What Kinds of Personal Bankruptcy Can Be Filed in Ohio?
Federal law provides four ways to declare bankruptcy to help debtors get a handle on overwhelming debts. These forms of bankruptcy are named Chapter 7, 11, 12 and 13 after the sections of U.S. law that explains them. However, only three types of bankruptcy are available to individuals. These are considered personal bankruptcies.
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Chapter 7 Bankruptcy
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Chapter 7 bankruptcy is available to people who do not have the income to pay any of their debts. Debtors must earn less than the median income in Ohio of $40,749, as of the time of publication, to qualify for Chapter 7. People who file Chapter 7 are also required to surrender property and assets with values that exceed the Ohio property exemption amounts. However, most people do not own property valuable enough to trigger seizure by the court. These cases are called "no asset" cases and the court simply discharges the debt at the end of the bankruptcy process. The fee to file Chapter 7 bankruptcy in Ohio is $299.
Chapter 13 Bankruptcy
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Chapter 13 bankruptcy is for debtors who have income that exceeds the median in their state. Chapter 13 requires debtors to create a plan to pay off as much debt as possible within three to five years. The goal is to pay off non-dischargable debts, such as most taxes, student loans and back child support, and get secured debts, such as mortgages and vehicle loans, back in good standing. Chapter 13 filers pay unsecured debt last and will receive a discharge of those debts once the plan is over. Ohio courts charge $274 to file Chapter 13 bankruptcy.
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Chapter 12 Bankruptcy
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Farmers and fishermen need special protection in bankruptcy because overwhelming operational debts from running the farm or fishing may cause them to lose their land or boat or equipment, leaving them without a way to make income. Chapter 12 bankruptcy is reserved for farmers and fishermen who have made at least half their income for the past three years from those activities. Chapter 12 filers will have to come up with a repayment plan that spans three to five years, like in Chapter 13 bankruptcy. Debtors will also be able to reduce the amount owed on secured property that is necessary for work to the current value and discharge any debt over that amount. Debtors in Ohio must pay $239 to file Chapter 12 bankruptcy.
Ohio Bankruptcy Process
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Ohio courts require debtors to take a credit counseling class no more than six months before filing for bankruptcy. Debtors must then complete and submit the bankruptcy petition which lists all debts, expenses, assets and income. All filers must include the credit counseling certificate with the petition paperwork. Chapter 12 and 13 filers must also include their repayment plans. Debtors must pay the filing fees before the court clerk will accept the petition.
Approximately six weeks after filing, the debtor must appear at the courthouse for a meeting of creditors. This meeting allows creditors and the court-appointed trustee to question debtors about their income, assets and debts. However, most creditors do not attend the meeting and it usually only lasts 20 to 30 minutes.
After the meeting of creditors, Chapter 7 debtors wait approximately six weeks for the discharge of their debts. Chapter 12 and 13 filers must complete their plan to receive a discharge.
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