Vance P. Truman, Attorney at Law
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Medina Bankruptcy Law Blog

Bankruptcy and back taxes - what you should know

If you live in Medina and have found yourself with unmanageable debate, you are not alone. Many people have found themselves struggling to keep up with mortgage payments, credit payments and even monthly utility bills. Another common debt that many people face is back taxes. Whether you did not have enough withholding taken from your paychecks or you had an unexpected source of taxable income, the Internal Revenue Service (IRS) wants their cut.

Fortunately, there are some options available to help you get your debt under control. Bankruptcy, for instance, might be the best route you can take to get your financial situation back on solid footing. However, if you owe taxes, there are few things you should know about how bankruptcy might affect them.

Ohio struggles with several types of debt

Debt can hang around our necks like a stone, but it is always surmountable. Mild debt problems can often be solved with restructuring, and bankruptcy -- never an enjoyable prospect -- can actually help people return to financial health from under the pressure of creditors.

Ohio is not immune from debt problems, as it was hit hard by the mortgage crisis of the first decade of the 21st century and now faces a growing balloon of student and consumer debt. Home ownership dropped 1.5 percent in the state since the beginning of the century.

Bankruptcy filings rose in northwest Ohio in 2017

There are many financial challenges in life, and it is often difficult to keep up with the requirements of modern life. Sometimes homes are too expensive, jobs do not supply enough success and people need to readjust their expectations.

The state of Ohio was one of the hardest-hit parts of the United States during the Great Recession, and although recovery came swiftly, some people and families are still struggling with their financial commitments and needs. The last year saw a rise in bankruptcies declared in the 21 counties served by the U.S. Bankruptcy Court in Toledo.

Protecting assets and benefits from bankruptcy

No one wants to file for bankruptcy. The word itself seems to have social connotations as well as financial, as if a person is admitting failure. However, the truth is far from that assumption; bankruptcy can be the beginning of a path to success out of debt and harassment by creditors.

To begin, bankruptcy is a way to settle debts, not succumb to them. Trustees -- the appointed person who will help take stock of and organize a debtor's assets -- are there to help find the easiest and shortest way out of debt and return him or her to financial health.

Foreclosures drop in the most at-risk counties in Ohio

It is difficult to consider becoming a renter - or worse - once a person or family has bought a home. It is undeniable that owning one's own property is part of the American Dream, and foreclosure or other loss of property due to financial distress is one of life's greatest nightmares.

Ohio was greatly affected by the economic downturn of the late 2000s, with the Great Recession wiping out billions in property value and owners' equity in their homes. The Buckeye State was one of the top 10 states that faced foreclosure between 2008 and 2012, and some areas are only now showing signs of recovery.

How and when do I file for bankruptcy?

Bankruptcy is always a difficult prospect, but it can be a way out of financial trouble if it is done properly and at the right time.

It is vital to consider the depth and breadth of debt, and it is often advisable to consult a lawyer to see if bankruptcy is the right choice.

Is it time to file for bankruptcy?

If you have found yourself drowning in debt, you are not alone. Other people in Medina have found themselves in similar circumstances. For some, a few sessions of credit counseling might provide the solution they need. For others, they need something a bit more intensive. While bankruptcy often carries a strong negative stigma, you should think of it more as a debt relief tool. But, is bankruptcy the right choice for you?

There are several circumstances that point toward bankruptcy as your best option to get your debt under control. If any of the following scenarios apply to you, it is time to seriously consider bankruptcy.

Foreclosures may rise in Ohio real estate markets

Few problems are more daunting than the possibility of losing a home, especially if a family has invested a great deal in its purchase and maintenance. Foreclosure is rare, but the specter of repossession has been close behind since the beginning of the Great Recession.

Foreclosures are generally less common during times when banks and other mortgage providers are not likely to sell properties off, instead favoring loan modifications and other ways of adjusting failing mortgages. When housing markets heat up, however, foreclosures often rise.

What happens when wages are garnished?

Wage garnishments are reductions in income that can damage credit and make life seem unaffordable. Fortunately, it is rare that creditors feel they must resort to garnishing wages, and there are several ways out of it.

An attorney may help employees who have their wages reduced to pay off creditors if they wish to end this process.

Filing for Chapter 13 bankruptcy in Ohio

No one wants to have to think about bankruptcy, and fortunately, it is rare. However, the practice is becoming more common as medical debt, student debt and other types of credit make it harder to avoid or recover from being in the red.

Chapter 7 bankruptcy may result in property and assets being sold to cover all or a portion of an individual's or organization's outstanding debt. Chapter 13 bankruptcy, which makes arrangements for future earnings to go towards debt repayment, can only be applied for by an individual.

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Contact Information Vance P. Truman, Attorney at Law

689 Lafayette Rd.
Medina, OH 44256

Phone: 330-591-4729
Fax: 330-722-3410
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