What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a legal option that allows individuals to restructure their debts and repay them over a period of three to five years. Through the supervision of the Ohio bankruptcy courts, this form of relief can make it possible to reduce loan balances, adjust payment terms, and eliminate certain unsecured debts—like medical bills or credit card balances.
Because Chapter 13 involves a long-term repayment plan and detailed financial disclosures, the process can be complex. At our Cincinnati law firm, we offer a free consultation to review your financial situation and help you understand whether Chapter 13 is the right path forward. We’ll walk you through your options and build a strategy tailored to your income, goals, and obligations.
While both Chapter 7 and Chapter 13 bankruptcy can offer significant relief from debt, choosing between them depends on your financial circumstances. Individuals with lower income and few assets often benefit from Chapter 7, while Chapter 13 is designed for those with regular income who want to retain valuable property or catch up on past-due payments.
Chapter 13 is often referred to as a “wage earner’s plan” because it enables working individuals to repay part of what they owe over time. For example, auto loans may be restructured to reduce the total amount owed or lower interest rates, while some unsecured debts may be discharged entirely by the end of the plan.
Who Qualifies for Chapter 13 Bankruptcy in Ohio?
To be eligible to file for Chapter 13 in Ohio, you must typically meet the following conditions:
Your unsecured debt is less than $419,275 and your secured debt is under $1,257,850 (limits subject to periodic adjustment).
You’ve filed all required tax returns for the past four years.
Your income is sufficient to support your basic living expenses and make monthly payments under a court-approved plan.
You’ve lived in Ohio for at least 90 days prior to filing.
You’ve completed a mandatory credit counseling course from an approved provider.
If a debt management plan was created during your counseling session, you must submit it to the bankruptcy court.
Filing Costs for Chapter 13 Bankruptcy in Ohio
To begin the Chapter 13 process, you’ll need to file a petition with the bankruptcy court and pay a filing fee, currently set at $313. Additional costs may include credit counseling, a credit report, and some portion of attorney fees, which can often be rolled into the repayment plan.
Once you file, an automatic stay goes into effect that halts most collection activity. This legal protection prevents creditors from garnishing wages, repossessing vehicles, or proceeding with foreclosure while your case is pending. In Chapter 13, the stay often remains in place throughout the entire 3–5 year repayment period.
Steps to Filing Chapter 13 Bankruptcy in Cincinnati
Every case is unique, but most Chapter 13 bankruptcies follow these key steps:
Collect Financial Records: Gather documents related to income, expenses, assets, debts (both secured and unsecured), recent financial activity, and any prior legal judgments. Accuracy and honesty are essential—omitting or misrepresenting financial information can jeopardize your case.
Submit Your Petition and Plan: Your bankruptcy attorney will help prepare and file your petition along with a proposed repayment plan in the Southern District of Ohio. This plan outlines how you intend to repay your creditors over the next three to five years.
Court Review: The bankruptcy court will examine your proposal. It may approve the plan or request modifications. Once confirmed, you begin making monthly payments to a court-appointed trustee.
Make Payments and Complete the Plan: As long as you stick to the terms and complete a financial education course, your remaining eligible debts may be discharged at the end of the plan period.
Frequently Asked Questions About Chapter 13 Bankruptcy
What Are the Benefits of Chapter 13?
Filing Chapter 13 stops most debt collection immediately and can help you prevent foreclosure, stop repossession, and halt wage garnishment. In some cases, interest on tax debts stops accruing, and penalties may be frozen. Once the plan is completed, creditors generally cannot pursue the discharged portion of your debt.
How Long Does Chapter 13 Take?
Most Chapter 13 repayment plans last between 36 and 60 months. After making your final payment and completing a financial management course, you’ll be eligible for a discharge of remaining qualifying debts.
Which Debts Can’t Be Wiped Out in Chapter 13?
Some debts are non-dischargeable, including child support, alimony, most student loans, and court-ordered restitution for intentional harm. However, obligations such as certain civil judgments or debts to an ex-spouse that aren’t support-related may be included. These are often complex issues best reviewed with a bankruptcy attorney.
Will Chapter 13 Hurt My Credit?
Yes, Chapter 13 will appear on your credit report, typically for up to 7 years. However, the impact is often less damaging than foreclosure, repossession, or ongoing missed payments. Many clients begin rebuilding their credit within one to three years of filing.
Why Should I Hire a Chapter 13 Bankruptcy Lawyer?
Chapter 13 is a technical process with strict deadlines and rules. A skilled bankruptcy attorney helps you navigate it efficiently, avoid mistakes, and retain as much of your property as possible. They’ll also help you compare Chapter 13 with other options, including Chapter 7 or negotiated settlements.
At our Cincinnati firm, we bring years of experience guiding individuals and families through Ohio bankruptcy law. Whether you’re trying to save your home, reorganize tax debt, or escape creditor harassment, we’ll help you chart the most effective path forward.