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Chapter 13 Bankruptcy Archives

New rules will affect Chapter 13 bankruptcy cases

Ohio consumers who are considering filing for bankruptcy might want to be aware of new rules that may affect their cases. The rules, which were issued by Chief Justice John Roberts of the Supreme Court of the United States in April and sent to Congress, will modify several aspects of Chapter 13 bankruptcy proceedings.

How investment accounts are treated in bankruptcy

There are many issues that Ohio residents may need to be aware of when it comes to how filing bankruptcy may impact their finances. The good news for those with a 401(k) or an IRA is that money inside of those accounts are often off-limits to creditors. The only exception is that the IRS may levy those funds if there are back taxes owed.

New rule on arbitration for banks and credit card companies

Ohio consumers who may have been prevented from bringing a class action suit against a bank or credit card company because of arbitration clauses contained in their agreements may now be able to do so because of a rule issued on July 10 by the Consumer Financial Protection Bureau. The clauses generally prevented consumers from getting together to file a lawsuit. The rule will apply to new contracts and will not ban arbitration agreements. It will simply take away their power to stop class action lawsuits.

Late claims can bar creditors from repayment plans

For people who are facing severe financial challenges, including the possibilities of foreclosure or auto repossession, filing for bankruptcy may offer relief. It can also come with unexpected surprises, as one Ohio couple learned. The couple filed for Chapter 13, and notice was sent to all creditors. A late filing attempt left one secured creditor out of the repayment plan.

Debt to increase after Federal Reserve raises interest rate

Ohio residents who have credit card debt or mortgages with variable interest rates might want to consider the quarter-point interest rate increase made by the Federal Reserve on June 14. This increase affects loans with variable interest rates since they are based on the short-term rates set by the Federal Reserve. Because the Fed increased the interest rate, monthly payments on mortgages with adjustable interest or credit cards with variable rates may rise.

Modification of a Chapter 13 plan

A ruling made by the U.S. Bankruptcy Court for the Western District of Arkansas may have an impact on Ohio debtors. It held that a couple could modify their Chapter 13 plan by returning their vehicle to the lender and treating a deficiency as an unsecured claim. While bankruptcy law does permit changes to an existing plan, some observers believed that it took a major change in circumstances to allow one.

Good reasons to pay down credit card debt

Ohio residents who have high credit card debt may be causing numerous financial problems for themselves. Perhaps the most obvious impact is that payments can take money away from an emergency fund or retirement savings account. On average, an American household has about $5,700 in credit card debt. If it takes seven years to pay off that debt at an annual interest rate of 20 percent, an individual will pay $5,000 in interest.

Collectors can pursue stale debt

A Supreme Court decision in May 2017 set a significant precedent when it comes to debt collection that Ohio residents should be aware of. The decision makes it okay for collectors to file claims in bankruptcy proceedings for debts that have passed the statute of limitations and are thus time-barred.

Rebuilding credit history after filing for Chapter 13

Filing for bankruptcy can be a difficult decision for Ohio residents, but it is sometimes the only way to stop creditor harassment, stop foreclosure, provide debt relief, and reduce interest payments. After filing for bankruptcy, many assume their credit is ruined. Though it will be noted on credit reports for seven years, there are ways to improve a credit score after filing.

Trustee not permitted to make retroactive plan change

When Ohio debtors file for Chapter 13 bankruptcy, they propose a plan to repay creditors over three or five years. The court must approve the plan. The debtor's repayments are then supervised by a bankruptcy trustee. However, in a case in Texas, a bankruptcy trustee retroactively altered the payment plans for 25 cases. In April, a judge on the U.S. Bankruptcy Court for the Southern District of Texas said the trustee did not have the authority to do so.

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