About Bankruptcy In Ohio

Filing Bankruptcy In Ohio

Are you considering filing bankruptcy in Ohio? You are not alone. 1.5 million people filed for bankruptcy in 2010. While the 2011 numbers are not in yet, experts say they expect them to equal or exceed 2010 bankruptcy statistics.

You probably have many questions if you are considering filing for bankruptcy in Ohio or any other state. Some of the most common questions are as follows.

How Many Kinds of Bankruptcy In Ohio Are There?

For consumers, there are two types: Chapter 7 and Chapter 13. Chapter 7 clears the entire debt and is considered liquidation, while Chapter 13 is a repayment plan that must be approved by a court.

In Ohio and other states, a means test will be applied to your situation to decide whether you qualify for Chapter 7. In Ohio, a family of four that makes less than $71,000 per year will probably qualify for Chapter 7. If your family of four makes more than that, there might be other deciding factors as well.

Under Chapter 7 bankruptcy laws, in Ohio there are some exemptions:

1. The Homestead Exemption. This means up to $5,000 in equity exemption is applied to property that you own, including real estate.
2. Automobile exemption includes up to $1,000 in equity you have in a car or truck.
3. You will be allowed a $200 exemption for clothing, bedding and certain other housewares.
4. A $400 exemption is allowed for cash on hand.
5. Your interest in a group insurance policy should be exempt.

There are other exemptions under the bankruptcy laws in Ohio that might apply in your circumstance when you apply for a Chapter 7 bankruptcy under Ohio law. It’s very important that you speak with an experienced bankruptcy attorney. However, it is also important that you do not engage a bankruptcy professional without having a free consultation session first.  This is just common sense.  You need to know who you will be working with and you must feel comfortable working with them.  Remember you will be talking to them about the intimate and personal details of your life.

What If I Own A House In Ohio?

If you own a home and are eligible to file for Chapter 7, a portion of your property might be exempt. In other words, you might be able to keep the house. The same holds true for an automobile that you have less than $3,300 of equity in. You must speak with an attorney who specializes in Ohio bankruptcy law. It is possible that your home and car are not exempt, and therefore can be taken and sold. It is very important that you speak to a qualified person in regards to keeping your home and car.

If I File Bankruptcy in Ohio Will It Be Filed In An Ohio State Court?

No, it will not. Jurisdiction of bankruptcy laws is held exclusively by the Federal courts. However, do not worry about having to leave the state of Ohio or having to travel or take too much time off of work. There are Federal courts located in all 50 states.

If I File For Chapter 13, How Long Do I Have To Pay?

The court will approve a repayment plan that can last anywhere from 3 to 5 years. It won’t be up to you or your lawyer to decide; the court’s decision is what matters. However, be assured the court will take into account your ability to repay and your current debts. It will not place undue hardship upon you.

If at any time during the repayment plan your financial situation changes, you can have it addressed by the court. They will usually attempt to work with you.

How Do I Know If I Should File For Bankruptcy In Ohio?

It is entirely up to you whether or not you apply for bankruptcy. You should obtain good legal counsel and carefully consider all your options. Remember that the best decisions are usually made when we are calm and collected, not when we are very emotional. Talk to a professional and then take some time and think it over before you decide.

If you are living in Ohio, you should speak to an attorney or other specialist in bankruptcy laws in Ohio. Because bankruptcy must be filed in a Federal court, some laws apply no matter what state you live in. However, there are differences that are important to know when it comes to some state laws.

Which one you file depends on a means test. If it is determined that you are capable of paying back your debt in whole or partial sum, you will be required to file a Chapter 13. If you are incapable of paying any of your debt back, you might qualify for a Chapter 7.

There are many reasons that people for filing bankruptcy in Ohio, but the most common ones are loss of job, medical illness and foreclosure. Home ownership alone has dipped to 65.1% as of 2010, which is the biggest drop since the Great Depression. Many families are struggling and simply cannot get ahead.

The bankruptcy laws in Ohio will enable you to wipe the slate clean. You will undergo financial credit counseling for bankruptcy so that you can understand how to manage your money in the future. This is mandatory and you cannot file for bankruptcy unless you have a certificate stating that you have been counseled.  The counseling must have taken place with 180 of your filing for bankruptcy in a court.

This is not an indication that you have made a mistake; most people, whether they apply for bankruptcy or not, can benefit from financial counseling.

Filing bankruptcy in Ohio will affect your credit. There is no way around this. However, as soon as the bankruptcy has been discharged, you can begin rebuilding your credit. There are options available for people after they have declared bankruptcy. Though it will affect your life, it won’t ruin it. Instead, it will give you a fresh start. Put a plan together to rebuild your credit score and your credit history. This plan should include:

• Setting up monthly payments for all your bills and paying them on time every month.  This will go a long way to help building your credit score up again. But be careful never to be late, set them up to go out early if you have to.
• Applying for a credit card.  You may have to pay a higher interest rate than others with a better credit history, but that’s just how it goes.  You can always apply for a better interest rate further down the line, either from your existing credit card supplier or from a new one.
• Making sure to pay your credit card monthly, you do not need to clear it entirely every month, just leave a little outstanding, an amount that you could easily pay if you had to but choose not to.  There is a reason for this.  Some credit card companies do not like it when you pay your card off in full each month.  This is because they cannot make money out of you if you do this, and some of them may even take your card back (not very many but a minority) .  However it is very important that you do not build up debts that you cannot pay all over again. So just leave a little amount unpaid.  This is critical for you to understand.

Remember you are not alone, thousands of people are filing bankruptcy in Ohio each and every year.