Bankruptcy does not get rid of all debts. You are still responsible for:
- Alimony
- Child support
- Most recent back taxes
- Most student loans
- Recent large purchases of more than $550 for luxury goods bought within 90 days of filing
- Fines or penalties of government agencies
- Fraudulent debts
- Cash advances of $825 within 70 days of filing
On April 20, 2005, the President signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act, which limits individual access to US bankruptcy courts. Some of the changes, which were effective October 17, 2005, included:
- New bans on Chapter 7
- Increased Chapter 13 payments
- New presumptions against debtors with increased penalties
- The reduction of judicial discretion to balance competing interests
Considering bankruptcy?
There is no magic formula for deciding when bankruptcy is the right choice. It is an option you might consider if:
- You are paying only minimum amounts on your bills
- You can't budget yourself out of debt within five years
- You are getting notices that your mortgage or loans are being foreclosed
- You have had a severe financial setback, such as losing your job or a major client, a divorce or a costly illness
As a consumer, you can file for bankruptcy in Ohio under either:
- Chapter 7 (Straight Bankruptcy) to wipe out all debts except those listed and get an immediate fresh start or
- Chapter 13 (Wage Earner Bankruptcy) to set up a repayment plan to pay back your debts over several years' time.
Businesses can file for bankruptcy in Ohio under:
- Chapter 11 (Business Reorganization) which allows the business to continue operations while followign a court approved reorganization or restructuring of its financial situation.