Ohio Bankruptcy Law: How to Get Your Debts Discharged
Ohio bankruptcy law is designed to provide individuals and businesses a fresh financial start by discharging certain debts. Understanding the process can help you navigate the complexities of filing for bankruptcy and ensure you take advantage of all available opportunities for debt relief.
In Ohio, two primary types of bankruptcy filings are available for individuals: Chapter 7 and Chapter 13. Each serves different financial situations and has its own eligibility requirements.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, known as "liquidation bankruptcy," allows individuals to discharge unsecured debts such as credit card balances, medical bills, and personal loans. This process can be completed relatively quickly, typically within three to six months after filing.
To qualify for Chapter 7, you must pass the means test, which compares your income to the median income in Ohio for your household size. If your income falls below the median, you can file for Chapter 7. If it exceeds the median, you may still be eligible by completing further calculations to determine your disposable income.
Once you file for Chapter 7, an automatic stay will go into effect. This halts all collection activities, including lawsuits and wage garnishments. After your debts are reviewed and certain non-exempt assets are liquidated to pay creditors, most remaining unsecured debts will be discharged.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is often referred to as "reorganization bankruptcy." This option allows debtors to create a repayment plan to pay back all or part of their debts over a three to five-year period. This type of bankruptcy is suitable for individuals who have a regular income and wish to keep their assets, such as a home or vehicle, while repaying their debts.
To file for Chapter 13, you must have a regular income and unsecured debts that do not exceed $465,275 and secured debts that do not exceed $1,395,875 as of 2023. The repayment plan details how you intend to repay creditors and must be approved by the bankruptcy court.
Like Chapter 7, filing for Chapter 13 also triggers an automatic stay which protects your assets from creditors while you complete your repayment plan. Once you finish your plan, remaining unsecured debts may be discharged.
The Discharge Process
After successfully filing for bankruptcy and completing the necessary requirements, you can receive a discharge of your debts. This means that you are no longer legally required to pay them, and creditors cannot pursue collection efforts. It is important to note that not all debts may be discharged, as certain types, like child support, student loans, and some tax obligations, are non-dischargeable.
Preparing to File
Before you file for bankruptcy in Ohio, you should consider several steps to prepare:
- Gather financial documents: Collect information about your income, assets, debts, and expenses. This will be crucial for accurately completing your bankruptcy forms.
- Credit counseling: Ohio law requires individuals to complete a credit counseling course from an approved provider within six months prior to filing.
- Consider consulting a bankruptcy attorney: Legal guidance can be invaluable in navigating the complexities of the bankruptcy process and ensuring you understand your rights and responsibilities.
Final Thoughts
Navigating Ohio bankruptcy law can be overwhelming, but understanding the different types of bankruptcy and the discharge process is essential for a successful outcome. Whether you choose Chapter 7 or Chapter 13, being informed will allow you to make the best decision for your financial future. Remember, bankruptcy offers a chance to reset your financial situation, so embrace the opportunity for a fresh start.
Before proceeding with any legal filings, always consult with a knowledgeable bankruptcy attorney who can provide personalized advice based on your specific situation.