Ohio Bankruptcy Laws should be known by every resident of the state of Ohio. Credit card companies have intensified their campaign for consumers to avail of the best offers they have. Consumers who want a convenient way to purchase usually end up having 5 or more credit cards, the downside of this is that should there be any unavoidable circumstances, you will surely fail on your payments. When your debts become too unbearable to handle, you might consider applying for bankruptcy protection. Bankruptcy laws are part of the federal court system’s jurisdiction; however, Ohio bankruptcy laws also provide for unique set of rules that are only applicable to the state of Ohio.
While it may be easy to come up with the decision to file for bankruptcy, it should not be taken lightly. The bankruptcy process is complex and it takes more than just the mere reason of drowning in your debts to qualify for either of the bankruptcy protection programs open for application. Plus, the laws defining the eligibility of a debtor to avail of bankruptcy are labyrinthine, and the rules recently passed in 2005 made it even more complicated.
For debtors who want an easy way out of their debts, they opt to file for Chapter 7 bankruptcy protection. This type is also called liquidation bankruptcy because debts that are classified as dischargeable can be liquidated and you can start anew with your finances. The drawback of this bankruptcy type is the possibility of non-exempt assets to be seized for payments of your debt. The trustee assigned to your case will take charge of liquidating your non-exempt assets, sells it, and the proceeds will be divided among the debtor’s creditors. Whatever is left of your dischargeable debts after the payment will be erased based on the trustee’s judgment. When all is said and done, you still get to keep your house, car, and some personal belongings when you start to rebuild your credit rating.
The other option available for debtors is Chapter 13. This option best applies to debtors who want to protect their assets and those with regular high income who will not qualify for Chapter 7’s criteria. Chapter 13 or also known as the debt restructuring program will help debtors through a repayment plan approved by the court outlining the payments that should be made monthly through the trustee to pay for all debts owed in a period of 3 to 5 years. The trustee’s job is to collect the monthly fund of the debtor to distribute it to the creditors based on the structure organized by the bankruptcy courts.
The federal court system has defined the assets protected from the creditors. Ohio bankruptcy laws have also defined the list of exemptions specific for the state. The following assets are included as exemptions in Ohio:
• Your home worth $20,200;
• A vehicle up to $3,225;
• Cash worth $400;
• 75% of wages for 30 days;
• Refrigerator and cooking stove worth $300 each;
• Tools of the trade worth $2,025; and
• Other benefits like health aids, support payments, disability benefits, and public compensation.
Before a debtor submits the necessary paperwork and pays the filing fee, a credit counseling program should be completed 6 months prior to the formal application.