Bankruptcy is a legal process allowing an individual or business to have some or all of their debt absolved. 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 eventually decide that they are outweighed by the benefits. Bankruptcy is controlled by federal law and handled in federal courts, so the procedural and substantive rules involved in Ohio are often the identical as everywhere 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 Trenton, Ohio bankruptcy attorney beforehand.
Chapter 7 Bankruptcy in Trenton, Ohio
There are 2 main types of consumer bankruptcy in Trenton, Ohio: Chapter 7 and 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 basic personal items, like clothing. These assets are not available to creditors.
Once the qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some forms of debt, however, can't be absolved in Chapter 7 Bankruptcy in Trenton, Ohio. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 may not be the best choice for you.
Chapter 13 Bankruptcy in Trenton, Ohio
Chapter 13 Bankruptcy in Trenton, Ohio is very different from Chapter 7. Whether or not it is a better option is very dependent on the facts of each particular case. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the contracts that gave rise to the debt in the first place. This results in an altered payment plan that the debtor should find manageable, if he or she can make a few sacrifices.
Which Type of Consumer Bankruptcy Should I File in Trenton, Ohio
Chapter 13 is normally a good option for people who have a stable 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 stable income, Chapter 7 might be more beneficial.
Whatever your situation, you should speak with a local Trenton, Ohio bankruptcy lawyer. Your attorney will be able to advise you of your options and their likely outcomes, which will help you make a more educated decision.