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Cincinnati Bankruptcy Law Blog

How bankruptcy can help you with medical bills

Even with the best insurance, medical bills can become a crippling weight for many families. If you find you cannot handle your bills for your hospital or doctor visit, it may be time to consider bankruptcy. There are two main options that will handle your medical expenses differently, depending on your situation.

The first thing to know is that medical bills are considered “dischargeable debt.” This means that if the court grants your bankruptcy, you are no longer held personally liable for it. This is especially important if you are considering chapter 7 bankruptcy.

Bankruptcy options for businesses

It's no secret that small businesses often fail. No matter how great of an idea you had, if the community simply is not interested, it can become very difficult to keep the doors open. The end of a business does not have to be the end of you, however. There are options to get a fresh start. Businesses have four different bankruptcy options to settle their debts and move on.

The first is chapter 7. Similar to chapter 7 bankruptcy for individuals, this option allows a business to liquidate their assets to pay off their debts. The most common users of chapter 7 bankruptcy are those sole business owners who simply did not get off the ground and do not really have a successful future before them.

Chapter 7 vs. Chapter 13 Bankruptcy

When individuals have unexpected life changes, like sudden unemployment or medical expenses, debt can become a crushing weight. Unpaid bills pile up, and all the sudden you wonder how you are going to feed your family this week. No matter your situation, declaring bankruptcy can help you stand on your own two feet again. There are a couple main types of bankruptcy: Chapter 7 and Chapter 13.

Chapter 7 bankruptcy

Time-barred debts: how collectors violate the law

In an earlier post, we discussed how the Fair Debt Collection Practices Act protects you from creditor harassment. Essentially, the FDCPA prohibits debt collectors from engaging in harassing, deceptive, or unfair practices in order to collect from you. The FDCPA also prohibits debt collectors from trying to collect on time-barred debts.

According to Ohio law, debt collectors have eight years to sue you for any unpaid debt. This eight-year period is known as the statute of limitations. After the statute of limitations is up, any unpaid debts are considered to be "time-barred." Debt collectors cannot sue you for time-barred debts. If they try to, they could be violating the FDCPA. 

Can I save my business through bankruptcy?

Starting, building and running a business is a continuous act of courage. It takes courage to overcome self-doubt or the doubts of others about your idea. It takes courage to put your money on the line, or possibly even your property as collateral to secure start-up funding. It takes courage to keep going even if the profits do not start rolling in right away. It takes courage to keep from second-guessing the wisdom of your decision to become an entrepreneur.

Of course, if fortitude was all that it took to be successful in business, there would be many more business owners in Ohio right now than there are. Sometimes initial plans do not work out. Sometimes you can be a victim of bad timing, such as starting a business during unfavorable economic conditions in the state or even nationwide. There is always the risk of not succeeding right away; many of America’s greatest business tycoons, from Henry Ford to Donald Trump, have shared one thing in common: they have experienced business failures.

Residents losing homes at record pace despite foreclosure decline

Although reports show an overall decline in new foreclosures in the state, a homeowner in Hamilton County facing financial challenges might not be breathing a sigh of relief. Other reports put Ohio ahead of all other states number of homes taken by banks following foreclosure proceedings.

Bank repossession of homes in the state was up by more than 50 percent during the first quarter of 2015 as compared to a year ago. Experts attribute the increased taking of homes by mortgage lenders to a slow foreclosure process that is just now catching up with foreclosure actions started in prior years. 

Successful business debt negotiations concluded by Chapter 11

When a business finds itself having financial difficulties, one solution to resolving them is Chapter 11. A recent bankruptcy filing by an Ohio corporation that owns the Oneida and Anchor Hocking brands illustrates why business bankruptcy under Chapter 11 is referred to as reorganization.

Unlike some other business bankruptcy filings that signal the start of business debt negotiations, the company and its creditors worked out an agreement that includes a complete business reorganization of the company. The creditors agreed to reduce the outstanding debt of the company by almost $250 million. In return, the company agreed that its creditors will own 96 percent of its shares of stock

Can creditors take everything I own if I default on payments?

Some Hamilton County, Ohio, residents live with the daily fear that their home, car or even their furniture and personal belongings will be taken away from them to satisfy a consumer debt on which they have defaulted. If you default on payments, your creditors have the legal right to take you to court to obtain a judgment that authorizes them to use wage garnishment and the forced sale of real and personal property to satisfy the debt.

Ohio law protects you from losing everything you own to a debt collector seeking to satisfy a judgment. It does so by exempting certain property owned by a debtor from execution or wage garnishment. 

How should you choose a bankruptcy law firm?

You have been putting off the decision for as long as you can, looking for ways to avoid having to petition for bankruptcy. You have exhausted your finances, maxed out your credit, juggled your bills, perhaps even played hide-and-seek with collection agencies. But the time has come when you must face the unpleasant reality that bankruptcy may be the only practical option that you have left.

So you look in the phone book or search online for "Ohio bankruptcy attorney." Only to discover that you have many, many law firms and solo practitioners to choose from. How do you know which one to select?

How may a court deny a discharge in bankruptcy?

Chapter 7 bankruptcy is often entered into when people have their financial backs against the wall, so it is understandable that many of these same people want the fresh start that is the implied promise of a Chapter 7 to liquidate as much of their debt load as possible. And overall, that is what this form of bankruptcy protection is able to do: give people with few or no options left a chance to get back on their feet again.

No form of bankruptcy, however, and especially a Chapter 7, should be contemplated without a thorough understanding that while it can be a lifeline, it is not a cure-all. Many debtors come out of the petition process still owing some money, because for a variety of reasons the bankruptcy court will not necessarily be willing or even able to discharge every financial obligation.

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