Personal Bankruptcy Ohio

Personal Bankruptcy

 

The Top Questions to Consider when Considering Personal Bankruptcy

If you are thinking about personal bankruptcy, you should answer the following questions below to figure out if you should proceed with bankruptcy and what type:

  1. Would you be able to pay off your debts, excluding your mortgage, within the next 3 years?
    1. If you answered “Yes” you should not consider bankruptcy.
    2. If you answered “No” considering bankruptcy, there are 2 options to consider and see which is best for you:

Chapter 7: Many of your debts are forgiven immediately and you will probably not have to give up your non-exempt property.  About 96% of people that file for chapter 7 won’t lose any of their assets.

Chapter 13: This option is where you pay a portion of your debts over 3 to 5 years.

    1. Is your income greater than the median income for your state?
      1. If you answered “Yes”, your repayment plan must be for a maximum of 5 years if you decide on chapter 13 bankruptcy. Chapter 7 may be dismissed or converted to a Chapter 13 if you don’t pass the Means Test.
      2. If you answered “No” you automatically pass the Means Test. Taking the chapter 13, 3-year repayment plan is best practice.

 

    1. Do you have non-exempt property that you will like to keep if you choose bankruptcy? Do you need to catch up on your mortgage? Do you owe taxes?
      1. If you answered “Yes” consider chapter 13 bankruptcy. If your income is greater than the median, you will have to pay over a maximum of 5 years.
      2. If you answered “No” you can then consider chapter 7 bankruptcy.

 

    1. Are your debts mostly consumer debts and is your income greater than the median?
      1. If you answered “Yes” take the Means Test!
      2. If you answered “No” choose either of the bankruptcies and ask your Attorney which will be more beneficial to you.

 

    1. Did you pass the Means Test? If so, deduct the following expenses from your gross income:
      1. IRS living, Housing, and Transportation
      2. Mandatory payroll deductions and future support requirements.
      3. Health insurance premiums
      4. Debt payments

 

    1. Is the difference between your monthly expenses and gross monthly income less than $100.00 (if the difference is more then proceed to step 7)
      1. If you answered “Yes” you passed the Means Test and can choose between the 2 types of bankruptcies.
      2. If you answered “No” there is a possibility that you will only be able to choose chapter 13.

 

    1. Is the difference between your expenses and gross monthly income between $100 and $166.66 per month and less than 25% of your unsecured nonpriority debts (credit cards, etc. and medical bills divided by 60)?
      1. If you answered “Yes” You passed the Means Test
      2. If you answered “No” you can only choose Chapter 13.

 

  1. Is the difference between your expenses and gross income more than $166.67 per month?
    1. If you answered “Yes” you can only choose Chapter 13
    2. If you answered “No” ask your attorney which type of bankruptcy will benefit you.

 

 

What Bills Should I Pay First When Considering Personal Bankruptcy?

If you are filing for personal bankruptcy you should prioritize your monthly bill payments. The following is a list to help you with bill payments when thinking about bankruptcy:

Note: If you plan on moving, selling your car, or selling your home this list can change slightly.

  1. Rent
  2. Utilities
  3. Car
  4. Mortgage
  5. Fines
  6. Child Support
  7. Spousal Support
  8. Income Taxes

 

 

Is Ohio Chapter 7 (Straight Bankruptcy) Bankruptcy Right for Me?

In a case when you apply for Personal Bankruptcy under Chapter 7, you’re filing a petition and asking the court to discharge your unsecured non-priority debts.

The basic idea of chapter 7 bankruptcies is to discharge your debts and keep your property, especially any property that is considered “exempt”.

In most cases, all your property should be considered “exempt”. Property that is not exempt may then be either sold by the trustee with the monetary value distributed to creditors, or compromised with the trustee so that you pay for the unprotected equity to the trustee and you keep the property.

If you want to keep property such as your home, or car and you are behind in payments on your loans, chapter 7 will probably not be the proper route for you.

Chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take the property to cover your arrears.

 

 

Is Ohio Chapter 13 bankruptcy (Reorganization) Right for Me?

When filing for chapter 13 bankruptcy, you are filing a “plan” with the courts, showing them how you will pay off some of your past-due debt as well as your current debts. This plan will be showing them how you will pay off these debts over the next 3 to 5 years.

The most important item about chapter 13 is that it will allow you to keep your property and assets, if you can keep up with the payments that the bankruptcy law requires you to make to your creditors.

In most cases, the payments to be made to your creditors will be about the same as your regular monthly payments on your mortgage and car loans, but including a little extra to get caught up on the amount your behind on.

You should consider chapter 13 bankruptcy if:

  1. You own your home and are in danger of losing it.
  2. You are behind on debt payments but can catch up if given some time.
  3. You have valuable property that is not exempt, but you can afford to pay creditors over time.

 

To learn more about your bankruptcy options call your local attorney Kenneth Sheppard, Jr. or fill out the form below and one of our attorneys will get back to you within 48 hours. Settle your debts today, and gain your life back. For a free consultation, today call Sheppard Law Offices at (877) 505-9455.

 

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