Does an Ohio Bankruptcy Discharge All Debt?

It is not true that an Ohio bankruptcy can discharge all of your debt. It really depends on what kind of chapter you’re filing for and what your debt management plan entails.

You’re thinking about filing for bankruptcy in Ohio, but you want to know that once you do, your debts will be erased. Unfortunately, this is not the case. Only certain types of bankruptcy could be discharged depending on the chapter you file for in the state of Ohio.

Learn more about filing for bankruptcy in Ohio, and then contact a bankruptcy attorney to help you with the process.

Will an Ohio Bankruptcy Discharge All Debt?

An Ohio bankruptcy will not discharge all debt. It can eliminate certain types of unsecured debt, however. Unsecured debt means that you do not have to return anything once you stop paying for it.

Types of Debt Bankruptcy Will Discharge

Unsecured debt, which bankruptcy can discharge, may include things like:

  • Credit card debt
  • Personal loans
  • Overdue utility bills
  • Medical bills

Bankruptcy can also eliminate some secured debt, like a car loan or a mortgage, but you will need to return the asset instead. Your other choice is to keep paying for it, but this could make it harder for you to rebuild your credit.

Types of Debt Bankruptcy Will Not Discharge

Ohio bankruptcy cannot get rid of student loans unless you demonstrate that you’re experiencing undue hardship – a very difficult thing to prove. You’ll have to show that you can’t pay back your loans, and you will likely not be able to in the future, either.

Bankruptcy will also not eliminate most types of tax debt unless it’s older and unpaid.

If you’re currently paying child support or alimony and you’re behind on your payments, you cannot get them discharged in bankruptcy.

Also, if you were convicted of a crime and owe fines and penalties, you cannot get them discharged by filing for bankruptcy.

Chapter 7 vs. Chapter 13 Bankruptcy

The two main types of bankruptcies individuals typically file for are Chapter 7 and Chapter 13 bankruptcy.

When you file for either Chapter 7 or Chapter 13 bankruptcy, your unsecured debts can be discharged. However, there is a big difference between the two: Chapter 7 is for liquidation, while Chapter 13 is for reorganization.

Chapter 7 usually takes three to five months, and Chapter 13 takes about three to five years, depending on how long you take to make your plan payments. With Chapter 7, you can sell your nonexempt property in order to pay back creditors, and with Chapter 13, you can keep your property – but you are required to pay your unsecured creditors an equal amount to the value of all of your non-exempt assets.

The biggest benefit of Chapter 7 is that you can quickly get out of many of your debts and move on with your life. The biggest benefit of Chapter 13 is that you can keep your property and get up to speed on your payments, including your car and mortgage bills.

It’s critical to consult with an Ohio bankruptcy attorney before you decide which type of bankruptcy is best. They will let you know based on your specific situation and the goals you wish to accomplish. Then, you’ll know you’re making the right choice for your financial future.

Contact Richard P. Arthur

Richard P. Arthur, Attorney at Law, will help you with filing for bankruptcy. You can call 937-254-3738 for a consultation. He has nearly three decades of experience helping clients in Dayton and Trotwood, as well as Montgomery, Greene, Miami, Clark, and Warren counties.