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Dayton Bankruptcy Law Blog

How can I live on a budget?

If you're approved for chapter 13, you must make payments to creditors according to a schedule established during the bankruptcy process. If you fail to make payments the plan could be revoked, and you may be ordered to pay off your debt in full. To make sure you stick to your new budget, U.S. News & World Report offers the following advice.

Have a goal in mind

Recognizing illegal debt collection practices

Feeling overwhelmed by debt can prove stressful enough, but if you are also the target of persistent calls from creditors, you may feel as if you are at your wit’s end. Some debt collectors may try to use less-than-ethical means in their attempts to get you to pay your debts, but certain laws prevent them from contacting you and communicating with you in certain ways.

So, how and when can creditors legally contact you in their attempts to collect money from you, and under what circumstances could their actions cross the line and become unlawful?

Bankruptcy and your small business

Business owners regularly face a plethora of challenges, especially those who run a small business and are experiencing financial strain. As a small business owner, you may be worried about how the debt you have taken on will impact your business in the months and years to come, and you may be unsure about how you should handle this situation. For some small business owners, bankruptcy is an excellent way to clear debts and move forward. However, there are many different factors to go over before filing for bankruptcy.

For starters, it is essential to determine which type of bankruptcy will suit your small business best. For some, Chapter 7 bankruptcy is ideal, while other small business owners may decide to move forward with a Chapter 11 or Chapter 13 bankruptcy. Each of these options varies in different ways and you should pore over the unique details of your circumstances to develop a clearer understanding of which strategy is most compatible with your needs.

Understanding how Chapter 13 works

Many residents in Ohio may not realize that there are multiple forms of consumer bankruptcy plans. Several people automatically associate Chapter 7 plans with all personal bankruptcies. These plans may be the best option for some debtors but not for all. The lack of knowledge about Chapter 13 plans may even prevent some people from reaching out for bankruptcy help as they may assume they will always lose their assets. This is not necessarily true.

As explained by the United States Court, a Chapter 13 bankruptcy plan may offer consumers the ability to retain and protect their assets from seizure. This is in stark contrast to a Chapter 7 plan where secured debts may be repaid by the loss of assets to the creditors.

Keeping your home could be simpler than you think

At Kennel and Ziegler LLC, we know that many people in Ohio are worried about losing their homes. That's why we want to share some information about steps available to homeowners throughout the mortgage payment and foreclosure processes.

Please keep in mind while reading this that not every solution works for everybody. Depending on the status of your debt, you may be able to take early action or you might want to resort to stronger measures. No matter what you choose, please thoroughly check the reputation of any company or individual offering assistance.

How much of your income can you lose to wage garnishment?

Like so many other residents of Ohio, you may find yourself struggling to pay off an increasing amount of debt. Maybe your debt accumulated quickly because of an unforeseen medical situation, or maybe you got in over your head as far as credit card bills. Regardless of how your debt accrued, if you are behind enough on your payments, you may have a portion of your wages garnished.

Garnishing, per Nerdwallet, can occur if a creditor obtains a judgment against you that requires your employer to withhold a portion of your earnings until the creditor receives everything it is due. Wage garnishment is also surprisingly common, with one report indicating that it happens to about 7 percent of workers every year.

Completing your Ohio bankruptcy process successfully

In many situations, bankruptcy can be more of a help than a hindrance. As people recognize this, the use of bankruptcy to deal with financial issues is becoming increasingly popular.

It is important to understand the procedure fully in order to handle it successfully. In order to complete the bankruptcy process in Ohio, there are a few key elements that a filer must address.

Do you qualify for Chapter 7 bankruptcy?

If you have considered filing for bankruptcy, you are certainly not alone. In 2017, more than 767,700 bankruptcy cases were filed, according to U.S. Courts. Of those cases, 472,135 were Chapter 7 bankruptcies. Chapter 7, otherwise referred to as liquidation bankruptcy, is designed to wipe away most of your lingering debts, including credit card debts, medical expenses, doctors’ bills and mortgage payments. Not everyone, however, qualifies to file for Chapter 7. There are a few factors that must be met in order to file for this type of bankruptcy.

First, your income cannot exceed the state median income. In Ohio, the state median for one earner is $48,596 and for a family of two it is $60,190. If your income exceeds this amount, you may be able to pass a means test. This looks at your average income over the past five years and compares it to your debt and expenses. You cannot file for bankruptcy if you have filed a case less than 180 days prior and had that case dismissed. Next, you must take a credit counseling course within 180 days of filing for bankruptcy. This course ensures that you understand what is involved in filing for bankruptcy, the effect it will have on your credit, and how to manage your money once you begin rebuilding your credit.  

Tips for rebuilding credit after bankruptcy

As an Ohio resident who recently filed for bankruptcy, you may be working to get your finances back in order in the aftermath of doing so, and part of this process will entail rebuilding your credit. At Kennel Zeigler LLC, we recognize that rebuilding credit is an important part of the bankruptcy process, and we have helped many clients facing similar circumstances work to navigate this and other bankruptcy-related issues.

According to Nerdwallet, your credit score will almost certainly take a hit after bankruptcy, but it may have been in poor shape anyway if you made the decision to file in the first place. A Chapter 7 filing may have given you the clean financial slate you needed to start over, so now it is time to rebuild your credit and continue getting back on top of your finances. So, where should you start?

What might happen if you walk away from your mortgage?

Life can be extremely difficult and stressful after you receive notice that a foreclosure is imminent. On top of your other financial concerns, you now have to worry about keeping your home. If you are considering just walking away from your home, you are not alone. Many other residents of Ohio and elsewhere have done just that. But what happens when you walk away?

One of two things are likely to occur after you abandon your mortgage. Either your bank will repossess the home and complete the foreclosure, or it will fail to complete the process and let the property languish. The latter is known as a zombie foreclosure and, according to the Dayton Daily News, was a common occurrence in Ohio as late as 2015. That year, Ohio was one of the top states for the amount of zombie homes left to fester in neighborhoods across the country.

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