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Before you file for chapter 7 or chapter 13 bankruptcy, be sure to take the time to learn the ins and outs of each option. While one filing may seem ideal under certain circumstances, there are certain differences and limitations of each that help debtors determine which is a best fit for their situation. Work with a debt legal professionals to sort through options available to ensure the right choice is made and financial stability is eventually regained.
Chapter 7 bankruptcy In Ohio can help debtors wipe out money owed so a fresh start can be made financially. Debtors must agree to liquidate their assets to pay off creditors with property that is not exempt under Ohio rules. In Ohio, certain debts cannot be discharged under chapter 7 bankruptcy such as alimony, fraudulent debts, specific taxes and student loans. However, most people who choose to file chapter 7 bankruptcy are more interested in getting rid of filer debts so as to make it easier to manage the exempt debts in the future.
While chapter 7 does not protect property as chapter 13 does, debtors can maintain certain secured debts such as a car loan by reaffirming them. Debtors will sign a reaffirmation agreement, but those owes cannot be discharged until six years down the road. Debtors must continue to pay off these debts for the next six years until they are able to wipe the debt away through bankruptcy. Reaffirmation agreements can be put on hold within 60 days of filing for bankruptcy and does not change the plan for paying off filer debts.
If you choose to file for chapter 7 bankruptcy, you will acquire a fresh start once the bankruptcy discharging is complete. After those are eliminated, the only remaining debts will be for secured assets which were protected by the reaffirmation agreement. Debtors will have immediate protections against collection efforts and wage garnishment once they file. All wages earned and property acquired after bankruptcy is filed is protected and not liquidated, and there is no minimum amount of debt required to file. Most chapter 7 processes are completed within six months of filing.
There are some drawbacks to filing chapter 7 bankruptcy, however, debtors should be aware of. For example, once filed, a debtor will lose non-exempt property unless it is covered by Ohio bankruptcy exemptions. If the debtor’s home is being foreclosed upon, chapter 7 only provides a temporary halt on the repossession. Chapter 13 bankruptcy, on the other hand, can protect homes from being foreclosed upon through a more drawn out repayment method. If there are co-signors on any of the debts, these individuals may be stuck with amounts owed unless they too file for bankruptcy, and chapter 7 can only be filed once every six years.
This guest post was written by David Penny on behalf of Fesenmyer Law Offices, a bankruptcy attorney in Columbus Ohio. They work with companies and individuals to better restructure their debt.
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