Bankruptcy in Marietta, Ohio is a court proceeding through which a person or business who is unable to pay their debt is able to have some of their debt legally eliminated, or "discharged." This theoretically allows the debtor to move on with a clean slate. Bankruptcy should be treated as an option of last resort, and should not be viewed as a fitting way to get out of debt that you just don't feel like paying. Bankruptcy can have severe consequences, including but not limited to damage to your credit rating. A bad credit score can impact your ability to obtain loans in the future, to rent an apartment, and possibly even your ability to get hired at some jobs (as some employers now run credit checks on prospective employees).

For that reason, it would be prudent to speak with a good Marietta, Ohio bankruptcy attorney. This attorney will be able to advise you as to whether or not filing for bankruptcy is a good idea, given your specific situation. This determination is highly dependent on the details of each individual case, so a Marietta attorney's advice is really indispensable.

Types of Bankruptcy in Marietta, Ohio

There are three basic bankruptcy schemes that are most commonly used in Marietta: Chapters 7, 13, and 11. Bankruptcy is a creation of federal law, so the procedure for filing for bankruptcy in Marietta, Ohio will be roughly the same as it would be anywhere else in the U.S. Chapter 7 bankruptcy involves liquidation of many of the debtor's assets in order to pay off as much of the debt as possible. This sounds harsh, but there is an upside: once the liquidation is complete, the debts are legally viewed as having been paid in full, whether or not the full amount was covered by the liquidation. Liquidation involves selling some personal property, and using the proceeds to pay off debt. Numerous types of property are exempt from liqudiation, and therefore may not need to be sold. They include homes, cars, and insurance policies, among others. You should know that some types of debt cannot be discharged in Chapter 7 bankruptcy, including taxes, student loans, and child support.

Under Chapter 13 bankruptcy in Marietta, most of the debtor's debt is not discharged. Instead, the bankruptcy court, working with the debtor and participating creditors, work out a payment plan that allows the debtor to pay off most of his or her debts over an extended period of time, therefore theoretically making the debt far more manageable. Once a payment plan is approved by the court, creditors are prohibited from attempting to collect payment under their original agreements that gave rise to the debt in the first place. Though applicable to individuals, Chapter 11 bankruptcy is typically used by businesses. Like Chapter 13, Chapter 11 requires the restructuring of debts. Under this system, the debtor must come up with a plan to reduce debt, cut costs, and improve operations. Once this plan is finalized, it is submitted to the participating creditors, who must approve it by a majority vote before it can be implemented.

One main advantage of Chapter 11 bankruptcy is that it allows businesses to continue their operations while the process plays out. Moreover, their stock can still be bought and sold.

How Can a Marietta Bankruptcy Lawyer Help?

The need to examine all the options and consider the costs and benefits of filing for bankruptcy in Marietta cannot be overstated. If you are considering filing for bankruptcy, it would be a good idea to speak with a Marietta bankruptcy attorney beforehand.