Ohio Bankruptcy Filing - Northern Ohio - Personal Bankruptcy Law

People who are considering filing for bankruptcy in Ohio, either Chapter 7 or Chapter 13, often have many misconceptions. This only adds to the stress already being exerted by a difficult financial situation. The truth is by filing for bankruptcy in Ohio, you can free yourself of an unmanageable amount of debt and the distractions that come along with it. All of your efforts and resolve can now be devoted to the future and creating a stable financial environment for yourself and loved ones.

Filing for Bankruptcy is your legal right

Far from being criminal, bankruptcy was created and even utilized by our forefathers with the express intent of giving any citizen a chance at a fresh start. The purpose is to ensure that your efforts and financial resources will benefit all of society, instead of perpetuating a situation in which only the creditor will profit. In most cases, Ohio bankruptcy legally allows you to relieve yourself of financial debt that would otherwise increase.

What Bankruptcy Can Do For You

Bankruptcy may make it possible for you to:

Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts. It is designed to give you a fresh financial start. This is not an absolute right, but does provide tremendous relief for those with large amounts of unsecured consumer debt.

Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments. Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment. You must ultimately pay your lender, but the court will allow you a longer time in which to do so than you would ordinarily be able to negotiate with your lender.

Prevent repossession of a car or other property and allow you the opportunity to catch up on missed payments. Once again, you must ultimately pay your lender at least the fair market value of the car.

Stop wage garnishment, debt collection harassment, and similar creditor actions to collect debt. Once bankruptcy is filed, creditors must stop all collection activities.

Restore or prevent termination of utility service. You may be required to put a deposit with your utility company, but they cannot discontinue service as a result of payments in arrears.

Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe. This is typically the case in a foreclosure action where a default has occurred, but at a different point in time and for a different amount than alleged.

What Bankruptcy Cannot Do

Bankruptcy cannot, however, cure every financial problem. Nor is it the right step for every individual.

In bankruptcy, it is usually not possible to:

Eliminate certain rights of “secured” creditors. A “secured” creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if your property is taken. Nevertheless, you generally cannot keep the collateral unless you continue to pay at least the fair market value of the collateral, unless the debt is secured by real estate in which case you must pay the entire debt.

Bankruptcy cannot discharge certain types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, some student loans, court restitution orders, criminal fines, and some taxes.
Bankruptcy generally cannot protect cosigners on your debts unless you specifically provide to the contrary in a Chapter 13 repayment plan. When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the co-signer may still have to repay all or part of the loan.

Bankruptcy cannot discharge debts that arise after bankruptcy has been filed.

Bankruptcy cannot discharge debts if your income is such that you are deemed to not be truly in need of protection from the bankruptcy court and your filing is made in bad faith.

Bankruptcy cannot discharge debts which you incurred through false pretenses or on the eve of your bankruptcy filing. For example, you may not spend up to your credit card limit and shortly thereafter discharge your obligation in bankruptcy. Remember that the intent of bankruptcy is to provide relief to honest but distressed consumers, not to provide an unfair advantage for the unscrupulous debtor.

Bankruptcy cannot alter some rent-to-own (RTO) agreements. If these agreements are in default before filing you may not be able to make up your back payments through bankruptcy. Please advise your attorney at your earliest convenience if you are part of a RTO agreement.

Conclusion

For many, the decision to use the protection of the bankruptcy court is a difficult one. At the same time, it is the best course of action for many given their financial condition. Unfortunately, creditors reinforce many negative perceptions about bankruptcy. Many erroneously associate the term bankruptcy with failing or giving up. In fact the opposite is true: bankruptcy allows you to finally take control of your debts and legally deal with your creditors. You will come out of bankruptcy with a fresh start and a more meaningful life. Many do not exercise their rights under the law; as a result, many debtors endure relentless creditor harassment, loss of wages and loss of their home, car, and other valued possessions. The bankruptcy laws are available for everyone’s protection and nobody should eliminate it as an option until they have fully discussed it with an attorney practicing in the field.