Dayton Bankruptcy Law Blog

The problem of overwhelming debts is not limited to people in Ohio with low or no income. People earning higher incomes sometimes get overextended and face difficulty keeping up with debt payments. Bankruptcy law recognizes this scenario and enables relief through a reorganization of debts under the terms of Chapter 13. During the process, a bankruptcy court imposes a three or five-year payment plan designed to fit within the debtor's income without forcing the liquidation of property.

The law does impose upper limits on the amounts of debt that a person can owe and still qualify to file for a reorganization bankruptcy. Unsecured debts cannot exceed $419,275, and secured debts cannot go above $1,257,850. As long as a person's debts do not rise above these thresholds, a bankruptcy court could approve a petition for Chapter 13 protection.

Most of the Ohio residents who file a personal bankruptcy each year do so because of overwhelming medical debts. Figures published recently in the Journal of General Internal Medicine put the number of Americans facing financial hardship due to doctor and hospital bills at 137 million, and about half of the people polled recently by TD Ameritrade said that they would consider using funds that they have saved for their retirement years to pay medical expenses.

Americans with medical problems often find themselves burdened with debt because they do not know that the cost of treatment can vary widely. A surgeon from Johns Hopkins Hospital who has studied health care costs in the United States found that a heart procedure that would cost as much as $500,000 at many hospitals is performed for just $44,000 at some medical facilities. He says that patients should shop around before agreeing to treatment and negotiate the cost of procedures before signing any financial consent forms.

Ohio consumers who owe past due debt balances may be contacted by a debt collector. However, this doesn't mean that an individual will be required to make a payment. Furthermore, it is also possible that a person is contacted about a debt that he or she doesn't actually owe. If a debt collector does call, an individual has the opportunity to verify that the balance owed is correct and that it can still be collected.

Typically, state law imposes a statute of limitations on debt collectors, and that statute of limitations is generally four or six years. However, the clock begins the moment that a person makes a payment on that debt balance. Therefore, if a person makes a partial payment on an old debt, it may give debt collectors or other parties more time to take that person to court.

Many people in Ohio may well grow up with the idea that they will work hard during the majority of their life and then retire at some point. Their retirement years are generally expected to be funded by savings, Social Security and maybe even some wise investments. Very few people expect that their retirement years could be marked by the most serious financial problems of their entire life. That, however, seems to be the case for more seniors today than in prior generations.

The Washington Post reports that reports show a dramatic rise in the number of people over 65 filing for bankruptcy. These filers have an average median net worth of approximately negative $17,400.