Unanticipated events such as the loss of a job or a medical emergency have caused financial difficulties for many Ohio consumers. When debt problems become overwhelming, researching possible remedies may be the first step to take. One of the options that usually provides a fresh start is bankruptcy, and learning about the different filing alternatives can help in deciding the most appropriate course of action.
Chapter 7 — also called liquidation bankruptcy — is typically the option suitable for individuals who are simply unable to repay their debts. A court-appointed trustee will supervise the sale of assets through a liquidation sale to raise money to pay creditors. However, each state has a list of exemptions to ensure that the liquidation excludes some necessities. Credit card and medical debts along with other unsecured debts may be discharged through the bankruptcy proceedings, relieving the consumer from the responsibility to pay those financial obligations. However, bankruptcy will not eliminate certain debts such as child support, most taxes and more.
For those consumers who have regular incomes but are currently unable to meet their monthly debt obligations, the Bankruptcy Code offers an opportunity to continue paying off debts, but over an extended period — over three to five years. The filer must draft and submit a repayment plan for the court’s approval. Once it is approved, payments will commence, and the court might discharge remaining unsecured debts that are not fully settled by the end of the plan period, so long as the filer has fully complied with the plan’s terms.
An experienced Ohio bankruptcy attorney can explain the pros and cons of each chapter. After evaluating the consumer’s financial situation, the lawyer can provide advice to help the client to make informed choices. These decisions typically lead to regained financial stability once the bankruptcy proceedings are completed.
Source: upnorthlive.com, “Bankruptcy 101”, Accessed on Feb. 24, 2017