Understanding the different options in bankruptcy can seem difficult and confusing. Most people have heard the chapters and numbers, but have little to no idea what they mean, and honestly, without a good attorney, experienced in bankruptcy law Strongsville OH bankruptcy guidelines would become a laborious challenge.
The Benefits Of Filing For Bankruptcy
Upon filing for Bankruptcy protection, the court issues an automatic stay which is imposed upon your creditors. Normally, within 7-10 business days after applying for Bankruptcy, the court sends a bankruptcy notice to the creditors listed in your petition. This immediately precludes them from taking any further action against you to collect a debt. No phone calls, letters, wage garnishments, or repossessing property will occur.
Can I File For Chapter 7?
In order to file for bankruptcy, you must qualify. This criteria is called a “means test“, and is based on the way your annual gross income is compared to the median gross annual income of a similar size family in Ohio. Even if you do not meet the guidelines in the means test, you can still file for Chapter 13.
However, most debtors select Chapter 7 because it deals with liquidation of the debts, and the benefits include:
- Most users can save all their assets, as they are protected by the exemptions.
- If the assets are not protected, they can be turned over to the court for liquidation, or they can be settled in a way that allows the client to maintain the property.
- Chapter 7 debtors usually receive a discharge of their debts within three to four months from the date the case is filed with the court.
- There is no payment plan for creditors.
When a debt is discharged, they relieve a debtor forever of the obligation to pay that debt, so you get a fresh start.
Filing For Chapter 13
Chapter 13 Bankruptcy allows individuals or couples to pay all, or a portion, of their debts. This chapter is designed for workers with constant income, who are bombarded with accounts, lawsuits and other financial concerns. A Chapter 13 plan is used primarily to offset mortgage arrears, large car notes, and a percentage, or all of the money due other creditors, during a period of the three to five years.
While a Chapter 13 Bankruptcy event is in effect, creditors cannot commence or continue their collection efforts, and must accept what the plan pays them. Upon successful completion of a Chapter 13 repayment plan, the debtor receives a discharge which extinguishes all obligations to their creditors named in the filing.
Declaring Bankruptcy A Second Time
It is possible to declare bankruptcy more than once, but only every eight years. You can file a second time from the date the court ordered your discharge.
Bankruptcy will appear on your credit report for 10 years, and 7 years for Chapter 13. With respect to obtaining new credit after declaring Bankruptcy, the determination to approve credit in the future is up to an individual creditor. This decision will vary from creditor to creditor. Before filing, be sure that you have acquired the advice and assistance of a bankruptcy attorney, which will help you avoid procedural challenges in the long run.