Bankruptcy is a court proceeding which lets a person or business have some or all of their debts excused. It should typically only be considered as an option of last resort, because it can have significant long-term consequences, even if it can stave off financial disaster. This means that the costs and benefits need to be carefully considered before filing. Bankruptcy is controlled by federal law and handled in federal courts, so the procedural and substantive rules involved in Missouri are often the identical as everywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Odessa, Missouri bankruptcy attorney beforehand.
Chapter 7 Bankruptcy in Odessa, Missouri
There are 2 typical types of consumer bankruptcy in Odessa, Missouri: Chapter 7 and 13. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is excused. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.
Once the appropriate property is sold, and the funds transferred to the creditors, the dischargeable debt is absolved. Some forms of debt, however, can't be excused in Chapter 7 Bankruptcy in Odessa, Missouri. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be excused, Chapter 7 may not be the best choice for you.
Chapter 13 Bankruptcy in Odessa, Missouri
Chapter 13 Bankruptcy in Odessa, Missouri differs considerably from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 does not absolve any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Odessa, Missouri
The answer to this question depends strongly on your distinct situation. If you have enough stable income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 may be a good option. If you don't have much stable income, and most of your property is exempt, Chapter 7 might be better.
Of course, you should always seek the counsel of an accomplished local Odessa, Missouri bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your specific situation.