Top 7 Reasons People in Ohio Filed Chapter 7 Bankruptcy in 2017

Top 7 Reasons People in Ohio Filed Chapter 7 Bankruptcy in 2017

Nobody likes to be in a desperate financial situation. There are times when the only option available for someone is to file bankruptcy. This is a reality for many people in Ohio. One of the most common types of bankruptcy to file is Chapter 7. There are also some very common reasons why people in Ohio seek bankruptcy protection.

What is Chapter 7 Bankruptcy ?
This is a way for a person to have their debts discharged by the bankruptcy court. It starts when a person files a bankruptcy petition with the court requesting their debts be discharged. In Ohio, it is possible for a person to have much of their property exempt (protected from liquidation). The property that isn’t exempt will be sold. The money received from the sale of the property will be distributed to creditors.

Here are the top seven (7) reasons to file Chapter 7 Bankruptcy:

1. Outstanding Medical Expenses
It is possible for people who have little or no health insurance to experience significant medical debt after a visit to the emergency room and having follow-up care. Most people do not have the thousands of dollars required for basic medical care, let alone life-saving medical treatments. In this situation, you may not have any other way to handle this debt but to file for Chapter 7 bankruptcy.

2. Loss Of Employment
In the event of a job loss, it can be difficult to continue paying bills. In some case, people have started to borrow money to cover their living expenses.  This may cause a significant increase in credit card debt and even personal/pay-day loans to cover said expenses. Eventually, they are unable to pay back the money they owe.

3. Credit Cards
Some people find it easy to use credit cards to make their purchases, but also find it difficult to pay back the money they owe on them. Credit card debt can add up quickly and easily become overwhelming. Interest rates, which are already extremely high, could increase.  If payments are not made to the credit card, for at least the minimum balance, then late charges and other fees accrue, causing the balance to continue to rise.  Filing Chapter 7 bankruptcy will stop collection efforts from credit card companies and more.

4. Divorce
The loss of a spouse’s income can cause a spiral for financial disaster.  One party may be required to pay child support or spousal support, thereby tightening an already decreased budget.  It’s also possible that the recipient of child support and/or alimony may still not have enough funds to cover basic living expenses. These are situations where people are unable to meet their financial obligations.  Often times, parties have joint debt with their former spouse, which cannot be paid on one income.  As such, divorced parties may find filing bankruptcy an option for any lingering debt.

5. Foreclosure
It is possible for people who are facing foreclosure on their home to have it delayed with bankruptcy. When a property owner files for Chapter 7 bankruptcy protection, it will temporarily stop the foreclosure process. This may only last a few months. While a bankruptcy filing will only temporarily stall a foreclosure process from moving forward, the owner will not be able to keep the home in a Chapter 7 case.  The delay will allow the owner to find new housing, without the immediate threat of eviction.  In the event there is a desire to keep the home and get current on the payments, Chapter 13 would be the best remedy.

6. Student Loans
Many students graduate with a significant amount of student loan debt. This keeps them from owning homes, getting car loans and more. Student loans debt accounts for numerous Chapter 7 bankruptcies in Ohio.  While a Chapter 7 case will not allow for discharge of the Student Loans, it will delay any collection efforts, which may allow extra time to rehabilitate the loans or allow the person to apply for an income-based repayment plan.

7. Utility Payments
There are people who are not able to pay their utility bills. These bills can involve the use of gas, electric and can impact heating as well as air conditioning and more. These unpaid balances accumulating from month to month can quickly become an overwhelming amount.  Utilities can be included in a Chapter 7 bankruptcy case and allow the old balance to be discharged, while a new account for services is activated.  Often times, the utility companies will require a security deposit to establish the new service, which is often far cheaper than paying the original, delinquent bill.

Filing a Chapter 7 bankruptcy will provide people with important option for debt relief. It is designed to provide individuals with a fresh financial start. They will be able to regain control over their finances. A Chapter 7 bankruptcy can be an important step toward having a positive financial future.

© Zellar & Zellar, Attorneys at Law, Inc., 2018; All Rights Reserved.



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