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 Wellsville, Ohio bankruptcy lawyer beforehand.
Chapter 7 Bankruptcy in Wellsville, Ohio
There are 2 main forms of consumer bankruptcy in Wellsville, 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 Wellsville, 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 Wellsville, Ohio
In Wellsville, Ohio, chapter 13 is very different from Chapter 7, and may or may not be the best option for you, depending on your situation. 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 Wellsville, 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.
In any case, you should talk with a local Wellsville, Ohio bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely outcome. This will make it much easier for your to make an informed choice.