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Ohio Bankruptcy Law Blog

Mortgages and Chapter 13 bankruptcies

Ohio homeowners who are struggling with serious financial challenges may understandably be considering filing for bankruptcy. The debt relief that may be achieved through a bankruptcy filing has helped countless people move forward passed their debts and develop stronger financial futures. However, for those people who own homes, it is important to understand how a mortgage factors into the bankruptcy equation.

As Quicken Loans explains, people who file for Chapter 7 bankruptcies may be forced to let their homes go back to the banks if the home is considered nonexempt. This means it does not meet the criteria for the value amount under which debtors are allowed to keep assets. The option to keep a home here is to pay the full mortgage value in cash. Given that when filing for bankruptcy, finances are generally tight, this is not often a viable option for most people

How to recognize illegal debt collection methods

These days, you may find it easy to fall into debt, thanks to factors such as Ohio’s high cost of living and the challenges associated with paying medical bills, student loans and other necessary expenditures. If your debt is of, say, the credit card or medical variety, you may attract the unwanted attention of a debt collector, and some of the tactics they may use to frighten you are not only unethical, but illegal. At Rauser & Associates Legal Clinic LLP, we have a firm understanding of the difference between legal and illegal debt collection methods, and we use this knowledge to help numerous clients find relief from creditor harassment.

As a consumer, you have certain protections. Per the Federal Trade Commission, the Fair Debt Collection Practices Act provides guidelines as to what constitutes creditor harassment, and it applies to debts you might accrue not only via credit cards and medical bills, but also through auto and home loans, among others. It prevents, for example, creditors from using deceptive tactics to scare you into paying your debt, such as claiming to be an attorney or threatening to arrest you if your debt is not promptly paid in full.

How are student loans handled in Chapter 13 bankruptcy?

People in Ohio and all over the nation are struggling to repay student loans, often well into adulthood. Because failure to keep current on student loans can result in continued creditor harassment and other issues, many people have considered filing for Chapter 13 bankruptcy as a means of tackling outstanding debt once and for all. If you find yourself in this situation, you may be wondering just how student loans are handled under Chapter 13 bankruptcy.

According to StudentLoanBorrowerAssistance.org, having student loan debt discharged is largely a matter of proving undue financial hardship. This is accomplished via the Brunner test, which refers to a specific set of criteria an applicant must meet to have his or her student loan debt fully discharged by way of bankruptcy. Most courts around the country utilize this standard when determining whether debt should be discharged, which is based on a 1987 court decision.

Can bankruptcy help me with my student loans?

If you have asked yourself this question, you are in good company. Thousands of college students graduate from college every year, and a majority of them leaves school saddled with a significant amount of loan debt. It can be difficult to get a job right away, and, consequently, it can be difficult to pay a loan with no money.

You may be dealing with student loan debt and eager to learn about the legal options available to you. While bankruptcy is a viable option for many Ohio residents dealing with various types of debt, it cannot discharge student loan debt. Despite the fact that it cannot help you get rid of this particular financial burden, bankruptcy may still be a beneficial choice.

What are the signs of credit card abuse?

Credit cards are useful in many ways, but they carry a high risk of problems if you do not handle them responsibly. If you are starting to feel uncomfortable with your use of credit, you may be heading for financial trouble. Fortunately, recognizing the signs of misuse now may allow you to change your ways before more significant issues arise.

According to The Balance, one of the most obvious signs of misuse is the inability to pay the full balance on each card. If you often pay only the minimum balance, you may need to curb your spending. It is a good idea to use your card only for purchases that you can afford and pay off in full at the end of the month. However, many credit card holders find it easy to charge items that they would never buy if they had to pay cash up front. If you cannot pay for a particular item, you probably cannot afford it. Additionally, a monthly habit of spending more than you pay off at the end will only cause your debt to snowball until you become overwhelmed.

How can I deal with harassment from creditors?

If you are being harassed by creditors in Ohio, you may be wondering what you can do to put a stop it. To this end, you should know that you have rights when it comes to the methods creditors use to pursue outstanding debts. This knowledge can help you deal with creditor harassment, as well as get your finances back on track.

Marketplace.org offers a few useful tips for dealing with aggressive creditors. First and foremost, it is fully within in your rights to ask creditors contacting you for identifying information. Creditors are not allowed to make calls anonymously, and as a result, they must provide you with their name as well as the name of the agency they are calling on behalf of. Creditors must also speak to you with respect and civility. Any foul or aggressive language is not permitted under current laws.

There is hope for those struggling with debt

The battle against debt can seem never ending. Just when you get a little caught up, the next month's bills arrive in your mailbox and the scramble begins to try to pay them. That hamster wheel feeling is enough to drive anyone crazy. But when you add in the constant harassment from creditors and collection agencies, it's easy to feel hopeless. Every time your phone rings, it's a less-than-pleasant message from an agency and every time you get your mail, there's another threatening letter waiting for you.


Debt that remains after Chapter 7 bankruptcy

It is common knowledge that filing for Chapter 7 bankruptcy makes your debts go away. But it is not that simple. All your debt is not discharged once you have successfully filed for bankruptcy. There are several debts that remain that you have to pay regardless of declaring bankruptcy.

Any state or federal taxes that you owe will not be eliminated and must be paid in full. Parents who are financially responsible for their child and pay child support regularly are not dissolved of their duty and have to pay it. Court fees, lawyer fees and any state fines accumulated are not excused after Chapter 7 bankruptcy. Certain debts like personal injury damages and pension plans are also not discharged by the court.

Are there certain debts that remain after Chapter 7 bankruptcy?

Filing for Chapter 7 bankruptcy is a complicated process, and you should be aware of certain details before making such an important decision. Although it does relieve you of some of your debts, others might not be that easy to get rid of. Certain debts are important to pay off, and the court does not allow you to have them waived.


How to prioritize debt

Debt can quickly become an overwhelming burden with seemingly no hope of escape. However, it may be possible to recover from a mountain of debt with the right plan. People in Ohio who are suffering from excessive bills should first understand the type of debt they have, then prioritize which ones should be paid off first.

The two broad categories of debt are secured and unsecured according to The Balance. Unsecured debt has no collateral linked to it. Educational loans, credit cards and medical expenses are examples of unsecured debt. Failure to repay these bills could result in reports to the credit bureau, which greatly damages the borrower's credit score. A low score may make it more difficult to obtain a mortgage or other loan in the future. Another possible consequences is direct withdrawal from the borrower's salary. This is called wage garnishment. Secured debt, on the other hand, is a loan connected to a particular object, such as a vehicle or a house. The object becomes collateral for the loan, meaning it could be taken away if payments become severely delinquent.

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