Making the decision to file for bankruptcy is not always easy but in some cases, it is the only option that makes sense. When debt begins to make a person feel as if they are drowning, it may be time for them to consider bankruptcy in Cincinnati, OH. Pursuing bankruptcy can sometimes be complicated so it is beneficial working with a lawyer. It is also helpful for individuals to learn all they can about the process so they can be prepared.
In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act was passed. This act requires each individual to go through credit counseling before they can even begin the process of pursuing bankruptcy. It also requires applicants to go through mean’s testing to determine if they are eligible for chapter 7 or will need to file for chapter 13. The means test involves measuring the applicant’s last six months of income against the median income in the state of Ohio.
If a person’s income is below the median, they can choose to file chapter 7 bankruptcy. If it is above, their only recourse will be chapter 13. To file for bankruptcy, a bankruptcy petition must be filed with the court. Once the paperwork has been filed, an automatic stay goes into place, preventing creditors from pursuing any further collection activity, including foreclosing on a home.
Chapter 7 bankruptcy is typically settled within six months and some of the debts a person owes can be absolved by the trustee placed over the case. Chapter 13 offers a restructured payment plan to help debtors overcome their debts by paying them off in a reasonable period of time, usually three to five years, depending on the amount of debts owed and the income of the applicant.
Before one attempts to make a decision on bankruptcy, it is important they meet with a lawyer to go over their financial records. A lawyer can help a person determine the best type of bankruptcy for them to file, based on their situation. If you would like further information on bankruptcy, contact us. Scheduling a consultation with the lawyer will allow a person to make a sound decision.
