Dayton Bankruptcy Law Blog

When a person files a petition for bankruptcy in Ohio, all creditor collection actions must cease. This is because filing for bankruptcy triggers an automatic stay, and creditors who violate it are subject to punishment under the law. Courts are divided on whether or not creditors must unwind ongoing collections cases when the debtor files for bankruptcy. Some say inaction on the part of the creditor, leaving the pending case wherever it happens to be, is fine. Others, including a recent bankruptcy court decision, have said the creditor must make affirmative efforts to prevent ongoing collections.

In order for a party to prove that the automatic stay has been violated, he or she must show that a violation happened, that it was willful and that it caused damages. The automatic stay prohibits any act to exercise control over the bankruptcy estate's property as well as any act to take possession of estate property. In the recent case, from a Virginia bankruptcy court, a creditor of the petitioner had secured a judgment and $1,000 had been garnished from the debtor's bank account, but not yet liquidated.

Ohio residents who file for bankruptcy will have their assets placed in a bankruptcy estate. The estate is a separate entity that is overseen by a trustee, and his or her exact duties will vary based on the circumstances of a given case. If a person files for Chapter 7 bankruptcy, a trustee will be tasked with gathering a debtor's non-exempt property, selling it ,and distributing the proceeds to creditors.

The trustee could also be tasked with challenging claims made by creditors or challenging an attempt to have a case discharged. In a Chapter 13 case, a trustee plays a role in reviewing and approving a debtor's payment plan. This person may be allowed to object to a plan if there is reason to do so. If a repayment plan is approved, a debtor will make payments to the trustee, and he or she will distribute the proceeds received to creditors.

Many millennials in Ohio and throughout the country have student loan debt. However, a study from Northwest Mutual found that credit card debt may be hindering their ability to save for the future. Credit cards can come with interest rates above 20%, which is significantly higher than what a person would likely pay to finance the purchase of a home or car. That is also higher than the interest rate charged by most student loan companies.

The study found that 20% of millennials don't even know the interest rate on their credit card balances. Research has found that younger debtors use their credit cards to pay for food and travel. They typically begin using credit cards because they received applications in the mail. It isn't uncommon for millennials to have as many as four credit cards with balances on them at the same time.

Ohio residents may have noticed that the household income in the United States has risen by around 30% over the last 10 years. This is a good thing for many families because it affords them space in their budget to save money. At the same time, the costs of medical expenses have risen by 33%. Medical expenses have caused some households to take on debt, including credit card debt.

Putting medical debt on a credit card could mean paying high interest rates. Families can find themselves so far into debt that they do not have what it takes to even keep up with the interest payments. Thankfully, there are some things that people can do to keep medical debt off their credit card.