiate to pay off debts for reduced amounts in exchange for a lump sum payments. However, creditors require that the lump sum payments made within a short time of the agreement, and the differences between the amounts due and the lump sum payments may result in taxes due.
Credit counseling services help debtors negotiate payment plans with creditors. The service tries to convince creditors to accept less than the full amount of the debts and to reduce or cancel interest charges and penalty fees. Not all creditors will negotiate with credit counseling services. For instance, mortgage companies and secured lenders usually refuse to negotiate with credit counseling services. Generally, debtors pay monthly to credit counseling services who distribute payments to the creditors. Unlike the discharge of debts in bankruptcy, credit counseling does not discharge debts, but debtors pay back debts slowly over time, which can result in hurting credit ratings as badly as filing bankruptcy with Dayton Ohio bankruptcy attorneys. Beware that unscrupulous credit counseling services prey on debtors. Great numbers of these unscrupulous services exist and the Federal Trade Commission and Internal Revenue have active investigations underway.
Debt settlement services try to lower the amount owed on debts through negotiations. By doing this, debtors can pay off debts for less than the full amount owed. However, debtors must come up with the money quickly. People who find this service most helpful generally have equity in a home or retirement account that they can give up. Many services only try to swindle people so be careful. Debt settlement, like credit counseling, usually hurts your credit as much as filing bankruptcy even though you exhaust your assets to pay the debts as opposed to usually keeping them through filing bankruptcy.
Debt work-out agreements combine aspects of credit counseling and debt settlement. A service tries to lower your debts and allow payments over time. Debt work-out agreements call for a reduction in debt less than that of debt settlement services and for payments made at faster rates than credit counseling agreements. People expecting to soon receive large sums of money such an inheritance or bonus may find debt work-out agreements feasible.
When bankruptcy represents a debtor’s best or only solution, the debtor should not hesitate to file. If bankruptcy is the solution, the debtor cannot pay debts owed. Therefore, the debtor has poor credit or impending credit problems. Bankruptcy offers a cure for debt problems. After bankruptcy, a debtor has a fresh start. The fresh start beats suffering from unmanageable debt and annoying creditor collection efforts. The fresh start offers debtors opportunities to become financially stronger and support themselves and their families. Therefore, Ohioans facing large debts should consult with a bankruptcy attorney in Montgomery County to explore their choices including bankruptcy.
