Ohio Bankruptcy Law
The state of Ohio follows bankruptcy laws that closely reflect the laws of other states. Most states follow the federal laws of bankruptcy, but many states differ in the number of exemptions they allow. Many of the laws surrounding Ohio bankruptcy don’t try to stop a person from filing. Instead, the laws are there to help people through a tough economic period. Yes, person’s credit will absolutely suffer during the time of Ohio bankruptcy, but the action can actually save a person’s credit over a longer period of time.
Like in most other states, a person must attend a credit counseling course six months before filing for Ohio bankruptcy. Also, before a settlement is reached, a person must show evidence of attending a debtor education course.
Ohio Bankruptcy : Personal and Corporate
Individuals, families, and corporations can file for Ohio bankruptcy under federal and state laws. If a family is choosing to file for OH bankruptcy, they will file under Chapter 7 or Chapter 13 in most cases. If a corporation is facing a tough economic period, they will file Chapter 11.
OH Bankruptcy : Chapter 7
If a person contains an outstanding amount of debt and has limited sources for income, they may try to file for Chapter 7. The type of bankruptcy is often referred to as liquidation because a person is left with a clean slate after a creditor collects any number of assets.
Before a person file for Chapter 7, a judge and creditor must establish if the person can or cannot make structured payments over the next years to decrease their debt. The state of Ohio has a fairly large rate of unemployment (in the upper-second tier) at 10.1% and an average household income of $45,151. If a person’s wages fall below the state average and they can’t possibly make structured payments, they are usually entitled to Chapter 7 and may qualify for the following exemptions:
• One home and $5,000 in equity
• One automobile
• Business property partnership
• Clothing less than $200 per item
• $1,500 in other personal property
OH Bankruptcy : Chapter 11
If a corporation is facing economic instability, they can choose to file for Chapter 11 bankruptcy. The measure gives the company a chance to restrategize and gather up their finances. Although there are not personal assets at stake in Chapter 11, the corporation’s stock will undoubtedly be affected.
OH Bankruptcy : Chapter 13
If a person has a steady income and wants to keep their home in the wake of foreclosure, they may choose to make monthly payments toward a percentage of their debt for the next three to five years. If the amount of debt is large, a judge and creditor will often make a family pay 25% of the debt over the next three to five years.
A creditor may collect state and federal tax returns in a Chapter 7 if the funds are significant. The tax returns are seen as valuable asset, but a family can usually keep the funds if they opt for Chapter 13.
Filing for Ohio Bankruptcy
Although you have the choice of going through a state filing service, it’s always a good idea to hire a lawyer. An attorney can help you with submitting documents, files, and a number of fees. They can also advise you when you are meeting with creditors, and they will often try get you the best settlement possible.