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. Since it's a creation of federal law, bankruptcy is handled in federal courts. Therefore, the rules and procedures governing it in Ohio will be the same as everywhere else in the country. Distinct courts in Reading, Ohio will have some unique rules, however, so you should consult with a local lawyer before you file.

Chapter 7 Bankruptcy in Reading, Ohio

In Reading, Ohio, there are 2 typical types of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates part 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 forms 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 necessary personal items, like clothing. These assets are not available to creditors.

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 Reading, Ohio. 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 Reading, Ohio

Chapter 13 bankruptcy in Reading, Ohio is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 Bankruptcy involves a court setting up an altered payment plan, which allows the debtor to pay off most or all of his debts over an extended period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.

Which Type of Consumer Bankruptcy Should I File in Reading, Ohio

Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your distinct situation. If you have a stable income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a stable income, and most of your property is exempt, Chapter 7 might be a better way to go.

In any case, it would be a good idea to consult a local bankruptcy lawyer in Reading, Ohio. Your lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).