Bankruptcy Laws In Ohio for Filing Personal Bankruptcy
Bankruptcy is a legal tool, which aims to help debtors to regain a fresh life; a life free from creditors and mountainous debts. Bankruptcy in Ohio has two main classifications that are the most frequently used by people: Chapter 7 and Chapter 13. For Bankruptcy Laws In Ohio, both chapters are present and available. In addition, both bankruptcy law chapter 7 and bankruptcy law chapter 13 functions the same as other bankruptcy laws in other states in America. However, significant difference can be present. Such differences usually occur in the listing and limitations of exempt products and on how the case should be dealt with.
When we talk about chapter 7, we are dealing with the non-exempt assets. This means that chapter 7 is a liquidation process wherein the non-exempt process most assets must be sold and liquidated so as to be discharged from the unsecured debts. On the other hand, when we talk about chapter 13, we are dealing with a repayment plan, so more assets can be kept.
Bankruptcy Laws In Ohio has a strict rule regarding finishing a financial management counseling course before a debtor can be qualified to apply for bankruptcy. Most of these financial management counseling courses can be done through the internet; however, physical classes can also be observed. A financial management counseling course must be finished and is good for 6 months before a debtor can apply a bankruptcy case. This is to protect the bankruptcy case from being abused or exploited. In this way, the court believes that when an individual is knowledgeable enough regarding financial aspects then such a scenario is unlikely to occur in the near future.
Filing For Bankruptcy To Stop Creditors In Their Tracks
Because of the tough economic climate, many people are considering filing bankruptcy. One of the greatest advantages of filing for bankruptcy, besides getting your financial life back in order, is that it will stop those aggressive creditors in their tracks. Yes it is true, when an individual files for bankruptcy their creditors must stop calling them. They must stop garnishing the debtor’s wages, they must stop any law suits or judgments, repossessions, foreclosure proceedings, and all contact with the debtor. In a nutshell, the creditors must stop everything they are doing to collect on the debt or take property from the debtor. This is possible because when filing bankruptcy, the debtor receives the benefit of the automatic stay. The automatic stay is a powerful legal tool that goes into effect the moment the case is filed with the court and prohibits creditors from contacting or taking any actions against the debtor.
There are a few exceptions to the automatic stay, which mostly includes matters of police power or marital obligations such as domestic or child support. For most people however, the bankruptcy filing with its automatic stay provides real relief and a chance to take a deep breath and evaluate their financial situation without the constant pressure from harassing creditors.
After filing bankruptcy, if creditors continue to call the debtor, bother them, garnish their wages, or take any other action against them, the debtor should contact their bankruptcy lawyer immediately. Creditors in violation of the automatic stay can face harsh penalties and fines from the court. However, if the creditors acted innocently without knowing about the bankruptcy case, then you can inform them of the bankruptcy filing as well as the case number and they must stop all contact at that point. If on the other hand, the creditors acted willfully, having knowledge of the bankruptcy case, not only can the bankruptcy lawyer make them stop, but the lawyer can ask the bankruptcy court to award actual as well as punitive damages and legal fees to the debtor.
Is Bankruptcy Filing Better Than Debt Settlement?
With the New Year quickly approaching, Americans can expect to be bombarded by phone calls from debt settlement companies offering them a way out of debt. Because bankruptcy filing carried a negative stigma in the past, most people try to opt out and look for an alternative to bankruptcy. These folks are prime targets for the debt settlement industry. A lot of the negative press about those filing bankruptcy, comes from the credit industry and the debt settlement companies. The majority of what they call facts are only partial truths at best. Looking at it from their standpoint, they believe if they can scare people into not filing bankruptcy that is all the more money that they will get paid back. What they don’t want the individual to know is if they file Chapter 7 bankruptcy they will get nothing, nada, zip. This is why many debt collection companies get militant when they know that debtor is on their last leg. The sad thing is, they know this individual could not afford to pay them anything and yet they would rather see little Johnny go without dinner just so they can squeeze another dime out of this broke individual.
Why debt settlement is touted as being better than a bankruptcy filing is because they say that they can settle all your debts for pennies on the dollar without having to file for bankruptcy. The problem is they can’t promise anything because the creditors are holding all the cards. How debt settlement works is they have the debtor make payments to the company to build up a pot of money for them to negotiate with the individual’s creditors. Since the creditors hold the cards and the debtor is giving the money to the debt settlement company instead of the creditors they have the option of suing the debtor. Now that the credit card is in default, the interest rates and late fees go through the roof. If the creditor sues the debtor and gets a judgment, the creditor will be able to garnish their wages and attach any property that the debtor owns.