When people think about overwhelming debt in Ohio, they often believe that it is purely a problem for individuals with low income. However, debt is not just limited to those who are struggling to bring in a paycheck. Adults who consistently earn a high income can also overextend their purchases and get caught in a cycle of high debt. They then find it very hard to keep up with all their payments, even when they are bringing in a higher income than others.

The bankruptcy law of Ohio does recognize that these scenarios exist. That is why there are bankruptcy programs in place that offer relief for those burdened with high debts. Under Chapter 13 terms, a bankruptcy court will allow a three or five-year payment plan that has been carefully designed for the individual to pay back. That person will then pay off a portion of their debts without having to liquidate any of their property.

The laws of Ohio do impose limits on the amount of debt a person can have to be able to qualify for a reorganization bankruptcy. For example, a person cannot have unsecured debts of over $419,275. Their secured debts cannot be over $1,257,850. If the person’s debts are not above these numbers, a bankruptcy court will be able to approve the Chapter 13 protection petition.

When filing for Chapter 13 bankruptcy, an individual will be asked to prove that they have filed their federal and state tax returns for the previous four years. Next, the attorney will work with you to develop a budget that works for your family- and establish a reasonable amount that you can afford to pay to your creditors.

Once the filer has a repayment plan secured, the court will then decide if the plan will be in place for three or five years. After the repayment period is up, the bankruptcy court will forgive any remaining balances that are owed to creditors.

Considering relief from a bankruptcy court may be a way to prevent an individual from having to raid their retirement funds. It can also stop the cycle of debt and prevent them from getting deeper into financial hardship. An attorney who is up to date on the Chapter 13 laws in Ohio can help prepare the necessary financial disclosures for the bankruptcy court and then submit the repayment plan for approval.

Granger Law has the knowledge to assist you with any questions you may have about debt relief. We invite you to contact us today for your free consultation.