Chapter 7 is the most common form of bankruptcy and has certain advantages, but that doesn’t mean it is the best solution for you. Depending on your situation, Chapter 13 bankruptcy, which allows you to consolidate your payments and repay some or all of your debt affordably over a three- to five-year period, may be more advantageous.
How do you know which form of bankruptcy is right for you? If you are facing a situation where your debt is getting to be more than you can handle, there is help available. The experienced and compassionate Ohio debt-relief attorneys at Fesenmyer Law Offices, LLC can help you decide the best option for your individual situation.
Delaying can only make your situation worse, so call or contact us online today for your free consultation to receive valuable, personalized insights on debt relief, with no further obligation.
For a free initial consultation, don’t hesitate to reach out to a bankruptcy law firm that gets results. Contact Fesenmyer Law Offices, LLC today. Call 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) today.
What Is Chapter 13 Bankruptcy?
Chapter 13 is a consumer debt reorganization that enables debtors to repay financial obligations affordably in one monthly payment over a three- to five-year period. Chapter 13 allows you to repay a portion of your debt under better conditions and at lower interest rates than you originally had to pay.
Unlike Chapter 7, which can involve the liquidation of assets if they are over the exemption limits, Chapter 13 allows you to consolidate your payments to avoid fees and fines and to use future income to repay your creditors and keep your property. Debts that may be consolidated include secured loans such as mortgages and balances on vehicle loans, as well as unsecured debts such as credit card debt and medical bills.
For effective and tailored bankruptcy representation, Ohioans turn to Fesenmyer Law Offices, LLC.
Why People Choose Chapter 13
When private parties choose to pursue bankruptcy, they choose either Chapter 7 or Chapter 13 bankruptcy. Both can bring great relief to an individual. However, they are entirely different processes with different eligibility requirements. For one person, Chapter 7 may be the right choice, while for another, Chapter 13 holds the answer to their relief.
If You Aren’t Eligible for Chapter 7 Bankruptcy.
Not everyone is eligible for Chapter 7 bankruptcy. Ohio has a “means test” you must pass before qualifying for Chapter 7. There are also disqualifying factors that will make you ineligible for Chapter 7.
Generally speaking, you may not qualify for a Chapter 7 bankruptcy if:
- Your current monthly income over the six months before your filing date is more than the median income for a household of your size in Ohio.
- Your disposable income exceeds certain limits set by law.
- You have had a Chapter 7 bankruptcy dismissed within the past 180 days for fraud or other unlawful actions.
- You have filed for Chapter 7 within the previous eight years.
- You have filed for Chapter 13 within the past six years.
Other factors may influence your eligibility for Chapter 7. It is important to understand what they are. Meeting with an experienced bankruptcy lawyer will help clear up any confusion you might have.
You Want to Save a Home, Car, or Other Property from Foreclosure or Repossession
Chapter 13 bankruptcy is often the best choice for homeowners with more equity in secured assets than they can protect with Ohio exemptions and who wish to keep these assets. Chapter 13 allows you to keep property when you’ve fallen behind on your payment, by putting the payments into your monthly payment plan. The plan lets you make up the missed payments over time and keep your home or car. Chapter 7 bankruptcy allows you to keep only exempt property.
You Have Secured Debts That You Cannot Eliminate Through Chapter 7
Secured debt includes any type of debt that is secured with collateral, such as:
- Mortgages
- Auto loans
- Boat loans
- Building and shed loans
If you cannot or choose not to handle these types of debt in Chapter 7 (which could entail losing the underlying asset), you can choose Chapter 13 bankruptcy instead.
You Need More Time to Repay Debts
Once you file for bankruptcy, an automatic stay of collection efforts comes into effect, whether you file under Chapter 7 or Chapter 13. However, the difference in the duration of the stay between Chapter 7 and Chapter 13 is marked enough to make Chapter 13 a popular choice for those who need significant time to arrange repayment. This is because the stay in Chapter 13 cases is typically much longer than in Chapter 7 cases.
For example, Chapter 7 bankruptcy stays may only last for a few months, giving the filer little time to repay debts during the process. A Chapter 13 bankruptcy, however, might last a few years, which, for many debtors, is ample time to come up with and execute a plan for repayment.
You Have a Co-Debtor on a Personal Debt
Many who seek to file bankruptcy have co-debtors on some or all of their personal debts. When Chapter 7 is the choice of bankruptcy, it is important to note that creditors can and will pursue the co-debtor. However, this is not the case in Chapter 13 cases, as the debt is not erased but restructured under a new payment plan.
Contact Us for Help and Guidance
If you find yourself at a point where you are considering Chapter 13 or any other kind of bankruptcy, take the first step toward debt relief and contact us today for a free initial consultation.
During your consultation at Fesenmyer Law Offices, LLC, we will evaluate your entire financial situation and determine the best fit for your particular circumstances. We will make sure you are aware of all your options and help you decide on the path to a brighter future that makes sense in your individual case. We know the courts and the system and will walk you through the process every step of the way.
Delaying can only worsen your situation, so call or contact us online to set up your free consultation so we can determine what debt relief solutions will work best for you. Call 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) today.
