In Ohio, the law provides bill collectors with a lengthy six-year period to collect a debt. That statute of limitations means you should focus on negotiation and creating a payment plan to handle debts you incur that you have trouble repaying.
Of course, if things really grow serious, you could file for bankruptcy, but that’s best left as a last resort option. That statement might sound strange coming from Dayton bankruptcy attorneys but ideally, you consult with an attorney before it comes to that.
Ohio Statute of Limitations on Debt
No matter what type of debt you owe, whether you fell behind paying your mortgage or you racked up a large medical bill when involved in an accident, the state of Ohio sets its debt statute of limitations at six years. The clock for that six years starts ticking on the day the borrower made their last payment or the date the debt became overdue, whichever occurred most recently. Once the debt ages six years and one day, the creditor cannot sue you to collect the debt.
Just because you do not hear from a creditor for a while doesn’t mean you no longer owe them. The statute of limitations means they could file court papers to claim their debt from you at any time during the six years. That’s 2,190 days that they have to file a claim to exercise the statute. They could file on day 2,189 of that time frame and they have just as valid a claim as if they filed the paperwork on day 30.
The earlier you consult a Dayton bankruptcy attorney the better outcome they can help you achieve. Many bankruptcy attorneys provide a free consultation. This meeting lets you present your situation and obtain an objective legal opinion on it.
Potential Remedies Besides Bankruptcy
Many reasons may have led to you falling behind on your bills. Perhaps you lost your job, fell ill, or suddenly needed to address a major emergency cost, such as roof replacement. This may have started bill collectors phoning you and emailing you. An attorney can also help make this stop.
An attorney can help you negotiate settlements with your creditors to keep you out of bankruptcy court. These let you pay a percentage of the debt in one payment. You agree to pay 40 or 50 percent of the debt in one payment and the creditor considers it paid in full.
Negotiating New Payment Plans
You can also work with an attorney specializing in bankruptcy to create an early payment plan with creditors to pay off the debt in a more comfortable time period for you.
You also have the option of debt consolidation. This process typically goes through a non-profit agency that negotiates with your creditors for you. You cut up your credit cards and agree to not take others out. All of your debts go into a proverbial pile and each creditor agrees to accept a percentage of what you owe them as full payment. They also agree to accept payment from the non-profit each month in lieu of you paying them directly. You let the non-profit automatically debit you each month for the total amount of all payments and they distribute it for you.
You can seek the bankruptcy remedy whether your creditors have filed court claims or not. You also have the right to use the Ohio legal system to seek debt relief. You have more than one bankruptcy option to explore and each works a bit differently. The one thing all have in common is that the bankruptcy remains on your credit record for seven years. For the first year after filing for bankruptcy, you typically won’t be able to take out any loans or obtain credit of any type.
Filing for bankruptcy can help you save your home and keep it from entering foreclosure. While you cannot typically discharge student loan debt in bankruptcy, you can discharge other debt, which makes it easier to make your student loan payments. It can halt the repossession of your car, too. So, which type of bankruptcy might be right for you?
Most people want to file for Chapter 7 bankruptcy since it completely eradicates debt. You must pass a means test in Ohio though, and you can only use this method once every eight years. The means test examines your total financial situation, paying the closest attention to your monthly income and total debts. Those who own little property could have their attorney file a “no asset” case. Otherwise, exemptions do exist for specific types of property, such as tools and equipment you require for work.
When you file for Chapter 13 bankruptcy, the court consolidates your debts and sets up a repayment plan that spreads your payments over a three- to five-year period. You get to keep your vehicle and home.
Both options stop all bill collection activities by creditors regardless of where they are in terms of the statute of limitations. Even if the creditor takes you to court, filing bankruptcy stops the other legal action.
Other Considerations with Bankruptcy
As long as the creditor’s case has yet to be argued in court and no judgment has been made, you can file bankruptcy and stop the clock. The bankruptcy proceedings gather all of your debt in one place. Creditors have the opportunity to join the court case to seek a remedy for your debt.
Consulting an attorney early on in your financial hardships can help you save your property. Bankruptcy does not protect all property types, nor does it discharge all debt types. Some creditors could still seize your property.
Since the state of Ohio provides your creditors with six years in which to seek remedies for non-payment, you should act proactively as soon as possible to put yourself ahead of their legal actions. Contact a bankruptcy attorney today to discuss your options. When you find yourself falling behind on your bills, don’t wait. Seek assistance to make a plan for successfully putting yourself back on a good financial track.