An Alternative To Bankruptcy For Ohio Residents

As of 2021, Ohio’s total state debt is approximately $28.9 billion. This includes both general obligation debt and revenue debt. In terms of per capita debt, Ohio’s debt is about $2,476 per person, which is below the national average of $3,047 per person. Ohio’s debt has increased in recent years due to a variety of factors, including declines in revenue and increased spending on programs such as Medicaid and education. As of 2021, Ohio had a bankruptcy filing rate of 2.84 per 1,000 people, which is slightly above the national average of 2.61 per 1,000 people. The most common type of consumer bankruptcy filing in Ohio is Chapter 7 bankruptcy, which accounted for 74% of all consumer filings in 2020. Chapter 13 bankruptcy accounted for the remaining 26% of consumer filings.

Bankruptcy Laws in Ohio

Bankruptcy laws in Ohio are governed by federal law, specifically the United States Bankruptcy Code, which is found in Title 11 of the United States Code. However, there are also some specific Ohio bankruptcy laws and exemptions that debtors can take advantage of when filing for bankruptcy. In Ohio, individuals can file for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 7 bankruptcy is designed for individuals with little to no disposable income and involves the liquidation of assets to pay off debts. Chapter 13 bankruptcy, on the other hand, allows debtors to restructure their debts and create a repayment plan over three to five years. Ohio has its own set of exemptions that allow debtors to keep certain assets and property during bankruptcy. These exemptions include a homestead exemption, which allows homeowners to keep up to $145,425 in equity in their primary residence, a vehicle exemption of up to $4,000, and a personal property exemption of up to $1,325. In addition to federal and state bankruptcy laws, debtors in Ohio must also comply with 

Types of Business Bankruptcy and What You Need To Know

There are three main types of bankruptcy for businesses in the United States: Chapter 7, Chapter 11, and Chapter 13. Each type of bankruptcy has its own requirements, benefits, and drawbacks.

• Chapter 7 Bankruptcy: This type of bankruptcy involves liquidating a business’s assets to pay off creditors. Any remaining debts are typically discharged, and the business is closed down. Chapter 7 is often used by small businesses that are unable to pay their debts and have no hope of reorganizing.
• Chapter 11 Bankruptcy: Chapter 11 bankruptcy allows a business to reorganize its debts and continue operating. This type of bankruptcy is typically used by larger businesses with more complex financial structures. Under Chapter 11, a business proposes a reorganization plan to its creditors and the court. If the plan is approved, the business can continue operating and paying off its debts over time.
• Chapter 13 Bankruptcy: Chapter 13 bankruptcy is similar to Chapter 11 but is typically used by small businesses with lower levels of debt. Under Chapter 13, a business proposes a repayment plan to its creditors, which is typically paid off over a period of three to five years.

If you are considering filing for business bankruptcy, there are several things you should keep in mind:

• Bankruptcy is a legal process and should be approached with the guidance of an experienced bankruptcy attorney.
• Bankruptcy will impact your credit score and ability to obtain credit in the future.
• Bankruptcy may require you to sell some of your assets to pay off creditors.
• Bankruptcy can offer a fresh start and relief from overwhelming debt.
• Bankruptcy may not be the best solution for every business, and other options should be explored before filing.

Bankruptcy Chapters 7, 13 and 11 – What You Need to Know

What Debts Are Not Discharged in Bankruptcy?

While bankruptcy can provide relief from many types of debts, there are certain debts that are generally not dischargeable in bankruptcy. These include:

• Most taxes: Income tax debts that are less than three years old and many other types of taxes cannot be discharged in bankruptcy.
• Student loans: Student loans are usually not dischargeable in bankruptcy, except in cases of undue hardship, which is a high standard to meet.
• Child support and alimony: Debts related to child support and spousal support cannot be discharged in bankruptcy.
• Debts incurred by fraud: If a debt was incurred through fraud, misrepresentation, or other illegal activity, it may not be dischargeable.
• Debts related to fines and penalties: Fines and penalties owed to government agencies, such as traffic tickets or court fines, cannot be discharged in bankruptcy.
• Debts related to willful or malicious injury: Debts arising from willful or malicious injury to another person or their property cannot be discharged in bankruptcy.

How Does Bankruptcy Affect Your Credit Score and Ability to Get a Future Loan?

Filing for bankruptcy in Ohio can have a significant impact on your credit score and ability to get a future loan. When you file for bankruptcy, it will stay on your credit report for up to 10 years, and can negatively affect your credit score. During the bankruptcy process, your credit score will likely decrease as a result of missed payments and high levels of debt. However, the exact impact on your credit score will depend on several factors, including your current credit score, the amount of debt you have, and the type of bankruptcy you file. You may be able to obtain credit after bankruptcy, but the terms of the credit may not be favorable, and interest rates may be higher than for those without a bankruptcy on their credit report.

How Does Bankruptcy in Ohio Affect Tax Debt?

Bankruptcy can affect tax debts in Ohio in several ways, depending on the type of tax debt and the type of bankruptcy being filed.

In general, most taxes are not dischargeable in bankruptcy. However, certain types of tax debts may be dischargeable under certain circumstances.

Under Chapter 7 bankruptcy, income tax debts can be discharged if the following conditions are met:

• The taxes were due at least three years before the bankruptcy filing.
• The tax return was filed at least two years before the bankruptcy filing.
• The tax assessment was made at least 240 days before the bankruptcy filing.
• The taxpayer did not commit any fraud or willful tax evasion.

Under Chapter 13 bankruptcy, income tax debts may be included in a repayment plan, allowing the debtor to pay off the tax debt over time. The debtor will still be required to pay interest and penalties on the tax debt.

Will You Lose Your Assets in Bankruptcy in Ohio?

Whether you will lose your home or car in bankruptcy in Ohio will depend on several factors, including the type of bankruptcy you file, the value of your assets, and the amount of your debts. Under Chapter 7 bankruptcy, a debtor’s non-exempt assets may be sold to pay off creditors. Ohio has both federal and state exemption laws that allow debtors to protect certain types of assets from being sold in bankruptcy, including a certain amount of equity in their home and car. If the equity in your home or car is protected by exemptions, you may be able to keep them in a Chapter 7 bankruptcy. Under Chapter 13 bankruptcy, a debtor may keep their assets, including their home and car, as long as they can continue to make payments on any secured debts, such as a mortgage or car loan. A Chapter 13 bankruptcy involves a repayment plan that allows the debtor to pay off their debts over a period of three to five years. It is important to note that there are certain circumstances under which a debtor may still lose their home or car in bankruptcy, even if they are protected by exemptions or can continue to make payments. For example, if a debtor falls behind on their mortgage or car loan payments, the lender may be able to foreclose on the home or repossess the car, regardless of the bankruptcy filing.

Statute Of Limitations For Collections in Ohio

In Ohio, the statute of limitations for collections on most types of debt is six years. This means that creditors or debt collectors have six years from the date of the last payment or charge on the account to file a lawsuit to collect the debt. Once the statute of limitations has expired, the creditor or debt collector is no longer legally able to pursue legal action to collect the debt. It is important to note that the statute of limitations varies depending on the type of debt. For example, the statute of limitations for written contracts, such as credit card debt, is six years, while the statute of limitations for oral contracts is only four years. Additionally, the statute of limitations may be extended in certain circumstances, such as if the debtor leaves the state or files for bankruptcy.

Cons of Bankruptcy in Ohio

While bankruptcy in Ohio can provide relief from overwhelming debt, there are several potential cons to consider before filing:

• Impact on credit score: Bankruptcy will stay on your credit report for up to 10 years, and can significantly lower your credit score, making it more difficult and expensive to obtain credit in the future.
• Loss of assets: Depending on the type of bankruptcy you file and the value of your assets, you may be required to sell certain assets to pay off creditors. This could include your home, car, or other valuable possessions.
• Public record: Bankruptcy is a matter of public record, which means that anyone can access information about your bankruptcy filing, including your creditors and potential employers.
• Cost: Filing for bankruptcy can be expensive, with fees ranging from several hundred to several thousand dollars depending on the type of bankruptcy you file and the complexity of your case.
• Difficulty obtaining credit: Even after your bankruptcy is discharged, you may have difficulty obtaining credit or may be required to pay higher interest rates and fees than someone with good credit.

Compare the Pros and Cons of Bankruptcy: Pros and Cons of Filing Bankruptcy

Will You Regret Filing For Bankruptcy?

There are several reasons why people may regret filing for bankruptcy, including:

• Damage to credit score: Bankruptcy can significantly lower a person’s credit score, making it more difficult and expensive to obtain credit in the future. This can be particularly problematic if the person needs to borrow money for a major purchase, such as a home or car.
• Loss of assets: Depending on the type of bankruptcy and the value of a person’s assets, they may be required to sell certain assets to pay off creditors. This could include their home, car, or other valuable possessions.
• Public record: Bankruptcy is a matter of public record, which means that anyone can access information about the person’s bankruptcy filing, including creditors and potential employers.
• Emotional impact: Filing for bankruptcy can be a stressful and emotional process, as it can feel like a personal failure or a loss of control over one’s finances.
• Limited financial options: Even after the bankruptcy is discharged, the person may have limited financial options, such as difficulty obtaining credit or being required to pay higher interest rates and fees than someone with good credit.

What Happens if You Do Not Qualify for Bankruptcy in Ohio?

If you do not qualify for bankruptcy in Ohio, it may mean that you do not meet the eligibility criteria for filing under Chapter 7 or Chapter 13 bankruptcy. In this case, you may need to explore other options for managing your debt, such as debt settlement. Debt settlement involves negotiating with creditors to settle your debts for less than the full amount owed. 

Learn more: What Are Your Options When You Don’t Qualify for Bankruptcy

Debt settlement may be a better option for a number of reasons, including: 

• Avoiding bankruptcy stigma: Debt settlement does not carry the same stigma as bankruptcy, which can be important if you are concerned about the long-term impact on your reputation.
• Avoiding legal fees: Debt settlement may be less expensive than bankruptcy, as you may be able to negotiate directly with creditors and avoid hiring an attorney.
• Maintaining some control: With debt settlement, you may have more control over the process and the outcome compared to bankruptcy, as you can negotiate directly with creditors and potentially preserve some of your assets.

Bankruptcy vs. Debt Relief: What’s Right For You and How We May Be Able To Help

CuraDebt Is At Your Service

CuraDebt, a professional debt settlement firm, is a great alternative to bankruptcy. We have a team of debt professionals who are ready to help you better understand and potentially eliminate your debts. Contact us today for your free consultation. 1-877-850-3328

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