Consequences of Bankruptcy
The decision to file for Chapter 7 or Chapter 13 bankruptcy is certainly a major step that can carry very serious and long-lasting implications. Any person who is considering filing for bankruptcy must take a multitude of factors into consideration when deciding whether Chapter 7 or Chapter 13 is truly his or her best option.
Just as some people may be eager to rush into filing for bankruptcy without thinking about some of the ramifications, many others refuse to even consider bankruptcy because of common misconceptions. The attorneys of Steiden Law Offices feel it is important for all individuals to have a full understanding of the positives and negatives that are inherent to bankruptcy filings.
Lawyer in Cincinnati, OH Discusses Consequences of Bankruptcy
Are you hoping to file for Chapter 7 or Chapter 13 bankruptcy in Ohio or Kentucky? You will want to make sure that you have legal representation in order to ensure that you have all the necessary paperwork in order so you can get a fresh start.
The Cincinnati bankruptcy attorneys of Steiden Law Offices have Ohio locations in Cincinnati, West Chester, and Maineville as well as Florence and Covington in Kentucky. Call today to have our lawyers review your case and answer all of your legal questions during a free, confidential consultation.
Northern Kentucky Consequences of Bankruptcy Information Center
- What are some of the most common consequences of filing bankruptcy?
- What are some misconceptions about filing bankruptcy?
- Where can I find more information about consequences of bankruptcy in Cincinnati?
Bankruptcy protection provides many people with the safety nets they need to resolve financial problems, but the process of filing bankruptcy is not without certain drawbacks. A few of the major consequences of bankruptcy can include, but are not limited to:
- Damage to Credit — Any bankruptcy will be reflected on a debtor's credit report for roughly a decade. People with higher credit scores before filing are likely to see the biggest drops in scores, but most people who file bankruptcy will have some difficulty obtaining future credit that does not carry high interest rates.
- Loss of Nonexempt Property — In Chapter 7 bankruptcy, debtors are allowed to keep a certain amount of their assets, referred to as "exempt property." Any property that cannot be exempted is considered nonexempt property that the trustee can take, liquidate, and distribute the proceeds to creditors. With Chapter 13, a debtor gets to keep his or her nonexempt assets, but must pay back all or a portion of his or her debts through a repayment plan.
- Not All Debts Dischargeable — While Chapter 7 and Chapter 13 will allow debtors to discharge some consumer debts, such as credit card debts, medical bills, and personal loans, certain other kinds of debt may not be discharged under either chapter. Certain tax debts, child support, alimony, tort claims, and legal fines are some common examples of debts that will not be discharged, and student loan debt is only discharged in rare cases.
- Public Record — All personal bankruptcy filings in the United States are matter of public record. Access to U.S. Appellate, District, and Bankruptcy court records and documents nationwide can be found on the Public Access to Court Electronic Records (PACER) website developed by the Administrative Office of the United States Courts and maintained by the Court Services Office, Programs Division. Additionally, many personal bankruptcy notices are printed in local newspapers.
- Employment — Many employers perform background checks during the hiring process, and a Chapter 7 or Chapter 13 bankruptcy filing could adversely impact a prospective applicant if he or she is seeking a position that involves money management.
Visit any of the following pages for additional information about possible bankruptcy consequences:
While Chapter 7 and Chapter 13 do have certain disadvantages, many people immediately write off filing for bankruptcy because of oft-repeated myths about the process. A few of the most common misnomers about bankruptcy include, but are not limited to:
- "I make too much money to file for bankruptcy" — Income can indeed affect a debtor's ability to file for Chapter 7, but it very rarely prevents a person from filing Chapter 13. Title 11 U.S. Code § 109(8) does establish debt limits for filing chapter 13 bankruptcy, and the most recent debt limit increases effective until April 1, 2019, are $394,725 for unsecured debt and $1,184,200 for secured debts.
- "I will lose everything I own" — While filing Chapter 7 will may result in the loss of a home or motor vehicle, people who file Chapter 13 typically keep most of their property since they enter repayment plans. An experienced bankruptcy attorney can help ensure that you protect the property most valuable to you.
- "I will never get credit again" — It can take some time before people who file for bankruptcy are able to obtain lines of credit with reasonable interest rates, but most individuals who file for Chapter 7 or Chapter 13 will almost immediately receive multiple credit card offers. Everybody should be sure to fully investigate the interest rates and fees that are associated with such offers.
- "I will lose my job" — While a bankruptcy filing could possibly prevent an employer from hiring an individual, a bankruptcy filing cannot result in a job loss. Title 11 U.S. Code § 525 establishes that no private employer can terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act; has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
- "I am a failure if I file for bankruptcy" — No, you are not. The Framers of the United States Constitution understood that bad things happen to good people. Article 1, Section 8, Clause 4 of the Constitution authorizes Congress to "establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States.” You may very well be a victim of unfortunate timing or circumstances, and you are entitled to a fresh start under federal law.
Debt Relief and Debtor Outcomes: Measuring the Effects of Consumer Bankruptcy Protection — View the full text of this September 2014 study that used 500,000 bankruptcy filings matched to administrative tax and foreclosure data to estimate the impact of Chapter 13 bankruptcy protection on subsequent outcomes. The analysis focused on Chapter 13 bankruptcy, which the authors state makes up about 25 percent of all bankruptcy filings. The authors conclude that their estimates "suggest that the restrictions on bankruptcy filing introduced by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act may have important adverse consequences on debtors."
The Failure of Bankruptcy’s Fresh Start — View the full text of this study published in the Cornell Law Review that explores the assumption that consumer bankruptcy offers families a better financial future. The authors asked debtors the following question: “Overall, since you filed for bankruptcy, has your financial situation improved, stayed about the same, or worsened?” More than one-third of the debtors reported that their financial situations were actually the same as or worse than at the time of their bankruptcies.
Steiden Law Offices | Cincinnati Bankruptcy Attorney
If you are considering possibly filing for Chapter 7 or Chapter 13 bankruptcy in Kentucky or Ohio, it is in your best interest to retain legal counsel. Steiden Law Offices assists individuals filing bankruptcy in communities throughout Hamilton County in Ohio as well as Boone County and Kenton County in Kentucky.
Our Cincinnati bankruptcy lawyers have experience with several different kinds of complex filings, and we can help you put an end to creditor harassment and your cycle of debt. You can have our attorneys provide a complete evaluation of your case when you call or submit an online contact form to schedule a free initial consultation.