OHIO DEBT DISCHARGE THROUGH CONSUMER BANKRUPTCY

While bankruptcy can stay on one's credit report for between seven and 10 years, it can be a powerful tool for eliminating excessive debt and escaping harassing tactics of creditors. It is important to understand that not all debt can be discharged through bankruptcy, but many types of unsecured loans can be eliminated. Tax debt, student loan debt and other government debts are examples of obligations that are not discharged by a personal bankruptcy. However, those debts that are eligible for discharge can be eradicated within approximately four months of the filing in a Chapter 7 case.

Under Chapter 13, a discharge does not occur until much later in the process. A payment plan is typically determined with a duration of between three and five years. At the conclusion of this time, additional outstanding balances on the eligible debts included in the bankruptcy may be eliminated. As in a Chapter 7, there are certain debts that cannot be discharged. An additional concern may be the effect on a credit report as Chapter 7 is listed for 10 years, three years longer than Chapter 13.

Because debts must be properly listed, it may be wise to work with a bankruptcy lawyer during the filing process for either type of filing. A lawyer may also be helpful if a Chapter 13 filing is initiated but later affected due to unexpected circumstances. Clarity from the beginning may help in avoiding errors.

Prior to filing bankruptcy, a candidate may wish to meet with a lawyer to discuss the benefits and disadvantages of various debt-reduction methods. The lawyer may have information about options such as mortgage modification and other programs designed to help those experiencing financial difficulties due to unexpected circumstances.

Source: Fox Business, "When is a Bankruptcy Officially Discharged?", Erica Sandberg, August 04, 2014