Which Type of Bankruptcy Is Right for Me in Ohio?

Bankruptcy might be the right decision for you and your family. Learn about whether Chapter 7 or Chapter 13 bankruptcy is right for you.

You’re in over your head with debt. You may have put too many expenses on a credit card, and now you’re making payments every month, but you can never pay off your card in full. Or, you might not be able to afford the payments altogether. Perhaps you have auto debt or a big mortgage, and you lost your job, and now your credit score is sinking fast.

Bankruptcy might be the right option for you. However, there are two main types of bankruptcy you’ll have to choose from: Chapter 7 or Chapter 13.

Find out about each type of bankruptcy, and then figure out which one you’re going to file for with the help of an Ohio bankruptcy lawyer.

All About Chapter 7 Bankruptcy

If you file for Chapter 7 bankruptcy, you can discharge your unsecured debts, including credit card debt, personal loans, and medical debts. You cannot discharge student loans, child support, alimony, some tax debts, homeowners/condo association fees, and court fees.

The way that Chapter 7 works is that you file bankruptcy and list all of your debts, whether they are dischargeable or not. In most cases, the assets you own will be exempt, and the trustee will not need to sell your assets in order to pay off your unsecured debts. This is because your assets are protected by your exemptions. For instance, you can exempt up to $145,425 of equity in real property in your primary residence. If you own a vacation home or second property, you may need to give those up to pay your debts. You can also exempt up to $4,000 on your personal vehicle and up to $500 of cash on hand, among other exemptions.

You can only file if you didn’t file for Chapter 7 bankruptcy within the past eight years. You will also need to take a credit counseling course and debtor education course as part of the bankruptcy process.

A bankruptcy filing can stay on your credit report for up to 10 years. But you may see an immediate bump in your credit score. Once removed, it will be much easier to get loans and credit again at lower interest rates.

All About Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also called a wage earner’s plan, doesn’t make you give up anything. Instead, you will enter into a deal with your creditors to pay them back over three to five years. You’ll need to meet the terms of the repayment plan in order to qualify.

To file, you cannot have filed for Chapter 13 bankruptcy within the past six years. Additionally, you need to have a steady income and not have unsecured debt that totals more than $419,275. If you have a pending foreclosure, Chapter 13 will stop it from happening. Chapter 13 can also be used in order to protect assets that you may lose in a chapter 7 bankruptcy by agreeing to pay back a specific amount of your unsecured debts over three to five years.

Like with Chapter 7, you’ll need to take a credit counseling course as part of the program. And the bankruptcy will stay on your report for up to seven years. But in the long run, it could be the best option for you.

To figure out how to move forward, you can contact a bankruptcy attorney in Ohio, who will guide you through the process and help you decide what to do.

Get in Touch With Richard P. Arthur

Richard P. Arthur, Attorney at Law, can help you file for bankruptcy and get a fresh start with your finances. You can call 937-254-3738 for a consultation. He has more than three decades of experience helping clients in Dayton and Trotwood, as well as Montgomery, Greene, Miami, Clark, and Warren counties.