Our economy has become increasingly difficult. Illness, divorce, job loss, and business failure can happen to anyone. If one or more of these events has happened to you, you may have struggled valiantly to pay your bills. You may have tried, but have been unable, to get a new job after a job loss.
As a Cincinnati bankruptcy lawyer, I understand.
My bankruptcy practice is focused on helping individuals facing overwhelming debt by identifying their legal options and developing a strategy for them to come to a successful outcome.
When a person cannot pay his or her debts when they become due, the person may be considered technically “bankrupt,” even if the person has not filed for bankruptcy protection. When debts cannot be timely repaid, there are usually two options available – (i) get creditors to agree to a plan of repayment or (ii) file for bankruptcy protection.
Unfortunately, for many debts (such as credit card debt), missing payments or paying late often results in catastrophic increases in interest rates, sometimes to 25% or more. These interest rate increases often all but guarantee that a debt cannot be repaid.
Sometimes it may be possible to negotiate with creditors to work out a payment plan. More frequently, filing for bankruptcy protection is often the only solution, especially as credit card companies typically won’t want to negotiate a workout.
While a decision to file for bankruptcy should not be undertaken lightly, with most of our clients this will be the best solution.
Types of Bankruptcy
For individuals, there are usually two bankruptcy options – Chapter 7 and Chapter 13.
Cincinnati Chapter 7 and 13 Bankruptcy Lawyer - My Bankruptcy Practice
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is often referred to as a “liquidation.” In a Chapter 7 bankruptcy, the assets are determined, the person filing for bankruptcy is allowed to keep certain “exempt” assets, creditors that have security interests are allowed to regain possession of their assets (unless debts are “affirmed”), and any remaining assets are distributed to the creditors.
In order to qualify for Chapter 7 bankruptcy, the person filing must satisfy a “means” test, which is a set of financial calculations designed to determine whether the person filing has any reasonable hope of being able to repay debts under a payment plan. In most cases, debtors would rather file for Chapter 7 than Chapter 13, as under a Chapter 7 bankruptcy, almost all debts are discharged upon plan confirmation (except for some debts like taxes and student debt, which are very difficult to have discharged).
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is referred to as a “reorganization.” In this scenario, debts may be reduced, interest rates may be lowered, and repayment plans may be established. There are many factors that ultimately determine what the reorganization plan will look like; typically the plan will require a repayment over some time period, such as 3-5 years.
Unlike in Chapter 7, in which most debts are completely discharged at plan confirmation, Chapter 13 requires ongoing repayments in accordance with the approved plan.
NOTE - The foregoing explanations, and the other content in this website, present a summary of bankruptcy and other laws. These laws are very complex, and certain facts and circumstances could completely change the analysis above. You should not rely upon anything herein as legal advice, as I and this firm can only provide legal advice upon a written agreement to serve as your legal counsel.
Start a New Financial Life
Reorganization plans and bankruptcy not only clear the way for a brighter financial future, they can also provide a huge emotional relief. In the case of bankruptcy, as soon as your case is filed, your creditors no long can contact you.
To learn more about bankruptcy, please see “Bankruptcy Questions – What to Know about Bankruptcy Law.”
You can begin a new life. Call me so that we can discuss the options for handling your debt.
Helping Clients in Bankruptcy
If you’re experiencing severe financial distress, I would invite you to call me today. It is critical that you learn about the bankruptcy process, your other legal options, and the different bankruptcy options that may be available.