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Cincinnati Bankruptcy Law Blog

Medical debts can be discharged in personal bankruptcy

Unpaid debts can have a detrimental impact on the future financial stability of consumers in Ohio. A scarred credit score can jeopardize a person's ability to obtain a mortgage, get financing for a car or rent accommodation. In many cases, the source of the debt is unanticipated medical debts, and, fortunately, there are manners in which the debt can be reduced, or it may even be possible to get it discharged in personal bankruptcy.

It is not uncommon for medical bills to have errors that can be substantial. Some mistakes are easy to spot, such as duplicate charges, but others may need the eye of a professional to audit complicated medical bills. Once errors are identified, a call to the facility's accounts office may result in a significant drop in the owed amount.

Many bankruptcy filings follow minimum payments on credit cards

Credit cards are often the cause of consumers having to face mountains of debt with not enough funds to settle the bills. In fact, credit card debt has led to many bankruptcy filings in Ohio. One of the causes for spiraling credit card debt may be the fact that some consumers are unaware that making the minimum required payment every month is a dangerous practice.

If that is so, then why would credit card providers be happy with consumers paying the minimum payments? The truth is that those who pay their full credit card accounts every month cost the bank a load of interest that they would otherwise earn from those who simply pay the minimum amounts. Furthermore, by encouraging smaller payments, the bank will hold consumers in debt for many years.

Proposed new rules may stop abuse by debt collection agents

It is reported that approximately 70 million American consumers, including some in Ohio, have unpaid debts. Over 6,000 debt collection agencies nationwide are tasked with collecting these past-due amounts, and many have made themselves guilty of harassment. It is not uncommon for debt collectors to be abusive, and a list of recently proposed rules may protect consumers about some of their aggressive tactics.

The new rules that were proposed by the Consumer Financial Protection Bureau include some that may prevent agencies contacting people without verifying the details from the lender. Before a call is made, the collector will have to check the consumer's full name and also substantiate the debt. It is also proposed that the number of calls made to a borrower is limited to six calls per week and that the consumer may put a limit on calls during working hours.

Ownership of a house is not necessarily lost in bankruptcy

Ohio residents who are experiencing financial hardships and fear losing their homes may be considering their options. One of those is filing for bankruptcy, and the intention of the federal Bankruptcy Code is to help people to rebuild their lives. But will that save their homes? The answer depends on several aspects related to the unique circumstances of the individual and also the laws of the state.

If a Chapter 7 bankruptcy is filed, a person's home may be safe if the equity in the property is lower than the state government's exemption amount for houses. However, if the equity exceeds the exemption amount, the home may be sold at auction to cover some of the unpaid debts. Ownership of cars may be saved by signing an agreement reaffirming the debt after bankruptcy. If this is not done, the car may be sold with the proceeds applied to existing debt.

How does a means test affect a bankruptcy filing?

Ohio consumers who are considering their options for eliminating overwhelming debt may be confused with the qualification requirements for each option. These requirements are unavoidable if they choose to file for bankruptcy and the protection it offers. While most people know that consumer debts, such as credit card and medical debt, can be discharged almost immediately through Chapter 7 bankruptcy, they may not be aware that a means test must be completed to determine eligibility for Chapter 7.

The object of the test is to determine whether the consumer earns below the state's median income, or whether he or she has any disposable income after all expenses are paid to pay off existing debts. Those with a below-average income may qualify for Chapter 7 immediately, and although some assets may be liquidated to pay creditors, necessities are mostly exempt. Once a means test qualifies a consumer, a Chapter 7 bankruptcy filing will put an immediate stop to all debt collection actions by creditors.

Abusive debt collection allegations lead to lawsuit

Consumers nationwide, including in Ohio, are protected against the abuse and harassment by creditors or their collection agents. The Fair Debt Collection Practices Act (FDCPA) says nobody may be harassed, oppressed or abused by debt collectors. Repetitive phone calls, profane or obscene language and threats of any kind are not allowed. Creditors or their agents must identify themselves when they make collection phone calls.

Furthermore, debt collectors may not be misleading or deceptive when they call consumers. Some callers pretend to be attorneys and threaten people with arrest or other legal action. In some cases, they threaten to do things that cannot legally be done or which they have no intention of carrying out. Victims of such abuse may benefit from keeping all documents related to the communication with abusive debt collectors. When consulting with an attorney in the event of a dispute, these records can be valuable.

Bankruptcy can remedy overwhelming credit card debt

There are many advantages to having credit cards and likely just as many reasons not to have them. The successful navigation of credit card debt depends on the account holder's ability to manage the payments. Many Ohio consumers file for bankruptcy protection to responsibly address past due payments that have simply become unmanageable. Often, the situation arises when unanticipated medical or other emergency expenses were charged to a card.

The best option, of course, is to pay the full outstanding amount every month. Some even suggest that, although it is called a credit card, it should never actually be used for credit. Typically, interest is only charged on balances that remain unpaid at the end of the month.

Bankruptcy: Too many credit cards can cause financial havoc

Consumers in Ohio who are concerned about their struggle to manage monthly credit card payments because they have too many cards may be considering closing some of their cards. However, under certain circumstances, this may not be a wise decision. Although it is true that overwhelming credit card debt issues can possibly be resolved by filing for bankruptcy, there may be other options.

Too many credit cards can easily cause too much spending, in which case, the consumer may want to close several of them to avoid accumulating more debt. However, this can adversely affect the person's credit score. Also, existing debt on those cards will still have to be paid. Keeping the cards without using them will not increase the debt load. However, cards that are subject to annual fees can cost the holder large amounts of money every year.

Unsure about filing for bankruptcy? Get answers to questions

Financial difficulties can lead to tension in relationships. While many Ohio couples may realize that personal bankruptcy may provide a fresh financial start, they may procrastinate because they have many unanswered questions. Although many may believe married couples have to file jointly for bankruptcy, this is a myth. One spouse can file individually.

Filing for bankruptcy is an important step to take, and it requires careful consideration because it will have an impact on the individual and even his or her family for a considerable time. To ensure informed and advantageous decisions are made, legal counsel may be sought. The bankruptcy law firm of Minnillo & Jenkins is equipped to provide individuals or couples with answers to all their questions related to debt relief options.

Bankruptcy is more beneficial than what myths make it out to be

Ohio consumers who are burdened with unmanageable debt may be exploring remedies to relieve the stress of creditor harassment and other actions. Knowledge is power, and consulting with an experienced bankruptcy attorney may provide the information necessary to make informed decisions. A lawyer may also dispel some of the myths about bankruptcy.

One misconception about bankruptcy is that the filer will lose everything. The truth is that, although Chapter 7 is known as the liquidation bankruptcy, exemptions exist, and assets required for a basic living will not be sold at auction. All assets are retained in a Chapter 13 bankruptcy. However, consumers must not expect all of their debts to be discharged. Bankruptcy will only discharge unsecured debts such as credit card debt and medical debt, but unpaid taxes, child and family support and student loans -- except under specific circumstances -- will remain the filer's responsibility.

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