Who Qualifies for Chapter 13 Bankruptcy in Hamilton, OH

When it comes to individuals or couples filing for bankruptcy, what many people are unaware of is that there are two types of bankruptcy that can be filed for. For standard low-income earners, chapter 7 bankruptcy is typically the best option. However, for people that are on the higher income scale, filing chapter 13 bankruptcy in Hamilton, OH is required.

Chapter 7

Chapter 7 bankruptcy is a process where most if not all the person’s outstanding unsecured debt is forgiven by the courts. There are times where windfall profits or the sale of excess assets not exempt from the bankruptcy process can go towards paying existing creditors. However, these situations are more the exception than the rule.

Chapter 13

As it relates to chapter 13 bankruptcy in Hamilton, OH, higher income earners are the ones that file for this type of bankruptcy. Rather than wiping out an extensive amount of debt, this bankruptcy process is a repayment plan. Oftentimes, a repayment plan can be a negotiated lower level of debt.

However, even if the debt numbers don’t lower, chapter 13 issues a court-ordered repayment plan that the filer, as well as the creditors, will have to abide by. These payments plan lasts anywhere from three years to five years, and once the payment plan is over, the bankruptcy is discharged.

Means Test

As stated earlier, income levels determine what type of bankruptcy an individual or couple will file for. To determine these levels, a bankruptcy attorney, upon an initial consultation with the client, will administer a means test. The results of this test will determine if the attorney’s clients qualify for chapter 7 or chapter 13 bankruptcy.

Other Issues

There are other things that someone will have to do in order to qualify for any type of bankruptcy. It’s a requirement, for example, for the people filing for bankruptcy to attend credit counseling with an approved group. A lawyer will help their clients find the right resources.

Regardless of what type of bankruptcy a person files for, the challenges are going to be significant, and it’s important to have an attorney guiding you along the way. If you are considering bankruptcy or if you have questions about possibly filing for bankruptcy in the future, you may want to visit us to learn more about this particular legal process.

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