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 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. Distinct courts in Canal Winchester, Ohio will have some unique rules, however, so you should consult with a local lawyer before you file.
Chapter 7 Bankruptcy in Canal Winchester, Ohio
There are 2 typical forms of consumer bankruptcy in Canal Winchester, Ohio: 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 types of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.
Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is excused. But some types of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Canal Winchester, Ohio debts are not dischargeable, you might want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Canal Winchester, Ohio
Chapter 13 Bankruptcy in Canal Winchester, Ohio is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each distinct case. Chapter 13 does not absolve 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 Canal Winchester, Ohio
The answer to this question depends heavily on your distinct situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.
Of course, you should always seek the counsel of an experienced local Canal Winchester, 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 specific situation.