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Dayton Bankruptcy Law Blog

Avoid foreclosure with a mortgage forbearance

When Ohio residents realize they cannot afford their current mortgage payments, they may worry that the bank will foreclose on their house. However, people may sometimes be able to get a mortgage forbearance to help them manage these payments.

People may find themselves unable to pay their mortgage for many reasons. The Consumer Financial Protection Bureau says these reasons include an unexpected injury or illness and home damage after a natural disaster. Some people may not be able to afford their mortgage if they lose their job or have to take fewer hours. In these situations, many people may be able to request a mortgage forbearance. Some people might think a forbearance means they no longer need to make these payments. This is not the case, though. People typically still need to pay their mortgage; however, they can usually pay a lower amount each month. In some situations, a lender may allow people to temporarily stop their payments. It is important to remember, though, that people generally have to continue making these payments later. A family's particular situation determines the type of forbearance a lender might offer.

Bankruptcy protections for military members

The thought of filing for bankruptcy can cause you fear and anxiety. Much of that probably comes from misinformation you have heard about bankruptcy.

The truth is that bankruptcy can be extremely helpful and relieving. If you are in the military, you may also receive certain benefits during the process.

Will debts remain after filing for Chapter 7?

As a resident of Ohio, you have several options to look into if you are considering filing for bankruptcy. For example, Chapter 7 bankruptcy offers relief from certain debts by allowing you to discharge them. However, it is crucial to note that not every debt you hold can be dismissed through bankruptcy.

FindLaw takes a look at the types of debt that can and can't be discharged by filing for Chapter 7 bankruptcy. Typically, most types of unsecured debt CAN be discharged. Unsecured debts are debts without an underlying loan asset and can include:

  • Credit card charges
  • Medical bills
  • Back rent
  • Utility bills like electricity or telephone

Who could benefit from Chapter 13 bankruptcy

Ohio residents who are considering filing for bankruptcy may also be wondering which type of bankruptcy will work best for them. Chapter 13 has many benefits, but it tends to work better for a certain set of people.

The United States Courts lists out the bankruptcy basics for Chapter 13. Known colloquially as a "wage earner's plan", this plan is ideal for people who are in a financial situation where they can make payments toward their debt. Debt is reorganized so that it is easier to pay off, but ultimately, it will be paid off. This differs from Chapter 7, in which items are liquidated in order to allow the individual to discard some of their debt.

What 5 things should you do after bankruptcy?

Now that your bankruptcy period has ended in Ohio, you likely want to reestablish your credit as quickly as possible. How you go about doing this, however, can make all the difference.

Here, per, are the five steps — in order — that you should take.

What are the benefits of Chapter 13 bankruptcy?

You may feel confused about your options if you are experiencing financial difficulties and you are considering filing for bankruptcy. As you may know, your personal bankruptcy choices include Chapter 7 and Chapter 13. You and other Ohio residents may be able to manage your debt through a Chapter 13 repayment plan. While both of your options have benefits and advantages, you may be interested in learning the positive things about Chapter 13.

According to FindLaw, some of the benefits of Chapter 13 bankruptcy may include the following:

  • You can lower your payments and restructure your debt, allowing you to repay your creditors in an affordable way.
  • Instead of having a bankruptcy on your credit report for 10 years, as with Chapter 7, Chapter 13 only shows on your record for seven years.
  • While repaying your debt under your Chapter 13 plan, you are protected from contact and harassment by your creditors.
  • You may avoid losing your home and other significant assets with a Chapter 13 bankruptcy, as opposed to having some of your property liquidated with Chapter 7.

How getting a divorce can lead to bankruptcy

Getting a divorce is not just emotionally draining; it can also significantly strain your finances. According to research by the Center for Economic Studies, divorce is one of the leading causes of bankruptcy, next to job loss and medical bills.

Ending your marriage may overwhelm you with debt and more financial stressors than before. If this happens, filing for bankruptcy may be a good way to start over. Here are some of the top reasons why breaking up with your spouse can lead you to bankruptcy.

Medical expenses: A major cause of bankruptcy

Across the United States, more than 770,000 people filed for bankruptcy in 2018, according to the U.S. Courts. Nearly 500,000 of those cases involved liquidation bankruptcy or Chapter 7, which wipes clean most financial debt people owe to various creditors. One major cause of these bankruptcies involves the high rate of medical debt in the country, and the inability to pay off health care expenses accumulated from surgical procedures, injuries, emergency room visits and treatment for chronic conditions. In fact, 62% of people who filed for bankruptcy listed medical expenses as the main reason for their inability to keep up with their financial obligations.

Although Americans are required to carry health care insurance, many cannot keep up with high deductibles, copays and monthly premiums. Even after paying the monthly premium payment to purchase the insurance plan, people are responsible for paying up to 100% of the medical costs until the deductible is met. High deductible plans can reach up to $10,000 or more in some instances. It can be extremely difficult to stay on top of all of these expenses, especially if people are unable to work because of the medical condition or injuries. People who are forced to stay out of work while healing may find it even more difficult to keep up with medical payments.

What can bankruptcy’s automatic stay protect you against?

As an Ohio resident who is facing mounting bills that have become more than you can reasonably manage, you may be wondering what you can do to escape the seemingly constant barrage of phone calls from creditors and debt collectors. You may, too, have heard that bankruptcy’s automatic stay period can give you at least temporary relief from some of these communications, but you may not fully understand what happens during this period.

According to LendingTree, the automatic stay is something the court orders once you begin bankruptcy proceedings, and it prevents your creditors from trying to collect on your debts for a certain period. Typically, the automatic stay period lasts somewhere between three and four months, and there are certain restrictions governing who can contact you for money or payments during this time. So, what, exactly, can bankruptcy’s automatic stay temporarily protect you against?

What assets do I stand to lose in a bankruptcy?

If you are considering filing for bankruptcy to relieve your insurmountable debt, you have undoubtedly heard the horror stories. Your well-meaning friends and family members may have misinformed you that you will lose everything in a bankruptcy. You and other Ohio residents may find some peace of mind after learning about exempt and non-exempt property in a bankruptcy.

As FindLaw explains, the bankruptcy trustee will use non-exempt assets to repay creditors during a personal bankruptcy. What exactly they liquidate for this purpose depends on what you have. First, you should understand that exempt property – that which you are allowed to keep – includes items deemed necessary for modern life and for remaining employed. This can include your car, clothing, household goods, furniture, tools of your trade and appliances. Funds you receive from public benefits, pensions and personal injury damages may also be exempt.

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