Filing for Chapter 13 or Chapter 7 may be an option if your debt is out of control. Chapter 13 requires a payment plan in which you pay off all or part of your debt. Chapter 7 is a type of fresh start where your debts are wiped out and you are requied to rebuild your credit rating from scratch. Either way the burden of debt and legal action will be eased, with certain legal requirements and consequences. Either Chapter 7 or Chapter 13 are lengthy commitments. You are committing to paying off or removing your debt and solving a problem, but on the other hand, you are also committing to several years of being viewed as a major credit risk. This means different things for different people, but it is important to understand all of the ways in which a filing will affect you. Cincinnati bankruptcy attorneys will help you understand your filing rights and obligations before you reach a Cincinnati bankruptcy court. If either option is in your future, be sure you speak with your attorney considering all of the filing.

You need to understand what, if anything, will change your taxes, should you choose to file. If you receive refunds at the end of the year, you may have to forfeit this. It is viewed as disposable income and you may end up losing 50% to 100% of the return. However, there are ways you can protect this money. Another choice is to claim higher withholdings throughout the year. This puts more money into their pocket on the monthly basis and creates a situation where you receive no refund. However, you must be careful to increase your withholdings properly to avoid owing tax at year’s end.

You can also protect your refund by placing the money into a retirement account throughout the year. This leaves you with less access to your monthly income, the money will be protected in a tax free account that is not vulnerable to creditor attack. This also helps you plan financially for the future and it gives you something to look forward to following your debt release.

Filing Chapter 13 and Chapter 7 will affect your ability to get credit in the future. For up to a decade you may be undesirable for mortgages, car loans, and unsecured credit. It may creating difficulty finding a job, to open a checking or savings account, or to gain certain clearances affiliated with employment.

If you plan to marry, your prospective spouse can be affected not by being held liable, but having their options reduced when it comes to owning a home or getting a fair interest rate on loans. They will be taking on some of the consequences of your filing, which is important to understand before you file.

Connor Sullivan recently worked with a group of Cincinnati bankruptcy attorneys while conducting research for a new article. He learned about providing debt restructuring while observing aCincinnati bankruptcy court. Get a totally unique version of this article from our article submission service

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