Many individuals have faced financial challenges at some point in life. In some cases, these troubles may only be temporary. In others, they could persist for prolonged periods and prompt a need for relief through bankruptcy. However, the process can be complex, and those facing similar circumstances could benefit from seeking guidance in choosing the correct path with which to proceed. In consumer bankruptcy, there are two main options available, which are Chapter 7 and Chapter 13.
In Chapter 7, many or most of one’s unsecured debts may be discharged upon finalizing the process. However, this type of bankruptcy may also call for the liquidation of certain assets. A person’s income may also play a role, as those who make more than the median income in Ohio may have to pass the means test in order to be eligible for relief through Chapter 7 bankruptcy.
In Chapter 13 bankruptcy, a person can retain possession of all his or her assets while forming a plan to repay a certain amount of debts over a given period. This plan must be approved by a bankruptcy court, and one must continue to adhere to the terms until the process is finalized. Each chapter may offer its own potential advantages and disadvantages, and it is likely in one’s best interests to seek guidance before deciding upon a path.
Overwhelming amounts of debt can place a substantial financial weight on an individual. Those who wish to seek relief could benefit from speaking to a bankruptcy attorney for guidance on the options available to them, as well as the potential outcomes of each. Our Cincinnati bankruptcy attorneys can evaluate a client’s situation and provide advice on how to pursue a healthier financial future.
Source: valuepenguin.com, “Taking the Bankruptcy Plunge: Which Type of Filing Is Right for You“, Janna Herron, Accessed on Dec. 5, 2017