When deciding whether to file for Chapter 7 bankruptcy in Ohio, it may be helpful for people to consider the pros and cons of this debt relief option.
When faced with overwhelming debt, some people consider options such as filing for Chapter 7 bankruptcy. It can be difficult, however, for them to know if this is the right option for their situations. Therefore, it may behoove people to look at the pros and cons of filing for Chapter 7 in order to help them make their decision. Do take into consideration that these pros and cons are overall generalizations. It would be wise to discuss this with an experienced attorney to address how it would impact the individual's specific circumstances.
Unlike Chapter 13 bankruptcy, which requires a three to five-year repayment plan, Chapter 7 bankruptcies are resolved relatively quickly. In most cases, Chapter 7 cases are settled within three to six months of filing the initial petition. This allows people to regain control of their finances and begin rebuilding.
Lasting credit implications
Although Chapter 7 bankruptcies take a short amount of time to resolve, they can affect people for years down the line. This type of debt relief action may remain on filers' credit reports for up to 10 years. For many, having a bankruptcy on their credit report may affect their ability to obtain a loan or other line of credit.
Discharge of debts
At the end of a Chapter 7 bankruptcy, most of people's unsecured debts are discharged. As a result of this action, filers are released from their personal responsibility for those debts, and thus, they are forgiven what they owe. However, some creditors may still be able to seize property that was used to secure certain debts after a Chapter 7 discharge, according to the U.S. Courts.
Chapter 7 bankruptcy is often referred to as a liquidation filing. This is because people may have to turn over certain assets for liquidation as a part of their Chapter 7 cases. This property is sold and the proceeds are then applied towards the filers' debts.
State and federal laws provide exemptions to the liquidation requirements. These serve to protect most of people's reasonably necessary possessions, including their clothing, household goods and appliances, automobiles up to a certain value and a portion of the equity in their homes. People are also permitted to keep the income they earn after their filings.
Working with an attorney
Debt may cause a number of challenges for people in Ohio. For some, however, there may be more to achieving a fresh financial start than just paying off a credit card or two. Therefore, people who are dealing with unmanageable debt may find it of benefit to consult with an attorney. A legal representative may explain their options and help them determine the best course of action based on their circumstances.