There are many individuals who would like to not only protect their property but also catch up on mortgage and car payments in the process. In such cases, Chapter 13 bankruptcy is their ideal choice. However, there are just as many taxpayers who simply wish to eliminate all of their debts at once, in which case Chapter 7 bankruptcy is the perfect solution.
Prior to filing a petition for either type of bankruptcy, it is essential to evaluate the advantages and disadvantages of each one:
Advantages of Ohio Chapter 13 Bankruptcy
- Keep all property – Provided that you obey the terms of your repayment plan.
- Reduction of debts – Although debt is not discharged entirely, it is greatly reduced.
- Total protection against creditors – Including debt collection and wage garnishments.
- Classification of debts – Set different rules for your own debts vs. those incurred with another party.
- Dischargeable debts – Debt incurred due to fraud or credit card purchases of luxury items.
- Co-signer protection – If the established payment plan is for the full debt amount, your co-signers are safe from creditors.
- Unlimited Filing – You can file for a subsequent Chapter 13 petitions at any time.
- Foreclosure protection by the lender.
- More time to repay non-dischargeable debts.
Disadvantages of Ohio Chapter 13 Bankruptcy
- Limited spending until your payment plan is completed.
- Higher legal fees due to the more complicated bankruptcy process.
- Debt discharge takes 3-5 years.
- Stockbrokers and commodity brokers cannot file for this type of bankruptcy at all.
Advantages of Ohio Chapter 7 Bankruptcy
- A fresh start – Any remaining debts are secured debts on which you may sign a “Reaffirmation Agreement.”
- Total protection against creditors – Including debt collection and wage garnishments.
- Wages or property are safe – Any assets you acquire after filing for bankruptcy, excluding inheritance.
- No minimum debt requirement.
- Debt discharge within 4-5 months.
Disadvantages of Ohio Chapter 7 Bankruptcy
- Loss of property – Any non-exempt property, such as your home or car, may be sold by the trustee.
- Temporary defense against foreclosure – When your home is at risk, the automatic stay is not permanent.
- Co-signer risk – Anyone who co-signs for a loan may be liable to repay your debt on your behalf.
- Filing limitation – Once your initial case is closed, you cannot file a new Chapter 7 petition for 8 years.
Contact Sheppard Law Offices Today
With so many advantages and disadvantages of Chapter 13 and Chapter 7 bankruptcy, it can be difficult to select an option with minimal negative repercussions. When you are in need of high-quality legal advice, please do not hesitate to contact bankruptcy attorney Kenneth L. Sheppard, Jr. from Sheppard Law Offices today!
