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 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 Warren, Ohio bankruptcy lawyer beforehand.

Chapter 7 Bankruptcy in Warren, Ohio

There are 2 main forms of consumer bankruptcy in Warren, 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 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 types of debt, however, can't be absolved in Chapter 7 Bankruptcy in Warren, Ohio. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 might not be the best choice for you.

Chapter 13 Bankruptcy in Warren, Ohio

Chapter 13 bankruptcy in Warren, Ohio is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. Chapter 13 does not excuse 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 Warren, Ohio

Chapter 13 is normally 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.

Regardless of your situation, you should speak with an attorney in Warren, Ohio who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely outcomes of each one, allowing you to make a much more informed decision.