Most people struggle with finances from time to time. Sometimes, those struggles become too much to handle. When you can’t keep up with your payments and you find yourself constantly harassed by creditors, it might be time to consider filing for bankruptcy. Chapter 13 bankruptcy is a popular option. It allows you to retain ownership of many of your assets and consolidates your debt into one monthly payment that you pay over a three to five year period. Understanding Chapter 13 bankruptcy and the Ohio median income test can help you assess whether filing Chapter 13 bankruptcy is right for you.
Understanding Chapter 13 Bankruptcy
Bankruptcy laws are created by the U.S. federal government. There are several different types of bankruptcy in the United States, but only two are appropriate for managing individual finances: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is only an option for individuals under a certain income level. Chapter 13 bankruptcy is generally available to all individuals, regardless of income level.
Chapter 13 bankruptcy doesn’t automatically lead to the discharge of your debt. Instead, it involves committing to a repayment plan. Over the course of three to five years, you make regular payments that go toward partially paying off your outstanding debt. At the end of that time period, if you remain in good standing by making on-time payments, your remaining debt can be discharged.
Chapter 13 bankruptcy won’t forgive all types of debt, but it can help clear the most significant sources of personal debt, such as credit card debt and medical debt. It can also help you get caught up on mortgage and auto loan debt so you can retain ownership of your home and vehicle. Chapter 13 bankruptcy typically won’t forgive debt related to alimony, child support, and criminal fines.
Ohio’s Median Income and the Means Test
If you’re considering filing for bankruptcy in Ohio, there are two important tests you need to understand. These are the median income test and the means test. The means test is used to determine whether you qualify for Chapter 7 bankruptcy. It weighs your current income level against your outstanding debt to determine whether a repayment plan would be feasible given your financial situation. If your income is below a certain level, committing to a repayment plan might not be possible. In this case, Chapter 7 bankruptcy might be the better option. However, Chapter 7 bankruptcy sometimes entails having to give up personal assets such as your home and vehicle.
If the results of the means test indicate that you make too much to qualify for Chapter 7, your only option for bankruptcy is Chapter 13. Chapter 13 bankruptcy entails the creation of a debt repayment plan. Under Chapter 13 bankruptcy, Ohio’s median income test is used to determine how many years you’ll have to pay.
The process of creating Chapter 13 repayment plans in Ohio begins with comparing income over the past six months to the median state income. If your income is at or below the state median income, you’ll probably qualify for a three-year plan. If the median income test shows that your income over the past six months exceeds Ohio’s median income level, you’ll probably be put on a five-year repayment plan.
It’s worth noting that in the course of identifying an appropriate payment plan, the courts will consider your income level and your assets. If your income is above a certain level, the courts may decide that you have sufficient income to pay off your debts outright.
Considering filing for Chapter 13 bankruptcy in Ohio? Speak with the experienced Ohio bankruptcy lawyers at Fesenmyer Law Offices, LLC by calling 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati).
Should You File for Chapter 13 in Ohio?
Filing bankruptcy can be a life-changing decision. When your financial situation is overwhelming, Chapter 13 can be a practical way of regaining control of your finances and ensuring they don’t get out of control again in the future. However, the choice to file bankruptcy, as well as choosing which type of bankruptcy to file, are major decisions with a long-term financial impact.
You should always take the time to consult an experienced bankruptcy attorney before you make life-changing decisions about your finances. An attorney will start by reviewing your financial situation. In many cases, an attorney finds that filing for bankruptcy isn’t necessary to get debt under control. A lawyer may be able to help you with debt negotiation, restructuring, or other financial strategies that will allow you to avoid the need to file bankruptcy.
Personal finances are always unique. You can consult our experienced Ohio bankruptcy attorneys for personalized advice on whether Chapter 13 bankruptcy is the right way to handle your debt.
If an experienced lawyer advises you that bankruptcy is the best path forward in your situation, they’ll help you understand which types of bankruptcy you qualify for in Ohio and which is best given your situation. Your bankruptcy attorney will walk you through the process of how to get started filing Chapter 13 bankruptcy in Ohio. This process includes completing legal paperwork, submitting court documents, and negotiating with your creditors. A lawyer can have a substantial positive impact on the terms of your Chapter 13 debt repayment plan. They also ensure you fulfill any additional obligations, such as completing the obligatory credit counseling courses.
Speak With Our Ohio Chapter 13 Bankruptcy Lawyers Today
Fesenmyer Law Offices, LLC is a personal bankruptcy law firm with a long track record of successfully helping clients regain control of their finances. Our firm serves all of Ohio, with offices in Columbus, Cincinnati, and Dayton. Our experienced bankruptcy attorneys are available to help review your current financial situation and identify the best path forward. Don’t wait to get help tackling your debt and taking charge of your finances once more.
If you’re feeling overwhelmed by your finances, we can help. Call Fesenmyer Law Offices, LLC at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) to speak with one of our experienced Ohio bankruptcy attorneys.
