Bankruptcy is a legal process allowing an individual or business to have some or all of their debt discharged. 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 Wickliffe, Ohio bankruptcy attorney beforehand.
Chapter 7 Bankruptcy in Wickliffe, Ohio
There are 2 common types of consumer bankruptcy in Wickliffe, Ohio: Chapter 7 and 13. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is discharged. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, essential personal items, and retirement accounts.
Once eligible assets are sold, and the money turned over to the creditors, most remaining debt is discharged. However, there are certain types of debt that cannot be discharged in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Wickliffe, Ohio.
Chapter 13 Bankruptcy in Wickliffe, Ohio
Chapter 13 Bankruptcy in Wickliffe, Ohio differs significantly from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 does not eliminate any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may 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 Wickliffe, Ohio
Chapter 13 is usually 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.
Regardless of your situation, you should speak with an attorney in Wickliffe, Ohio who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely consequences of each one, allowing you to make a much more informed decision.