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Cuyahoga Falls Bankruptcy Law Blog

Helpful suggestions for reducing your debt

You have recently made some new financial goals and have decided that in order to accomplish them, you need to be doing things to reduce the amount of debt you owe to creditors. Managing debt and creating a realistic method for paying it off is an excellent way to revitalize your financial future and give yourself a head start at financial security. At Debra Booher & Associates CO., LPA, we have helped many individuals in Ohio to explore their options for reducing the amount of money they owe. 

According to The Simple Dollar, studies have shown that the average load of debt carried by an American household is at a stunning $15,609. When you are looking for ways to minimize debt, some of the things you can do include the following:

  • Consider finding a part-time job or something you can be doing in your spare time to pick up a little extra money. 
  • Reassess your needs and find ways to cut expenses that are not necessary. You may also look for ways to reduce spending on necessary expenses. 
  • Contact your creditors and ask about the possibility of getting a lower interest rate. You may find that you are able to negotiate a better agreement on money you still owe. 
  • Create a budget and do what it takes to stick to it. 

Will a mortgage modification allow you to keep your home?

One of the reasons many people in Ohio feel good about filing a Chapter 13 bankruptcy is that they get to keep their homes. However, if you are already considerably behind on the mortgage, and the payments are large, it may be difficult to catch up while continuing to make the regular monthly payment. According to, it may be possible to modify the mortgage during the bankruptcy.

Although you are applying for the modification in conjunction with the bankruptcy, it is up to the lender, not the court or the trustee, to approve or deny the request. In order to ensure that all late payments and fees are covered during the bankruptcy repayment period - usually three to five years - a lender may require you to reaffirm the loan. This contract states that if you do not catch up on the delinquent amount by the time the bankruptcy is discharged, the lender may proceed with foreclosure.

Watch for these signs of a debt relief scam

Even when struggling with overwhelming debt, some people in Ohio may be hesitant to file for Chapter 7 bankruptcy until they have exhausted all other options. In doing some research, they may have come across many websites that seem to have viable solutions. However, these could be scams.

Here are some signs that a debt relief company may be a fraud.

When to file for bankruptcy as a small business owner

As a small business owner, you are often the designer, the salesperson, the accountant, the marketer, and the customer service specialist. With all these different hats, it is no wonder many small business owners get burned out. Burnout can lead to neglecting your business, and that can affect your bottom line. According to Business Insider, 20 percent of small businesses fail within the first year and 50 percent fail by year five.

You may wonder what to do if your small business is losing money. You could ask yourself if filing for bankruptcy is the wisest course of action. It may be, but that also may depend on your type of business and the specific situation.

Income that cannot be touched in your bankruptcy

At Debra Booher & Associates Co., LPA, in Ohio, we understand that sometimes people want to file for an Ohio bankruptcy, but they worry that the trustee will use certain sources of income beyond their earnings to pay creditors, leaving them without adequate support. Fortunately, Ohio has set up many exemptions that protect certain benefits you may be receiving.

Money you are receiving through a scholarship or other tuition assistance, or money in your variable college savings program account is exempt from bankruptcy. If you are a member of a fraternal benefit society that is providing you with benefits, that money cannot be seized to pay back your creditors. Your income that you receive from a beneficiary fund is also exempt, up to $5,000, and a certain amount of your disability benefits. Child support and alimony payments that you receive are also exempt.

Travel-related debt and bankruptcy

For many people, travel is a great way to recharge, take a break from life's responsibilities, and experience the world firsthand. Unfortunately, traveling can also be very expensive and some people take on a considerable amount of debt in order to visit other countries. Moreover, it is important to keep in mind that each person's circumstances are unique. For example, someone may have incurred debt to travel because they had been planning a trip with their friends for years and did not want to change their plans even though they recently lost their job. Or, someone might take on too much debt in order to attend a wedding or funeral overseas.

Regardless of the reason why someone decides to travel, some may rack up too much debt on their credit card or max out a personal loan in order to pay for flights, hotels, and other trip-related expenses. Furthermore, with interest and penalties, some people may find that the debt they took on initially has spiraled out of control. Many people have found themselves in this position and the stress that is associated with high levels of debt can be overwhelming. For some people, filing a bankruptcy petition can lead to financial freedom. Debt can hold people down, whether it was taken on in order to pay for a trip or any other reason.

Keeping up with your Chapter 13 payments

Perhaps one of the reasons you opted to file a Chapter 13 bankruptcy in Ohio was because you do have an income, even though it is not large enough to cover all your debts each month. While the payments are reasonable and you have been able to keep up so far, a single financial crisis could derail your efforts. We at Debra Booher & Associates Co., LPA, often advise clients about the dangers of falling behind on their monthly Chapter 13 plan payments, and what to do if this could become a possibility.

According to the Office of the Chapter 13 Trustee in Akron, you have several choices to make sending in your plan payments easier. Whether you choose to have the money taken directly out of your wages or you would rather pay online or by cashier's check, the important thing is to get the money to the trustee on time each month. But what if you miss work and do not have enough to make one of your payments?

Four Financial Procrastination Mistakes

Procrastinating on financial matters is often an expensive mistake. It can lead to massive debt, and bankruptcy may be the best resolution in the end. Fortunately, making small and smart changes now can save you from costly consequences.

1. Paying the minimum monthly requirement on your credit card

Bergner's parent company still at risk of liquidation

Whenever a company in Ohio is facing financial uncertainty and considering bankruptcy as a possible solution, there is always a chance that its assets could be liquidated entirely. However, in some cases, other companies may bid for a chance to take over the company and save it from certain demise. In these situations, new management may modify the way the organization is run and swap certain aspects entirely in an effort to get the company back on its feet in the competitive marketplace. 

In a recent example of this, Bon-Ton Stores is currently awaiting a bid from potential investors before succumbing to liquidation in its bankruptcy filings. Bon-Ton Stores is the parent company of Bergner's which is a department store chain. The company noticed an exponential decrease in sales during the 2017 season totaling over $130 million in losses during just the first three quarters of the year. As a solution, the company opted to shutter 40 stores across the nation in places like Chicago, Danville and Peoria. 

Should you borrow money from family to pay off a creditor?

Owing debt to creditors is stressful. Letters fill up your mailbox and you begin screening all your calls. Many people turn to family for help; but consider the choice to borrow money from family carefully. If there is any chance you may file for bankruptcy in the future, then matters may get complex.

When you file for bankruptcy, certain types of debt owed to creditors can be discharged. A discharge means you are no longer legally required to pay specific debts. Types of dischargeable debts include credit card debt, vehicle loans and mortgages to name a few.

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