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Chapter 13 Bankruptcy Facts in Ohio


Chapter 13 Bankruptcy is a type of bankruptcy referred to as a wave earner's plan. It allows those who earn money regularly to develop a plan that allows them to pay back their debts instead of having to liquidate their assets. If the debtor has a monthly income less than the state median, the plan is set for three years. If the person's income is higher than the median, then plan can be for five years. No plan is allowed to extend longer than five years, which is something to keep in mind.

When you think of bankruptcy, Chapter 7 most often comes to mind. That's the type of bankruptcy that results in selling off your assets to pay back debt. With Chapter 13 bankruptcy, you can save your home from foreclosure and even prevent your vehicle from being repossessed. Similar to a consolidation loan, Chapter 13 bankruptcy allows you to make payments that are affordable based on your income over the 3- to 5-year span while being protected against harassing phone calls from creditors.

To file for this style of bankruptcy, you need to know which creditors you have, how much you owe, how many assets you have, what property you have, and you must be able to list your monthly living expenses. With this information, a court can help create the best repayment plan. If you have a spouse, both of your incomes and all of your assets will be considered, because that gives the court a better idea of what your situation is like.

If you're thinking about filing for bankruptcy, speak with someone who understands the legal implications. With the right choices now, you can save yourself money and trouble in the future.

Source: US, "Chapter 13" accessed Feb. 05, 2015