5 Reasons to File for Chapter 13 Bankruptcy in Ohio
Filing for Chapter 13 bankruptcy in Ohio is a major step that requires careful consideration. Although there are a wide range of reasons that people file for bankruptcy protection, here are the top five reasons to consider filing when filing for Chapter 13.
Immediate Relief from Creditors
Bankruptcy has several benefits, but one of the most advantageous for filers is the automatic stay. Once the necessary documents are filed with the court, an automatic stay is put into place. The stay prevents creditors from taking any actions until a court has had an opportunity to review the filer’s debts. The stay will often stay in place during the course of a Chapter 13 case, but there are instances where it can be lifted.
The stay could stop a repossession, eviction, and foreclosure. Creditors even have to stop calling and any other threatening communications with the filer. There are some exceptions to the stay that should be discussed with an experienced attorney at Zellar & Zellar, Attorneys at Law, Inc., before filing.
To Avoid Liquidation of Possessions
In a Chapter 7 bankruptcy, a trustee assesses the value of a filer’s assets and sometimes sells them to pay off some of his or her debts. In a Chapter 13 filing, the filer can retain possession of his or her assets, if said assets are not protected by exemptions. The filer is required to submit a repayment plan that details how he or she plans to repay creditors. The monetary value of said assets that are free and clear but not protected by an exemption, must be paid into the plan.
Filers who were on the verge of losing their homes, cars, and other assets to creditors have a better chance of keeping them. Most creditors are willing to accept the repayment plan and even renegotiate the terms of the original credit agreement to allow for retention.
Some Debts Are Discharged
Not all debts have to be repaid in a Chapter 13 filing in Ohio. Some debts can be discharged, which means the filer will no longer be responsible for repaying them. Discharged debts are usually unsecured debts that are not tied to collateral, such as credit card debts. Unsecured creditors who do not file a timely claim in the Chapter 13 case are discharged upon successful completion of the plan.
Co-Debtors Are Not Left with the Debt
If a person chooses to file for a Chapter 7 and his or her obligation to a debt is discharged, the creditor could still pursue payment from a co-debtor. With a Chapter 13 filing, the co-debtor is not stuck with the obligation. As long as payments are being made on time, the co-debtor is financially and legally safe from the creditor.
Economic Fresh Start for the Filer
Filing for Chapter 13 in Ohio gives the debtor a chance to repair his or her credit. The economic fresh start would be otherwise difficult to obtain without the help of bankruptcy. Instead of facing financial ruin, a person could start over with a clean slate.
The time spent on the repayment plan also gives a filer a chance to learn how to better manage money and to plan for his or her financial future. He or she can also learn ways to avoid financial problems in the future.
Contact an experienced bankruptcy attorney at Zellar & Zellar, Attorneys at Law, Inc., to further explore the reasons to file for a Chapter 13. You can also learn about how to get the process started. Call today to schedule your free consultation.
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