Most people incorrectly believe that filing bankruptcy will make their credit worse. Nothing could be farther from the truth. If you are considering bankruptcy, you probably already have poor credit. Your poor credit likely resulted from slow payments, late payments, repossessions, extended credit, foreclosures, or judgments. After bankruptcy, discharged debts do not count against income, so creditworthiness may improve. Also, late payments stay on credit reports for seven years, so the ten years a bankruptcy stays on credit reports isn’t that much of a consequence if one considers the benefits of debt discharge. Discharge results in an improvement in a key component used to determine creditworthiness, debt-to-income ratio (debt divided by income). Bankruptcy likely provides a means to improve your future creditworthiness. (click here to continue reading in pdf)
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A bankruptcy attorney in Ohio from the QuickJD Legal Portal can help individuals file personal bankruptcy in Ohio and emerge from seemingly endless debt. Trying to climb your way out of debt can be very frustrating. As the phone calls from creditors and collections agencies reach a cacophony, people in debt may have to acknowledge that their financial situation is heading too far in the wrong direction and that legal intervention is necessary.
There are many reasons why individuals consider personal bankruptcy in Ohio:
- Recent loss of employment
- High medical bills
- Receive "automatic stay" protection against creditors and collections agencies
- Prevent repossession of certain property
Deciding between types of bankruptcy
As an individual, you have two main bankruptcy options, Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common type filed by individuals in debt. Also known as liquidation, a successful Chapter 7 bankruptcy results in the discharge of your debts and liquidation of all non-exempt assets, which are distributed to creditors by a Trustee. Importantly, exempt assets can include your home up to a certain value in equity. Chapter 7 can be viewed as providing a "fresh start"; however, your Chapter 7 bankruptcy case will remain in your credit history up to ten years.
In 2005, the U.S. Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which made it more difficult for debtors to qualify for Chapter 7. Now, individuals must pass a "means test", which compares your average monthly income with the median income of your state. If your income is more than the median, then you may be ineligible.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is reserved for individuals who have sustainable incomes. When debtors file for this type of personal bankruptcy in Ohio, they must formulate a schedule to pay back creditors, which has to be approved by creditors. Chapter 13 is for those people who could be able to pay back their loans over time or those who do not qualify for Chapter 7. Chapter 13 can enable you to avoid losing nonexempt assets that would be liquidated in Chapter 7 and it can provide a chance to repair delinquent mortgage payments.
File Bankruptcy in Ohio
Filing for bankruptcy in Ohio is rather complicated. Bankruptcy law in Ohio combines federal and state statutes. For example, in a Chapter 7 claim, debtors can choose between the federal and Ohio lists of exemptions for properties such as your house. Learn more about Ohio bankruptcy services available via the QuickJd.com Legal Portal. Our featured Ohio bankruptcy attorneys can help you file a bankruptcy in Ohio that is in your best interests.
Addressing Your Financial Situation
Whether you are a business or individual, the first step for bankruptcy litigation in Ohio entails a thorough assessment of your financial situation. Depending on your level of debt and your current and projected income, our featured Ohio bankruptcy lawyers will advise you about which type of bankruptcy to file. For most businesses and individuals, there are two choices:
- Discharge debt and liquidate non-exempt assets (Chapter 7)
- Formulate a repayment schedule (Chapter 11 for businesses and Chapter 13 for individuals)
Ohio Bankruptcy Laws - Establishing Eligibility
In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which enforced stricter criteria for qualifying for Chapter 7 liquidation. Under the new rules, an individual has to pass a "means test", which judges an individual’s income against the state median income. If your income is greater, you may not be eligible and could have to pursue Chapter 13 instead.
If you are unsure about if you qualify for Chapter 7, contact the QuickJd.com Legal Portal about filing bankruptcy in Ohio.
How Ohio Bankruptcy Law Works
In order to commence a bankruptcy, you must complete and submit a petition to a court. The petition contains detailed information about your financial situation and history:
- A description of your real and personal properties
- A list of claimed exemptions and their values
- Names and contact information of creditors with claims against you
- Date creditor claims were incurred, including amount claimed
- Your current income and expenditures
- Statement of intention to file a specific type of bankruptcy
Along with the petition, debtors are expected to pay filing fees. For Chapter 7, the amount is $299. If you are worried about not being able to pay this, our featured Ohio bankruptcy lawyers can help you explore the possibility of a fee waiver.
In addition, as part of the BAPCPA, debtors are must enroll in credit counseling within 180 days prior to filing bankruptcy.
Ohio Business Bankruptcy
Solutions For Companies in Debt in Ohio
If you are heading a company that is amassing too much debt, the QuickJD Legal Portal can help you file business bankruptcy in Ohio. Our featured Ohio business bankruptcy attorneys are aware of the extraordinary amount of time and money that owners invest in their businesses. Being at the helm as a company sinks can be very stressful and disappointing. Sometimes, unforeseen circumstances cause businesses to fall into cycles of debt from which they cannot recover. Few people anticipated, for example, the sharp increase in bankruptcies stemming from the financial crisis of 2008 and its resultant tightening of available credit.
Nevertheless, the problems that caused your business to languish are not as important, now, as the possible solutions. Our featured lawyers advise clients on the legal mechanisms in place to halt or reverse your company’s misfortune. Contact the QuickJD Legal Portal for Ohio business bankruptcy information and advice.
Choosing which Type of Ohio Bankruptcy to File
Our featured bankruptcy attorneys can advise clients about the two types of business bankruptcy in Ohio: Chapter 7 and Chapter 11. A business bankruptcy lawyer will sit down with business owners and assesses the details of their balance sheets before deciding on a course of action. Chapter 7 and Chapter 11 represent two very different fates for companies:
- Chapter 7 bankruptcy in Ohio: this option discharges your debts and liquidates your non-exempt assets. Chapter 7 is commonly used by individuals steeped in consumer debt, but can also be suitable for businesses without any prospect of longer-term sustainability. Learn how to form a debt repayment plan with an Ohio personal bankruptcy.
- Chapter 11 bankruptcy in Ohio: this option allows the business owner to maintain control over the business’s assets while reorganizing the company and adhering to a creditor-approved payment plan.
If you are filing for Chapter 11 in Ohio, The QuickJD Legal Portal Lawyers can help you formulate a reorganization plan to present to creditors.
Exploring an Ohio Business Work Out
In some instances, you may be able to pursue an Ohio business "work out," which entails reaching an agreement with creditors outside of bankruptcy court. Some topics addressed by a business work out could include your current and projected revenues and debts, how to restructure your company, and a feasible schedule for paying back loans. Of course, creditors must voluntarily agree to all terms of a work out.
When this option is possible, a bankruptcy lawyer will work with you to try to keep your business away from bankruptcy court.
Bankruptcy Articles
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 than bankruptcy. Therefore, after suffering from the pain of juggling debts, people resort to what they once thought of as unthinkable, filing bankruptcy. (click here to continue reading in pdf)