Many Ohio residents may find the idea of making financial decisions overwhelming. In many cases, decisions regarding important aspects of life can seem even more daunting. If individuals are facing situations, such as wanting to better manage considerable debt, they may wish to find out more information about Chapter 7 and Chapter 13 bankruptcies in order to potentially feel more confident when making related decisions.
If individuals fear that they will not be able to pay back debt due to a lack of reliable income, they may wish to look into Chapter 7. Utilizing the liquidation process, this type of bankruptcy allows individuals to discharge unsecured debts while liquidating assets in order to pay back secured debts, such as bank loans. Because secured debts typically require collateral, if the debts are unable to be repaid under Chapter 7, that collateral will be surrendered.
For individuals who have a steady income but still face overwhelming debt, filing for Chapter 13 may be a viable option. This route involves a long-term repayment plan that works with creditors in order to allow individuals to repay debt over a period of years. Secured debts are repaid in their entirety, and unsecured debts are repaid proportionally to income left over.
Qualifying for a particular type of bankruptcy may involve many factors. Therefore, individuals interested in this route for debt relief may find more information useful. Ohio residents looking to explore Chapter 7 and/or Chapter 13 bankruptcy may wish to consult with experienced bankruptcy lawyers in order to gain knowledge on their particular cases.
Source: news-gazette.com, “John Roska: How Chapter 7, 13 bankruptcies differ“, John Roska, April 17, 2016