If you are considering filing for bankruptcy, you may want to familiarize yourself with the laws in Toledo.
What Types of Bankruptcy Relief is Available in Toledo?
There are a few different types of bankruptcy that can be filed in Toledo. Some filings are meant for individuals and some for businesses. Some liquidate assets and some allow for repayment of debt over time. Understanding the types of bankruptcy relief available helps with making informed decisions and navigating the complex legal framework surrounding bankruptcy laws.
Bankruptcy filings available in Toledo include:
- Chapter 7 Bankruptcy
Also known as liquidation bankruptcy, is a common choice for individuals seeking financial relief in Toledo. Under Chapter 7, debtors are allowed to discharge most of their unsecured debts, such as credit card bills, medical debt, and personal loans. Not all debts can be discharged, including some tax debts, student loans, and child support payments.
- Chapter 13 Bankruptcy
Chapter 13 bankruptcy provides an opportunity for debtors to create a repayment plan to address their outstanding debts over a period of three to five years. This option is often suitable for individuals with a regular income who want to retain their assets and catch up on past-due payments, including mortgages, car loans, and taxes.
- Chapter 11 Bankruptcy
Chapter 11 bankruptcy primarily caters to businesses in Toledo, but individuals with substantial debts can also opt for this type of relief. Chapter 11 focuses on reorganizing and restructuring the debtor’s financial affairs, aiming to keep the business running or allow individuals to repay their debts over time.
Under Chapter 11, debtors have a chance to create a plan that modifies their obligations, renegotiates contracts and leases, and reduces their debt burden.
How Do I Qualify for Bankruptcy in Toledo?
To qualify for Chapter 7 bankruptcy in Toledo, you need to pass the Means Test. This test compares your average monthly income for the past six months to Ohio’s median income. If your income falls below the state median, you automatically qualify for Chapter 7. If your income exceeds the state median, you may still be eligible if you can demonstrate to the bankruptcy court that you do not have enough disposable income to pay back your creditors. [1]
A person can not file if they have received a Chapter 7 bankruptcy discharge within the past eight years, nor a Chapter 13 discharge within the past six years. If you have engaged in fraudulent or dishonest financial activities, such as hiding assets or lying on your bankruptcy forms, you may be disqualified from filing under Chapter 7.
For Chapter 13 bankruptcy qualification in Toledo, there is no income requirement comparable to the Means Test under Chapter 7. You must have a regular source of income that allows you to create and adhere to a repayment plan. This plan must demonstrate your ability to meet your monthly financial obligations while gradually repaying your creditors over the designated period.
Are There Exemptions from Bankruptcy in Toledo?
Bankruptcy laws provide for certain exemptions that allow individuals to retain specific assets and property despite filing for bankruptcy. These exemptions are intended to provide a safety net, ensuring that debtors are not left entirely destitute and without any means to rebuild their lives. [2]
One common exemption available during bankruptcy in Toledo is the homestead exemption. This exemption enables individuals to retain a certain amount of equity in their primary residence, protecting it from being seized and sold off to pay creditors.
Another exemption is the personal property exemption. This provision allows individuals to retain certain essential possessions such as clothing, furniture, and necessary household items. There are limits on the value of these items that can be exempted. While luxury items and non-essential assets may not be shielded, individuals can typically safeguard their basic necessities and essential belongings from the reach of creditors.
Toledo bankruptcy laws also provide exemptions for tools of the trade. This exemption ensures that workers necessary instruments for their profession, such as construction tools or medical equipment, cannot be taken away during the bankruptcy process.
Retirement savings, such as 401(k) plans or IRAs, are usually exempt from bankruptcy proceedings. These exemptions are designed to protect individuals’ future financial security, allowing them to preserve their retirement funds and avoid being left entirely destitute in their later years.
What are The Filing Requirements for Bankruptcy in Toledo?
Documentation must be gathered including a list of all assets and liabilities, income and expenses, current contracts and leases, tax returns for the past two years, and documentation of any pending lawsuits or judgments. Be thorough and accurate when providing this information to avoid any complications during the bankruptcy process.
Credit counseling must be completed with an approved agency before filing for bankruptcy in Toledo. This counseling is designed to help individuals assess their financial situation, explore alternatives to bankruptcy, and develop a budget. Upon completion, a certificate of completion must be submitted along with the bankruptcy filing.
Once all the required documentation is gathered and credit counseling is completed, individuals are then required to file a bankruptcy petition with the bankruptcy court in their district.
The petition should include detailed information about the debtor’s financial situation, including income, expenses, assets, and liabilities. A filing fee must be paid at the time of submitting the petition, unless the debtor qualifies for a fee waiver due to financial hardship.
After the bankruptcy petition is filed, an automatic stay is initiated, which prevents creditors from taking any further collection actions against the debtor. This provides immediate relief and protection to individuals struggling with overwhelming debts.
Contact Richard West bankruptcy attorney today to schedule a consultation for a Toledo Bankruptcy and take the first step towards a brighter financial future.
FAQs
Filing for bankruptcy will cause your credit score to drop. The exact decrease in your score will depend on the current state of your credit, but it could lower your score by more than 200 points. The bankruptcy will remain on your credit report for up to 10 years, making it difficult to obtain new credit or loans during that period.
When you file for bankruptcy, an automatic stay is put into effect, which legally mandates that creditors must halt all collection actions against you, including phone calls, letters, lawsuits, and wage garnishments. The automatic stay provides a temporary shield, allowing you to address your financial situation through the bankruptcy process without the constant stress and pressure from creditors.
For Chapter 7 bankruptcy, which involves the liquidation of assets, it typically takes around 3 to 6 months from the filing of the petition to the discharge of debts. Chapter 13 bankruptcy involves a restructuring of debts and creating a repayment plan that lasts between 3 to 5 years. The duration of the process can also be influenced by the complexity of your case and the court’s caseload.
Sources:
[1] Ohio Bankruptcy Means Test – Chapter 7? (n.d.). http://www.ohiobankruptcy.com/means-test/
[2] Section 2329.66 – Ohio Revised Code | Ohio Laws. (n.d.). https://codes.ohio.gov/ohio-revised-code/section-2329.66
