Chapter 13 Bankruptcy Lawyers in Ohio
Ohio Chapter 13 Bankruptcy Lawyer
Many people view bankruptcy as a last-ditch effort to resolve their overwhelming debt. While bankruptcy may seem like a drastic step, Chapter 13 bankruptcy often serves as a “soft-landing.”
For those who choose Chapter 13 bankruptcy, Ohio state law protections can help you keep your property. You can also begin to repay your creditors and get back on the road to financial health.
You do not have to try it alone. Contact Amourgis & Associates, Attorneys at Law, today and talk to one of our Ohio Chapter 13 bankruptcy attorneys. We can explore whether Chapter 13 bankruptcy might help in your current situation.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is sometimes called a “wage earner’s plan.” Chapter 13 allows an individual or married couple with regular disposable income to develop a plan that lets them pay off all or a substantial portion of their debt. In contrast, another form of bankruptcy, Chapter 7, requires debtors to liquidate most of their assets to repay creditors.
Debtors who file for Chapter 13 bankruptcy develop a repayment plan that lasts for three or five years. The length of the plan depends on whether the debtor’s income is less or more than the median income in Ohio, respectively.
During Chapter 13 bankruptcy, creditors cannot begin or continue their collection efforts. For example, they cannot send collection notices, foreclose on or repossess property, or file a collection lawsuit. This protection is called the bankruptcy “stay.” In addition, the debtor retains possession of his or her indebted property so long as he or she makes payments under the approved repayment plan.
At the end of the repayment plan, the bankruptcy court will order the discharge of any remaining dischargeable debts. Certain debts, such as unpaid taxes, child support arrears, or student loans can’t be discharged. Talk to a Chapter 13 lawyer to find out more.
The Advantages of Chapter 13
Is Chapter 13 bankruptcy your best option? Consider these advantages. Chapter 13 allows you to:
- Avoid foreclosure – When you file for bankruptcy, the court automatically institutes a stay. That prevents creditors from engaging in collection action. For example, when a stay is in place, a bank cannot foreclose on your home. In Chapter 13 bankruptcy, you may choose to keep property with liens, such as your mortgaged home, as long as you make payments under your payment plan.
- Extend the terms of some debts – Payment plans under Chapter 13 last between three and five years. You can effectively extend the repayment periods on any debt that would come due before the end of your Chapter 13 repayment plan.
- Lower the impact on your credit report – Chapter 7 bankruptcy remains on your credit report for 10 years, but Chapter 13 bankruptcy is removed from your credit report seven years after the filing date.
- Make refiling for bankruptcy possible – As a general rule, you cannot file for Chapter 7 bankruptcy if you filed for either Chapter 7 or Chapter 13 bankruptcy within the last six years. However, if you find yourself in financial trouble again after completing Chapter 13 bankruptcy, you are allowed to file another Chapter 13 bankruptcy. Also, if you paid at least 70 percent of your unsecured debts during your Chapter 13 bankruptcy, you would not have a six-year bar on your ability to file for Chapter 7 bankruptcy.
The biggest benefit of Chapter 13 bankruptcy in Ohio courts is a discharge of your remaining eligible debts at the end of your repayment plan. That can give you a fresh start on your finances.
What to Expect in a Chapter 13 Bankruptcy Process
The Chapter 13 bankruptcy process involves these steps:
- You must attend a credit counseling course within 180 days prior to filing your Chapter 13 petition.
- You must prepare your petition on forms provided by the court. To avoid having your petition rejected, you should confirm what paperwork you need to file.
- You must present a proposed repayment plan to the court within 14 days of filing your petition. The court will hold a hearing to determine whether your proposed plan meets the requirements of the Bankruptcy Code. The court will hear any objections that your creditors have to the plan.
- The court will appoint a trustee who will collect your payments and disburse funds to your creditors. Your creditors must cease all efforts to collect on debts covered by the plan as long as you comply with its terms.
How Does a Chapter 13 Repayment Plan Work?
Your Chapter 13 repayment plan lays out how you propose to repay your creditors. After you submit a proposed plan to the court, the judge and your creditors will review your plan and may raise objections to details of your plan and seek revisions.
In the repayment plan, your debts will fall into one of three categories:
- Priority debts, which must be paid off during your plan. Those debts include back taxes and child and spousal support payments.
- Secured debts, which you usually must pay back in full. Examples of debt in this category include a home mortgage and a car loan.
- Unsecured debts, which in many cases aren’t paid in full by the end of the repayment plan. Instead, outstanding balances are discharged and voided by the court. These debts include personal loans, credit card debt and medical bills.
How Long Does Chapter 13 Bankruptcy Take?
The Chapter 13 bankruptcy process begins once you file a petition with your local bankruptcy court. Within 180 days prior to your filing, you must take a credit counseling course from an approved agency.
In most cases, within 95 days of the filing of your Chapter 13 bankruptcy petition, the court will approve your proposed repayment plan. Approval of the plan can take longer if your creditors object to the proposed plan.
Once your plan is approved, the Chapter 13 repayment process will last between three and five years, depending on your income level. Once you’ve made all required payments under your repayment plan, the bankruptcy court will grant you a discharge of the remaining eligible debt. Your bankruptcy proceeding will come to a close.
Debt Consolidation vs. Chapter 13 Bankruptcy
Under Chapter 13 bankruptcy, your bankruptcy trustee collects the payments you make under your repayment plan. That money is disbursed to your creditors. Essentially, Chapter 13 bankruptcy functions as a form of debt consolidation.
On the other hand, traditional debt consolidation involves obtaining a new loan to pay off the balances on multiple accounts. The new loan consolidates your debt into one payment. Debt consolidation loans are typically offered at a lower interest rate than what you are paying on your outstanding debts. However, a debt consolidation loan may take more time and money to repay than the original credit agreements.
Chapter 13 bankruptcy gives you protection from collection efforts while you make payments under your plan. If you can’t consolidate your outstanding debt with a debt consolidation loan, the remaining creditors can still seek repayment or pursue collection efforts. If you default on your new debt consolidation loan, the bank will also pursue collection efforts.
How Our Chapter 13 Bankruptcy Attorney Can Help You
Filing for Chapter 13 bankruptcy is a serious and complex option for people who want to resolve their crushing debt. A Chapter 13 bankruptcy lawyer from Amourgis & Associates can help you with the bankruptcy process. An attorney can:
- Help you explore alternatives to Chapter 13 bankruptcy, such as loan restructuring or debt consolidation loans.
- Prepare your bankruptcy petition paperwork.
- Draft your repayment plan proposal.
- Advocate on your behalf when creditors object to your repayment proposal and help you make revisions when necessary.
If you are considering filing for Chapter 13 bankruptcy, schedule a free, confidential, no-obligation initial case evaluation today. Contact an Ohio Chapter 13 bankruptcy attorney from Amourgis & Associates, Attorneys at Law.
We can tell you more about your legal rights and your options for dealing with your debt. We can put you back on the path to financial health. Our firm is conveniently located at six offices in Ohio – Akron, Cincinnati, Independence (Cleveland), Columbus, Beavercreek, and Canfield.