Steps in an Ohio Bankruptcy We all know that seeing the forest helps us recognize the trees, so it's probably a good time to consider the significant steps you'll take during your bankruptcy journey. Exempt and nonexempt property. You can keep property protected by an exemption or "exempt" property.
When a bankruptcy exemption doesn't cover the property, you'll either lose it in Chapter 7 or have to pay for it in the Chapter 13 repayment plan. Choosing state or federal exemptions. Unlike some other states, you can't choose between the state exemption list and the list of federal bankruptcy exemptions. You must use Ohio's exemptions. But you can use the federal nonbankruptcy exemptions.
Doubling exemptions. Spouses filing together can double the exemption amount unless noted otherwise. COVID recovery rebate exemption. You might be able to protect stimulus payments, tax credits, and child credits in bankruptcy with the federal recovery rebate exemption.
Retirement accounts all filers can protect. Learn more about retirement accounts in bankruptcy. Ohio Bankruptcy Exemptions Here are some commonly used Ohio bankruptcy exemptions. Ohio Homestead Exemption A homestead exemption protects your home from creditors. But if your car is financed, you'll have to meet other requirements. Learn more about the motor vehicle exemption and protecting cars in bankruptcy. Ohio Wildcard Exemption A wildcard exemption allows you to exempt any property of your choosing.
Learn how to add a wildcard to another exemption and protect even more. Preventing Bankruptcy Exemption Problems Exempt your property carefully. Qualifying for Bankruptcy in Ohio If you've never filed for bankruptcy before, you'll meet the initial requirement.
You'll also need to meet specific chapter qualifications. To qualify, you'll pay the larger of: your priority nondischargeable debt the value of nonexempt property , or your disposable income. Hiring a Bankruptcy Lawyer in Ohio Most people find it worthwhile to get counsel. A bankruptcy attorney will help you: qualify for the chapter of your choice determine when it's time to file help you keep the property you want make sure you don't run afoul of fraud or other issues, and explain when you can stop paying the bills you'll erase in your case.
Filing Your Bankruptcy in Ohio Now that you've decided to file, the fun begins! Bankruptcy forms. You'll find free downloadable bankruptcy forms on the U. Courts website. Means test multipliers. Go to the U. Trustee's webpage to get the figures needed to complete the means test. Education providers. The bankruptcy trustee's website also lists approved counseling providers. Individuals must complete credit counseling during the days before filing for bankruptcy and a debt management course after filing the bankruptcy case.
Ohio Bankruptcy Court Locations Your case starts when you file your paperwork with the local bankruptcy court and either pay the filing fee or request a fee waiver. Seiberling U. Canton, Ohio Howard M. Here's what will happen next: You'll turn over financial documents proving the statements in your bankruptcy paperwork.
You'll attend the meeting of creditors —the one appearance all filers must attend. You'll complete a debtor education course and file the completion certificate. Need More Help? Updated July 12, Talk to a Bankruptcy Lawyer Need professional help? Start here. Where the debtor files a petition with the courts, such is required to submit a debt reorganization proposal within four months of filing the petition.
The court however may extend the period at its discretion. Where the debtor fails to submit a reorganization proposal within the specified timeframe, creditors or other third parties such as shareholders may propose an alternative restructuring plan. Filing a Chapter 11 bankruptcy also known as reorganization bankruptcy gives debtors certain benefits which includes. Chapter 11 bankruptcy is best suited for businesses filing for bankruptcy.
Chapter 7 bankruptcy, also known as liquidation bankruptcy, provides a workable structure for Ohio residents to clear their debts by liquidating non-exempt properties. Examples of non-exempt properties include rental properties, jewelry, and cars. The trustee is required to liquidate the debtor's assets and distribute the proceeds to the creditors.
Eligibility for Chapter 7 bankruptcy in Ohio is determined by the income level of the debtor. Debtors filing for Chapter 7 bankruptcy after May 1, , are required to have an annual income that is below the median income in the state. Where a debtor's earning is above the state's median income, the debtor is required to provide proof that the available disposable income after all living expenses have been paid, will not cover the debt.
To file for Chapter 7 bankruptcy, interested persons may be required to fill bankruptcy forms, evaluate their assets, enroll and complete a credit counseling program, and meet the eligibility requirement. Filing a Chapter 7 bankruptcy in Ohio is beneficial to debtors in so many ways some of which includes:. Note: some debts may not be discharged after filing a Chapter 7 bankruptcy. Examples of non-dischargeable debts include student loans, child support, taxes, as well as alimony.
In Ohio, Chapter 13 bankruptcy , also referred to as "wage earner's bankruptcy" is a type of bankruptcy filed by regular income earners and sole proprietors to develop a debt repayment plan for some or all their debts. Large corporations and businesses are not eligible for this type of bankruptcy. The repayment plan proposed by debtors can run for a year period. However, the specific duration for repayment depends on the income of the debtor.
Debtors filing for Chapter 13 bankruptcy are allowed to retain their assets while debt repayment is made from current and future income based on the repayment plan approved by the courts.
The eligibility for a Chapter 13 bankruptcy is determined by the amount of debt owed. This amount is adjusted based on the current cost of living. Other requirements for eligibility include:. While Chapters 7 and 13 bankruptcies share some similarities, they are different in so many ways.
The differences are as follows:. Ohio bankruptcy protection is a court order issued by a bankruptcy court to creditors to stop further actions to recover a debt after a debtor files for bankruptcy.
This court order is also known as automatic stay judgment. Bankruptcy protection buys individuals, companies, and businesses time to come up with a debt repayment plan. Creditors are by this order mandated to pause debt recovery actions such as repossession, garnishments, harassment, incessant calls, and text messages, as well as legal actions.
Non-compliance to the court order on the part of the creditors may attract sanctions. Ohio bankruptcy exemptions serve as protection to debtors filing for bankruptcy from total liquidation of all assets. Some assets are labeled "exempt" and are not liquidated to repay debts. In some states, debtors filing for bankruptcy are allowed to choose either state or federal bankruptcy exemptions.
This however is not the case in Ohio. Residents who have lived in the state for a minimum of two years are required to use only the state bankruptcy exemptions. Some of the items under the state exemption list include:. Other exemptions in the state of Ohio include burial plot, cash, tax refund, clothing, health aid, insurance, saving plans, and wages. Aside from Chapter 7, 11, and 13 bankruptcies, Ohio residents may also file for Chapter 12 bankruptcy. Properly applying the exemptions is critical to protecting your property.
Remember, the exemption applies, of course, only to equity. These are just the highlights of the personal property issues that arise in bankruptcy. The official form lists over 20 separate categories of property that must be disclosed as well as a catchall provision for any other property not listed in a category. These schedules contain a list of all of the creditors that you have the time or cases filed.
Is for secured creditors, like cars and houses, large purchases. Examples would be a car loan or a house loan. The lien attaches to all property that you own that exists in the county where the lien is filed. Sometimes these liens can be removed in bankruptcy through litigation referred to as a lien avoidance action pursuant to 11 USC f. Is where you are required to list priority creditors, typically tax creditors. It is important to note that although student loans are not discharged in bankruptcy, they must be listed on Schedule F because of there unsecured and not priority creditors.
Also, if you owe child support, you should know that person receiving the sport will also receive a notice of your bankruptcy filing. Child support obligations as well as other mandatory notice addresses are listed in this schedule. Contains all the unsecured debts like credit card debt, unsecured loans, personal loans, payday loans, medical bills, and other debts that you owe, but for which there is no security for the debt.
It is important to be as complete as possible when listing debts on Schedule F. You need to include any collection agencies that the debt may be assigned to and any attorneys attempting to collect the debt. If you fail to notify the collection attorneys, they will not know that you filed bankruptcy yourself and may continue to collect from you or even sue you. The discharge of unsecured debt is the most important aspect of improving your financial situation. On this schedule you will indicate whether you intend to continue to pay or you want to not pay executory contracts and unexpired leases.
If you are renting an apartment, you might wish to move and reject the balance of the apartment lease and not pay it. The debt will be discharged in your bankruptcy. Automobile leases are frequently seen in bankruptcy. It is my general advice that it is often a good idea to let the automobile go back to the creditor if it appears that you will owe a large sum of money when your lease ends.
On the other hand, if it appears that you will not owe for over mileage or damage at the end of your lease, or you might even wish to purchase the vehicle at the end of the lease, then you would assume the automobile lease in your bankruptcy. Cell phone contracts, rent-to-own contracts, gym memberships are all examples of executory contracts which are listed in this schedule.
If you have a co-signer on any debt you owe, the co-signer information must be listed in the schedule. The co-debtor will receive notice of your bankruptcy filing. Everyone who files bankruptcy is required to disclose all sources of income. It is important to understand that even if you are filing individually, it must be disclosed if your spouse has income.
The only exception would be if the spouses are separated. Income is defined in bankruptcy as any income that you regularly receive. Therefore, a one-time gift would not be included, but if you had someone living in your home and was paying rent regularly then that income would be included as well.
When filing a Chapter 7, clients often want to know if their employer will be notified of their bankruptcy filing. Unless the employer is also a creditor, there will be no notification to the employer regarding the bankruptcy filing.
It is important to provide detailed income information on the bankruptcy petition. Income information is found here in Schedule I, and it is also found on form , the means test form. The gross income, and all of the deductions, have to be fully disclosed. In Chapter 7, for means test purposes, some deductions are disregarded on the means test form, although they may be included on a Schedule I.
For example, suppose you make contributions to a retirement plan or pay back a loan against a retirement plan. In that case, those payments or contributions are disregarded in the Chapter 7 means test formula. However, this is not how it works in Chapter 13, and the means test forms are different for the different chapters.
Self-employed people sometimes have particular challenges filling out the Schedule I. Gross income to a self-employed person might be reduced by business expenses necessary to generate income. Suppose the information is not clearly understood by entering it into the forms.
Pension income, Social Security, government existence, Social Security disability, short-term disability, and all other forms of income must be disclosed on Schedule I. It is important to note as well if you expect to have a change in income in the next 12 months. Current expenses include rent or home mortgage, utilities, home maintenance, food, clothing, and a list of other typical expenses.
Repayment of debt that is being discharged in the bankruptcy will not be listed on Schedule J. Student loan payments, even though not discharged, should not be entered on Schedule J. However, debt that will be reaffirmed, like a car payment, should be listed here. Note that there is no separate category of expense for savings.
For this reason there is no separate provision for maintaining a regular amount to be put into savings. If you pay health insurance yourself, not deducted from your pay, the monthly amount for health insurance is included here. Because the cost of medical expenses has recently increased significantly, I find that it is appropriate in many cases to add a separate expense line for ongoing medical expenses.
For example, suppose the family has ongoing medical expenses such that they know they will have to pay a large deductible every year. In that case, this fact needs to be disclosed on Schedule J. The statement of financial affairs provides information about the financial history of the debtor. It is the longest section of the bankruptcy petition. Depending on the answers to the questions in the statement of affairs, many more additional documents might be required for the trustee in Court to review.
For example, if you indicate transfers within the last 4 years, then the trustee may require you to provide all documentation related to the transaction for review. Here you will list all of your income for the last several years and provide W-2s, , Schedule C, financial reports, and any other information that is relevant to the income you have received from these sources for the last two years.
Income from other than employment or operation of the business would be income from Social Security, SSI, pension, food stamps, child support, rental income or any additional income stream.
These types of payments might be recovered by the trustee and the money brought back into the bankruptcy estate so that it can be distributed to your creditors. The section can be particularly difficult because family members and friends will often have loaned money to or paid debts for a person who files bankruptcy in the year before they file.
It is very common to see payments made to these insiders in the year prior to filing bankruptcy. It is precisely because insiders will likely be paid instead of unrelated creditors that the rule exists for the one-year look-back. All lawsuits need to be disclosed as well if they have been active in the last year. Sometimes consumers are not aware that they have been sued.
If there is any doubt about whether or not a lawsuit has been filed it is a good idea to check with the local courts to see whether or not a lawsuit has been filed. Sometimes clients are surprised to learn that they have been sued and judgment taken against them without their knowledge.
Generally speaking, if money has been taken from a debtor by a garnishment of wages or bank account or attachment of bank account prior to the bankruptcy filing, the debtor cannot recover it. However, if there is an ongoing garnishment, then any money taken from the debtor after the date of the filing of the bankruptcy must be returned to the debtor.
If a repossession or foreclosure has taken place, it is quite likely that there is a deficiency that is still owed to the creditor. Even if the creditor is not currently requesting any payment, it is important to list the creditor for any repossession or foreclosure our return, even if voluntary, so that the debt can be discharged.
Occasionally there is money owed to the debtor after a foreclosure or repossession. If this is the case, the trustee will be entitled to the money, not the debtor, as everything owed to the debtor becomes property of the bankruptcy estate and subject to the control of the trustee.
Gifting large sums of money prior to filing bankruptcy is likely to draw increased scrutiny by the Court. Contact us today. It is in constant change, and some of its changes may require you to update the terms of your will.
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