How Often Can I File Bankruptcy For Bankruptcy Relief?
The right to file bankruptcy is found in Article 15 of the United States Constitution. Bankruptcy laws are enacted by the Federal Government and are federal cases under federal bankruptcy laws. . This means the statue for Ohio is the same as it is for the other 49 states, with certain exceptions.
The law has two chapters for personal bankruptcy relief, known as Chapter 7 Liquidation and Chapter 13 Reorganization. For chapter 7, a person cannot have debts discharged under this chapter again until eight years after the date of filing of an earlier chapter 7 case under which a person received a discharge. A person cannot seek relief under Chapter 13 for 4 years after filing under chapter 7 and cannot file a new 13 to receive a discharge unless at least 2 years has passed since a prior filing under which a discharge was obtained.
What is controlled by State Law is the exemptions to which a person is entitled because Ohio is an opt out state from the federal exemptions. In Ohio, most people can retain most or all of their assets and receive a discharge under Chapter 7.
Federal law imposes median family income on debtors seeking relief, who have to complete a Means Test analyzing their income for 6 months prior to filing. Median family income differs by State, and increases gradually by family size. In Ohio, median family income for a single person is approximately $43,000, while median family income for a four family household is approximately $75,000. These figures are based on IRS guidelines and are updated periodically. If your income exceeds this amount for your family size your case is subject to heightened scrutiny by the United States Trustee and you may have to file under chapter 13 if you make too much money. But you can still receive a discharge under chapter 13! See below for more information about chapter 13.
Under Chapter 7, a person is seeking a discharge of their unsecured debt and not to repay the debt over time. The entire chapter 7 case takes approximately 120 days to complete, and a court appearance with counsel generally occurs about 30 days after filing. A person is ineligible for another discharge under chapter 7 for a period of 8 years from the date of filing of the prior chapter 7 case.
Under Chapter 13 reorganization, a person is seeking a discharge of a portion of their unsecured debt and to repay certain debts for which they have pledged collateral which they wish to retain. People who file for this type of bankruptcy either make too much money (over the threshold for chapter 7) or have assets they want to keep which they might lose under chapter 7, or to cure arrearages on things like child support and or income taxes, and reinstate on mortgage arrearages over time. The Debtor, through counsel, proposes a budget they can live with and a payment to the court which will reorganize them over 36 to 60 months. Once the plan is confirmed, the debtor makes monthly payments to the trustee who in turn repays the creditors the necessary about and a discharge of the remainder of the unpaid debt is discharged upon completion of payments under the plan.
Under chapter 13, a person can avoid and release an unsecured second mortgage and can cram down car loans because a person is afforded a broader remedy under chapter 13 than chapter 7.
If a person starts a chapter 7 case they can convert to chapter 13 if eligible for a discharge and if a person files a chapter 13 bankruptcy, they can convert this to a chapter 7 if they are eligible for a discharge under chapter 7. Bankruptcy can be a wonderful opportunity to take responsibility for your financial affairs and get a fresh start needed for a positive financial future!