Bankruptcy is a legal process allowing an individual or business to have some or all of their debt excused. It is almost always considered as a last resort because it can have some negative long-term consequences which must be considered, even if you ultimately decide that they are outweighed by the benefits. Bankruptcy is governed by federal law and handled in federal courts, so the procedural and substantive rules involved in Ohio are often the same as anywhere 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 St. Marys, Ohio bankruptcy lawyer beforehand.
Chapter 7 Bankruptcy in St. Marys, Ohio
There are 2 typical forms of consumer bankruptcy in St. Marys, 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 necessary personal items, like clothing. These assets are not available to creditors.
Once the non-exempt property is sold, the rest of the dischargeable debt is absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in St. Marys, Ohio is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in St. Marys, Ohio
Chapter 13 bankruptcy in St. Marys, 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 adjusted 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 St. Marys, Ohio
Chapter 13 is typically 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.
Whatever your situation, you should speak with a local St. Marys, Ohio bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely results, which will help you make a more educated decision.