Consumer Debt
Credit cards add up fast, and may have high interest rates. For some people, credit cards make up the majority of their debt. Others may have more debt from other sources, but the credit cards might be the biggest nuisance and the fastest growing, as interest rates pile on and necessities are charged.
Other forms of consumer debt, like car loans, can be a big problem, too. Creditors can become a nightmare, calling you at home and work. With interest rates just adding to the total, it may seem like there is no way out, and that the debt will just grow and grow.
Cincinnati Consumer Debt and Bankruptcy
If you are overwhelming with debt, with credits cards or other consumer debts making up a significant portion, bankruptcy may be way to get a fresh start for you. Experienced Cincinnati bankruptcy lawyer Eric Steiden has helped many, many Northern Kentucky and Southern Ohio residents find a lifeline by filing for bankruptcy protection.
Bankruptcy can help you get out of your desperate situation and start life anew without being consumed by debt. With more than 30 years of experience, the team at Steiden Law Offices can help you find the right path. Call today at to set up a free consultation.
Steiden Law Offices assists people in Hamilton County in Ohio and Boone and Kenton Counties in Kentucky, with offices in Cincinnati, Florence and Covington.
Consumer Debt Issues in Ohio and Kentucky
Secured vs. Unsecured Debt in a Chapter 7 Bankruptcy
A Chapter 7 bankruptcy is called a liquidation. In this type of filing, you have a certain amount of exempt property. Any property that is not exempt is sold, or liquidated. The proceeds from the sales are used to pay off debts in a certain order. Unless there is some sort of legal exception, debts that cannot be paid out of the proceeds are discharged, or erased.
For this type of bankruptcy, the type of debt matters. Credit card debt and most forms of payday loans are called unsecured debts. Unsecured debt is any debt where there is not collateral, or something that is attached to the debt that the creditor can repossess, and there is no law making it a priority debt, like child support payments or tax debts.
Unsecured debt is the lowest on the totem pole for bankruptcy. In most Chapter 7 bankruptcies, there is not enough nonexempt property to pay off any of the credit card debt or other unsecured debt, and they are discharged entirely.
Some forms of consumer debt, including auto loans and title loans, are secured debt. These are above unsecured debts in order of priority. While bankruptcy can discharge the underlying debt, it cannot discharge the lien. Therefore, if your car note is not paid off during a bankruptcy, the creditor may be able to repossess your car.
Consumer Debt in a Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is called a “reorganization.” In a Chapter 13, your submit a plan that must be approved by the court to pay off as much of your debt as possible. Chapter 13 filings are favored by those who have steady income coming in and want to avoid a liquidation, but need the protection of bankruptcy.
To qualify for a Chapter 13 bankruptcy, you must have less than $360,475 in unsecured debt and $1,081,400 in secured debt. This is total for all debts. If you had, for example, $120,000 in student loans, $250,000 in medical debt and $25,000 in credit card debt, you would not qualify because the total of your unsecured debt would be above the limit.
For the payment plan to be approved, your creditors must make at least as much as they would under any other form of bankruptcy, including a Chapter 7. Chapter 13 plans typically last three to five years.
Picking which type of bankruptcy to file is a critical choice. If you have considerable credit card debt, a Chapter 7 bankruptcy might be more desirable, since that type of debt is likely to be discharged. Your bankruptcy lawyer can look at your situation and advise you as to what kind of bankruptcy to file.
Assisting Ohio and Kentucky Residents with Credit Card Debt with Bankruptcy
If you are drowning in consumer debt, including credit cards, bankruptcy may be a way to stop the harassment and get a fresh start. Eric Steiden is Cincinnati bankruptcy lawyer who represents South Ohio and North Kentucky residents, with more than 30 years of experience. Call Steiden Law Offices today at to schedule a consultation at one of our office locations in Cincinnati, Florence or Covington.
