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Northeast Ohio Bankruptcy Law Blog & News

At Graham & Associates Law Offices, we strive to provide the general public with the most up to date and factual information related to bankruptcy law, family law, general practice law, and more. In our blog, you will find articles about how to get out of credit card debt, how to file for bankruptcy, and more. With over a decade of legal experience in northeast Ohio courts, you can trust us with providing sound information and advice. Our goal is to arm you with helpful information and knowledge to aid you through your financial difficulties. Click through the articles below and contact one of our bankruptcy law experts to learn more about how we can serve your legal needs. 

Understanding a creditor's options for collecting unsecured debt

Ohio residents may be interested in how a creditor could legally collect on a debt when there is no property securing that debt. While it may take a trip to the courthouse, a judgment against the debtor could cause serious trouble if not addressed.

There are two main types of debts. A secured debt is one that allows a creditor to sell or reclaim a piece of property if the debt is not paid, such as a home mortgage or auto loan. An unsecured debt, however, is one that is not backed by collateral property. When the debtor fails to make the required payments, the creditor has no property to reclaim as payment on the debt.

U.S. credit card debt down in 2014, but due to defaults

Ohio residents who carry credit card debt could be interested in these facts according to the Federal Reserve. Total U.S. credit card debt as of September was $881.8 billion. U.S. mortgages and student loan debts are the first and second highest U.S. consumer debt, but credit cards are a close third. Households with such debts typically owe and average $15,608.

According to some measures, total U.S. credit card debt was down 3.33 percent when compared to the previous year. U.S. household average credit card debt was down 2.50 percent between the two periods. However, the decrease in indebtedness is mostly caused by defaults on credit card debt.

Lien stripping for second mortgage after bankruptcy

For many Ohio residents, avoiding foreclosure is an important factor in their decision to file for bankruptcy. Before choosing which form of bankruptcy to file, homeowners who have a second mortgage need to know how that obligation will be affected.

A second mortgage is a home equity type loan with a lien position on the property title underneath the primary mortgage. If a borrower fails to make loan payments on time, a second mortgage lien holder has the power to foreclose on the property. To prevent this from happening, a borrower who has defaulted on a second mortgage may complete a process called lien stripping after a bankruptcy filing. However, lien stripping is only possible under a Chapter 13 bankruptcy.

Getting out of credit card debt

When people get into overwhelming credit card debt in Ohio, they may feel like the debt crept up on them. However, credit card debt is usually something that accumulates gradually before it becomes unmanageable. Because most people are given a low credit card limit to start out with, the trouble begins when the limit rises, and the credit card holder becomes tempted to overcharge.

Once an outstanding balance has climbed high enough, paying off credit card debt becomes harder because the interest on the debt compounds, and the minimum monthly payments are higher. Nevertheless, people with credit card debt do have options for getting out of debt. During the repayment process, it's important for debtors to limit their spending, prioritize high interest debts and refrain from making any more charges.

Ohio statute of limitations for credit card debt

Any resident of Ohio or individual who agreed to a credit card contract in Ohio may enjoy the protection that the state statute of limitations on the enforcement of contracts provides. Credit card companies that attempt to collect on a debt after more than six years has passed may find that the liability has expired and payment can no longer be legally compelled.

A debt that is older than six years is referred to by the term "time barred." The U.S. Federal Trade Commission states that any lawsuit brought against a citizen based on a time-barred debt may be dismissed by informing the court of the aged status of the liability. The six-year period begins from the time that the debt becomes delinquent, which in many cases would be the date of the most recent payment. If the credit card agency can elicit a payment or otherwise obtain acknowledgement of the debt from the creditor, then the clock restarts on the statute of limitations. The debt would still remain on the consumer's credit report.

What should I do if a creditor or debt collector sues me?

Ohio residents may benefit from learning what to do if a creditor or collection agency were to ever file a lawsuit against them. Consumers who have been sued typically benefit from seeking legal counsel with experience in issues concerning debt collection and the Fair Debt Collection Practices Act. Whether the defendants choose to enlist legal representation or not, they are still required to respond to the lawsuit by the date listed on the court document.

Court officials will require the creditor to furnish proof of the alleged debt that the defendant owes. Debtors who disagree with the claim can dispute the lawsuit by filing a response before any final judgment is issued. Notice of the lawsuit is typically sent via certified mail. People who choose to ignore the lawsuit will most likely have the judgment go against them and be liable for the full amount requested by the creditor.

Filing bankruptcy more than once

People throughout Ohio may be able to file bankruptcy if they're struggling financially and need assistance. With the debts written off through a discharge or restructured into more affordable payment levels, people can create a more stable financial position. There are many reasons people need to file bankruptcy, including going through a divorce, the loss of a job and medical bills. These events can happen multiple times in a person's life, so an individual may need to file bankruptcy more than one time.

Individuals are allowed by law to file bankruptcy more than one time, but there are limitations that must be observed, including a waiting period between filings. In a Chapter 7, the debts are liquidated and discharged. When this type of bankruptcy is chosen, individuals must wait eight years before they can file another Chapter 7 liquidation.

Cancer patients face mounting debts

As many people in Ohio may know, many cancer survivors, especially younger individuals, may face years of debt due to medical treatment expenses. According to a study presented at a recent meeting of the American Society of Clinical Oncology, approximately 33 percent of cancer patients who were surveyed reported being faced with large medical bills.

The study was conducted among 1,600 individuals who had received treatment for cancer. Participants in the study reported 27 percent faced bankruptcy or high medical debt while 37 percent had to delay retirement or take extended leave because of cancer treatments. The study participants included 14 percent who were in treatment, 46 percent whose treatment ended less than five years ago and the remainder whose treatment ended more than five years ago. The individuals currently under treatment reported financial hardship at twice the rate of earlier survivors.

What property is considered exempt in an Ohio bankruptcy?

Although bankruptcy is a federal specialty court proceeding, each state sets what property an individual owns that is exempt from the bankruptcy estate. Ohio has a number of types of property that the bankruptcy trustee cannot reach in the bankruptcy in order to satisfy obligations owed to creditors.

In Ohio, up to $125,000 of the residential home's equity is exempt, as is automobile equity up to $3,675, up to $12,250 in apparel, household goods and furnishings, $1,550 in jewelry, $2,325 in tools and books needed for employment, $450 in bank accounts and cash and $1,225 in value of other property.

Ohio retirees facing mounting debts

Ohio residents may be interested to learn that as the Baby Boom generation approaches retirement age, many of its members are finding that they are saddled with considerable amounts of debt. The generation may face a number of different debts, including student loans taken out for themselves or their children, credit card debt, business debt and mortgages. These financial challenges may lead some people to delay retirement.

According to recent data, the Baby Boom generation has the highest level of credit card debt and the greatest number of open credit accounts compared to any other age group. Furthermore, individuals who are over the age of 60 have seen a drastic increase in the amount they owe for student loans. The most recent figure is $43 billion while the figure in 2005 was $8 billion.