Columbus Bankruptcy FAQs

In Columbus, Ohio, individuals and businesses have several bankruptcy options. The most common types are:

• Chapter 7 Bankruptcy: Known as “liquidation” bankruptcy, this option allows individuals to discharge most unsecured debts, such as credit card balances and medical bills. In exchange, non-exempt assets may be sold to repay creditors. Chapter 7 is ideal for those with limited income and few assets.
• Chapter 13 Bankruptcy: This is a “reorganization” bankruptcy where individuals with a steady income can create a 3- to 5-year repayment plan to pay off part or all of their debts. It allows you to keep your property while making monthly payments based on your income and expenses. The Chapter 13 bankruptcy process is often used by those who are behind on mortgage payments or who have valuable assets they want to protect.
• Chapter 11 Bankruptcy: This type is mostly used by businesses but can also apply to individuals with large amounts of debt. It involves reorganizing debt and continuing operations while repaying creditors over time. Chapter 11 is complex and typically involves restructuring business debt.
• Chapter 12 Bankruptcy: Specifically designed for family farmers and fishermen, Chapter 12 allows for a more tailored repayment plan and a faster process than Chapter 11. It’s a rare option but beneficial for those in the agriculture or fishing industries facing overwhelming debt.

Filing for bankruptcy is not the right solution for everyone. Consider the following factors to determine if it’s right for you:

• Amount and Type of Debt: If your unsecured debt (e.g., credit cards, medical bills) has become unmanageable and you can’t afford to pay it off in a reasonable amount of time, bankruptcy may help. However, if most of your debt is from non-dischargeable sources like student loans, child support, or taxes, bankruptcy might not offer the relief you’re hoping for.
• Income and Assets: If you have a steady income but can’t keep up with debt payments, Chapter 13 might be a better option to create a manageable repayment plan. If you have little to no income, Chapter 7 could be more appropriate to discharge your debts.
• Alternatives to Bankruptcy: Before filing for bankruptcy, consider alternatives such as debt consolidation, negotiation with creditors, credit counseling, or debt settlement. These options might help reduce debt without the lasting impact of bankruptcy on your credit score.
• Consulting a Bankruptcy Attorney: A bankruptcy lawyer in Columbus can help assess your financial situation and advise on whether bankruptcy is the best course of action. They will evaluate your debts, income, and assets to determine eligibility and recommend the most suitable bankruptcy chapter.

When you file for bankruptcy in Columbus, you are required to list all of your debts. The court expects full disclosure of all your financial obligations. However, not all debts are treated the same way in bankruptcy:

• Dischargeable Debts: These are debts that can be eliminated through bankruptcy, such as credit card debt, medical bills, and many loans.
• Non-Dischargeable Debts: Some debts cannot be eliminated through bankruptcy, including child support, alimony, most student loans, certain taxes, and debts arising from fraud or criminal activity.

While you must list all debts, you cannot choose which ones to include in the bankruptcy filing. However, you can decide whether to continue paying some secured debts (like your mortgage or car loan) if you want to keep the property associated with those debts, particularly under Chapter 13.

When you file for bankruptcy in Columbus, certain assets may be exempt from being sold to pay off creditors, depending on the type of bankruptcy and Ohio’s exemption laws. Here’s what you might be able to keep: [1]

Exempt Property: Ohio provides exemptions to protect certain property. For example:

• Homestead Exemption: Protects up to $161,375 of equity in your primary residence (as of 2024).
• Vehicle Exemption: Protects up to $4,450 in equity for your car.
• Personal Property: Exemptions also cover household goods, clothing, and personal effects, up to certain limits.
• Retirement Accounts: 401(k)s, pensions, and other retirement funds are generally protected in bankruptcy.

Non-Exempt Property: In Chapter 7, non-exempt assets (like second homes, valuable collectibles, or a high-value vehicle) may be sold by the bankruptcy trustee to repay creditors. However, most people who file for Chapter 7 in Columbus do not have enough non-exempt assets for the trustee to sell.

In Chapter 13, you can keep most property because you repay creditors through an affordable payment plan over 3 to 5 years, but the total value of your assets might affect your repayment plan.