Ohio chapter 13 bankruptcy
Bankruptcy One situation which any one would hate to experience, but, given the realities of life, almost every poor and middle class employee is forced to face this glut because of the meager earnings and high inflation. In that case, there is an option of filing Bankruptcy under the chapter of 7 but many would not like to take up this recourse as dealing with chapter 7 means that you are putting all your assets in the hands of the arbitrator with very less for yourself to be left with.
The beautiful small house which you have built in Adams Township, Clinton County some 4 years back when you received your pay bonus, the small car which you purchased for going on a happy drive, with your kids at the back seat, they all mean a lot of sweet memories to you. But, those memories are worth not a single penny to the arbitrator. The diamond pendant which your loved one has presented to you on your birthday is just a form of an asset to the arbitrator and he would never hesitate to sell it away to repay money to your creditors. He would not be bothered about the heart break which you would feel if that small loving piece were sold. For this reason, not only you, many others also, would not like to opt for Chapter 7 even if the authorities guarantee for a debt free life.
The main reason being that those reminiscences attached to those assets (in business sense) are invaluable for you and you cannot bear a price tag being ticked on them. How, you wished that there is recourse in bankruptcy law which would allow you to retain your favorite assets with you and repay your debts with reduced interest for an extended period of time! How you wished that the creditor would not knock on your door when you do not have enough money to repay him but are confident that after two weeks, you can honor that installments. If that is the situation you are facing and if you are a resident of Ohio, then Chapter 13 of the Bankruptcy law can come to your rescue.
Chapter 13 of the Bankruptcy in Ohio deals with debt adjustment so that you get ample time (3 to 5 years) to re-adjust your payment obligations and thereby honor the repayments. The advantages of applying to Ohio chapter 13 instead of chapter 7 are:
You can retain your equity in any house or any other land up to the maximum extent of $5,000.
Jewelry of worth $200 per item and one item of $400 can be retained with you. So you have a chance to sustain some of the valuable memories with those intricate pieces.
Any motor vehicle equity to the extent of $1000 can be retained.
Insurance benefits, Disability benefits, Benevolent Society benefits, pension benefits, bank and secured deposits in the form of cash which are due within 90days are exempt to the maximum benefit of $400 on a total.
Receipts pertaining to any personal injury recoveries which have been received within 12 months from the date of filing the Chapter 13, are exempt to the maximum of $5000.
Cost of filing a case is only $185 in chapter13 as against $200 for chapter7.
In this way, chapter 13 helps you in retaining the lifes basic credits in comparison to the chapter7 which hardly leaves anything in your hands for the future. However, you need to meet certain eligibility conditions to apply for chapter13 of the Bankruptcy law. The prima facie eligibility conditions can be stated thus:
1. You need to have a regular source of income and that income should be sufficient your family needs and some more money should be available at your disposal to repay the re-structured cash commitments.
2. Your creditors should at least receive what they would have got only if Chapter 7 was applicable in your case.
Once you are granted the eligibility of chapter 13, and if you stick to your repayment commitments (decided according to your capability) for the 3 -5 years period regularly, there is every chance that all the remaining outstanding balances would be forgiven and you could be debt free after 5 years.
But then, debt freeness is not bestowed on these types of loans:
Outstanding payments to minors, taxes etc. which are non-dischargeable and such types of loans should be repaid.
Property received due to some inheritance or insurance receivables which would be received by you within 180 days of your bankruptcy application would be used for the repayment purposes unless such payments are exempt.
Co-signers would have to repay their portion of outstanding amounts and there is no forbearance of payments for them.
Student loans and several federal outstanding payments should be honoured and relief in this case is available to you only if the repayment would impose an undue hardship to you or your dependents.
Your assets are vulnerable if they are collateral securities to your debts and as such those assets can be taken away by the respective creditors.
Effects of Bankruptcy chapter 13:
Your credit score would be affected for about 10 years and as such, you will not be issued specific credit card in future. You can be given a bank card or debit card and that has to be supported with your bank balance.
Public utilities houses may demand a deposit from your end for retaining their services to you.
However, there is one important benefit of chapter 13 as against chapter 7. Under chapter 7 you need to wait for 7 years for filing a second bankruptcy case, but there is no such clause in chapter 13 and you can file the case how many ever times you wish to do so.
Other Articles
