Bankruptcy is a court proceeding which lets a person or business have some or all of their debts discharged. It should usually only be considered as an option of last resort, because it can have serious 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. Since it's a product of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Ohio will be the same as anywhere else in the country. Individual courts in Athens, Ohio will have some unique rules, however, so you should consult with a local lawyer before you file.

Chapter 7 Bankruptcy in Athens, Ohio

There are 2 common forms of consumer bankruptcy in Athens, Ohio: Chapter 7 and 13. Chapter 7 liquidates some of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many types of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and essential personal items, like clothing. These assets are not available to creditors.

Once the eligible property is sold, and the funds transferred to the creditors, the dischargeable debt is excused. Some types of debt, however, can't be discharged in Chapter 7 Bankruptcy in Athens, Ohio. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be discharged, Chapter 7 might not be the best choice for you.

Chapter 13 Bankruptcy in Athens, Ohio

Chapter 13 Bankruptcy in Athens, Ohio is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each individual case. Chapter 13 does not eliminate any debt, but it creates a new payment plan that should give the debtor some breathing room. Usually, all of the debts are consolidated into 1 periodic payment. While this might 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 Athens, Ohio

Chapter 13 is usually a good option for people who have a steady income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a steady income, Chapter 7 might be more beneficial.

Of course, you should always seek the counsel of an experienced local Athens, Ohio 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 particular situation.