Sometimes debt becomes too much to handle.  The bills keep piling up, and a family’s income is just not enough to stay afloat.  When there is a very real danger of losing your house, your car, and other possessions, bankruptcy may be your last refuge.

Almost anyone can file a bankruptcy petition as a last resort for debt settlement.  However, it is not a decision that should be taken lightly.  Bankruptcy should be considered the last option because there are several consequences to filing bankruptcy.  Bankruptcy can affect your credit, and may make it difficult to obtain credit in the future.

There are two common types of bankruptcy;

• A Chapter 13 bankruptcy lets you arrange a payment plan with creditors over a period of time.  This type of bankruptcy usually in effect for 3 to 5 years.
• A Chapter 7 bankruptcy permits you to erase most of your unsecured debt, if you qualify.

There are several reasons why you should hire a Bankruptcy lawyer.  Each type of bankruptcy has different rules.  These rules regard which bills can be erased, the length of time allowed for repayment, and what property you are allowed to keep.  It is a good idea to consult with an attorney to find the best solution for your individual situation.  Often, the attorney can help you find ways to fix your debt problems without filing bankruptcy.

According to the law there must be specific intervals between bankruptcies.  Below are some guidelines for how much time must pass before a debtor can file an additional bankruptcy;

• A Chapter 7 bankruptcy may be filed 8 years after a previous Chapter 7 bankruptcy.
• A Chapter 7 bankruptcy may be filed 6 years after a previous Chapter 13 bankruptcy.
• A debtor can file a Chapter 13 two years following a previous Chapter 13
• Finally, a debtor can file a Chapter 13 four years after a filing a previous Chapter 7 bankruptcy.

Filing Bankruptcy

After a debtor has consulted with their attorney and has made the decision to file bankruptcy, the attorney will file a bankruptcy petition.

The bankruptcy administrator- known as a trustee- examines the debtor’s purchases and debts.  The trustee will also review the value of all assets.

Filing Bankruptcy Jointly

There are several factors to consider if you wish to file a joint bankruptcy.  First, only married couples may file jointly.  If a couple is divorced then any bankruptcy needs to be filed individually.  Unmarried couples must also file individually.  Often unmarried or divorced individuals may share a debt, or will have co-signed on a loan.  If one of these individuals files bankruptcy, the debt may become the responsibility of the other party.

Creditors and Debt Collection

Creditors will continue to attempt to collect debts until a bankruptcy petition has been filed.  Once the petition has been filed, the bankruptcy court will send a written notification, along with a case number and the date filed, to all creditors.  Once this notification has been sent the law authorizes legal action against any creditors who continue to attempt debt collection.

Creditors can discuss the terms of a bankruptcy with a debtor.  The court sets a date for a meeting between creditors and debtors for this purpose.  The court also sets a deadline for objections to the debtor’s filing.

Debt Settlement

There are two types of debt concerned with bankruptcy; secured and unsecured.  Secured debt is any debt which uses personal collateral to secure a loan or credit line, such as a car or home loan.  Unsecured debt is a debt which has not been secured by an asset, or has no collateral.

There are certain types of debt which cannot be relieved by a bankruptcy.  Below are several examples;

• Child support and alimony
• Local, state and federal taxes (dependent on certain circumstances)
• Financial obligations due to a death or injury caused by the debtor while driving under the influence of alcohol or drugs
• Debt due to fraud
• Intentional harm caused to individuals or property by debtor
• Student loans sponsored by the government, except in cases showing undue hardship
• New debt, acquired after filing bankruptcy

Recovering from Bankruptcy

A bankruptcy stays on record for up to ten years.  A debtor cannot remove this bankruptcy from their record, though they can file a letter explaining the circumstances which led to bankruptcy.  While it is true that filing bankruptcy may damage your credit, it is not impossible to once again achieve good credit.  Also, the bankruptcy ceases to have an impact on your credit score after the ten years has expired.

An attorney is an invaluable resource for information on how to recover from bad credit.  Some companies claim to help a debtor re-establish good credit, but these services cost more money than they’re worth.  It’s always a better decision to build your credit through good practices, and by renewing relationships with creditors, than through any potential quick fix.

How to File for Bankruptcy in Ohio

Once you have consulted with an attorney, and have decided that bankruptcy is the right decision, there are a few things you will need to collect before you file:

• An inventory of all your past and current debts
• A list of all your assets and liabilities
• Your financial statements

The information found within these documents will be included in the bankruptcy petition.  Any omissions within this information can be considered perjury, so it is important to include everything.

The bankruptcy lawyers at O’Connor, Acciani & Levy Co., LPA can help you navigate the complicated bankruptcy process and guide you in choosing the best way to achieve debt relief, either through personal bankruptcy or using other methods of debt relief.  Call O’Connor, Acciani & Levy at 513-842-9029, or toll free at 877-288-3241 for a free consultation with a bankruptcy attorney today.

You can also fill out our free, no-obligation bankruptcy evaluation to see if bankruptcy is the right choice for your situation, or if other methods of debt relief would be better for you.

O’Connor, Acciani & Levy Co., LPA is a debt relief agency.